What is segmentation?
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What is segmentation?

Segmentation involves breaking your audience into smaller groups with similar traits, like age or shopping habits, in order to send them more personalized and effective ads.

How does segmentation work?

Segmentation works by dividing a customer base into groups based on shared characteristics. These characteristics can be demographic (age, gender, location, etc.), behavioral (purchase history, website browsing behavior, etc.), or psychographic (interests, values, etc.).

Once a customer base has been segmented, marketers can target their campaigns more effectively. For example, a clothing retailer might serve a different ad to men and women, or target people who have recently browsed their website for a specific type of clothing.

Types of segmentation:

There are many different types of segmentation, but some of the most common include:

  • Demographic segmentation: This type of segmentation divides customers into groups based on demographic characteristics, such as age, gender, location, income, and education level.
  • Behavioral segmentation: This type of segmentation divides customers into groups based on their behavior, such as purchase history, website browsing behavior, and social media engagement.
  • Psychographic segmentation: This type of segmentation divides customers into groups based on their interests, values, and lifestyle.

How to measure segmentation:

  • Click-through rate (CTR): The percentage of customers who see an ad and click on it.
  • Conversion rate: The percentage of customers who click on an ad and take a desired action, such as making a purchase or signing up for a newsletter.
  • Return on ad spend (ROAS): The amount of revenue generated per dollar spent on advertising.

Why is segmentation important to marketers?

Segmentation allows marketers to:

  • Target their campaigns more effectively.
  • Deliver more relevant messages to their customers.
  • Increase the response rate to their campaigns.
  • Improve the ROI of their marketing campaigns.

Who needs to know what segmentation is:

  • Performance marketer
  • Digital marketer
  • Paid search specialist
  • Social media marketer
  • Email marketer
  • Ecommerce manager
  • Retail manager
  • Marketing manager
  • Agency owner
  • CMO

Use segmentation in a sentence: “We used segmentation in our marketing campaign to target Gen-Zers with relevant messaging across platforms like TikTok and Instagram.”