The retail industry is facing new challenges with declines in consumer spending. These changes require a renewed focus on managing your marketing resources effectively – in particular, your media dollars – in order to maximize ROI.

Join our webinar, hosted by John McAteer, the Director of Google’s Retail Team, and Dan Gertsacov from Google’s TV Ads Team, as they lead a discussion on how to use Google TV Ads to help boost your business. Learn how to reach new customers efficiently and generate greater returns on your marketing investments. We hope to see you there!

Date: Wednesday, March 4, 2009

Time: 10:00 AM PST / 1:00 PM EST
Register here

Increasing Profits by Segmenting, Understanding, and Targeting Your Customers .

You aren't advertising to a standing army; you are advertising to a moving parade.[1]

- David Ogilvy,The Most Sought-After Wizard in Today's Advertising Industry” [2]

David Ogilvy, perhaps the most influential marketer of the 20th century, is known for his iconic advertising dictums and mastery of brand and image recognition. He played an instrumental role in shaping the face of modern advertising by emphasizing respect for the intelligent buyer and the importance of understanding the aspirations of one’s customers.

While in the digital world, it may sometimes seem as though everything we’ve learned about marketing has grown obsolete, I’ve found that as the media undergoes drastic changes, Ogilvy’s teachings resonate that much more clearly - offering valuable insights for retailers.

Leveraging the advice of the advertising legend, I will discuss the increase in advertising “noise”, explain why it requires increased engagement with your customers, and discuss how appealing to narrower niches within your larger audience will serve as an excellent tool for businesses looking to profit in today’s complex media environment.

David Ogilvy on Segmenting: Aim your advertising at special groups of consumers.

As the balance of power between marketers and consumers shifts, with consumers taking the lead on marketing conversations via blogs, forums, video uploading and social networking, marketers may find that traditional approaches to reaching the customer are no longer fulfilling their objectives.

To combat these concerns, while historically, marketers had to make a choice between the reach of large media buys and the precision of granular targeting, the number of options afforded by Internet marketing, and the ease of online campaign creation provide a significant opportunity to increase customer focus while still scaling messaging.

By taking your broader brand strategy and making it appeal to multiple narrow niches with your larger target audience, you can then personalize messaging and media buying – increasing both customer loyalty and the return on your marketing investment.

To start segmenting, take a long, careful look at your current customer base and divide it into smaller groups with similar characteristics. The smart marketer will expand their focus beyond age or gender, but will look further, delving into aspirations, education, income, and media behavior across their client base.

Looking to expand to additional niches outside your core target market?

If so, it may also be beneficial to look at trends in consumer behavior. For instance, the Boomer generation is the largest group within the US Internet population with 56.7 users online, and, of these users, only 65.6% have made an online purchase.[3] As retailer, if you understand the untapped potential existing within this user base and are looking to increase profits without a hefty increase in costs, you might consider how your product or service could be messaged and positioned to appeal to this group without making major alterations to your existing offering.

David Ogilvy on Understanding: Successful advertising for any product is based on information about its consumer.

As customer control increases, tolerance for advertising that is anything short of engaging and highly targeted decreases. Therefore, now that you’ve created your sub-segments, if you want to ensure that your messaging is heard, it is critical to understand each sub-segment of your customer base.

For instance, if your company is selling moderately priced ski jackets, you might have a target audience of active upper middle-class individuals between the ages of 16-34. Within this, you might have a sizeable college age male component who worships snow-boarding, a group of new young moms who buy your jacket with the unlikely fantasy of hitting the slopes, and a collection of business men, whose focus is in the boardroom, but hope to stay young by skiing one weekend a month with their college buddies.

Although you’d be selling the same product within a single target market, these sub-segments are likely very different in their aspirations and behavior, by looking at each individually, and drilling down into factors such as income, motivation, age, sex, location, and media behavior, you will be far better positioned to engage each group and create messaging that resonates.

David Ogilvy on Targeting: The most important decision is how to position your product.

Effective targeting, which is central to engagement, is based on the synergistic relationship between the advertising message, the consumer, and the media environment. Once you determine the message you want to send to each subset of your target audience, you will likely want to create separate media plans to ensure that the appropriate group receives the corresponding messaging.

Because we know that much of the difficulty in Internet display marketing revolves around deciding which sites to target, we developed Google Ad Planner, a research and media planning tool which helps you identify websites most likely to attract an audience that you define by demographics and interests. This allows you to increase your profitability by effectively micro-target multiple audiences without wasting unnecessary time and resources.

Want to Learn More?

Check out the Google Ad Planner Overview Video and the Ad Planner Help Center.


Comment on this posting and we’ll fill you in.

[1] Ogilvy, D. (1983), Ogilvy on Advertising, John Wiley and Sons, Toronto, 1983 ISBN 0-517-55075-X (and Pan Books, London, 1983 ISBN 0-330-26985-2).

[2] Time Magazine, Cover Story, October 12, 1962.

[3] eMarketer report. Lisa E. Phillips, Senior Analyst. Boomers Online: Attitude is Everything, 2008.

Many sources, including this BusinessWeek article (written even before the major meltdown of the big banks last Fall), have been focused recently on discussing the importance of branding during a down economy. They site examples of some of the biggest brands of the last century solidifying their brands or in other cases completely pulling ahead of their competitors during recessions. While history has shown the legitimacy of this theory, it often still feels risky to justify spending on anything other than Direct Response in a slow economy.

How about an efficient and more measurable way to build your brand? How about Search?

Sure, its not as splashy as a big PR stunt in the middle of Times Square or running in the Superbowl, but search is a efficient way to build and maintain your brand. In fact, a study done by Enquiro last year showed that brand association increases by 16% when a brand is in the top organic and paid search results.

If you're reading this Blog, its probably very likely that you already know the value of search, but the question is whether its being used effectively in branding.

Every stage of the purchase funnel: 1. awareness 2. recognition 3. preference and 4. action can all be addressed with search. While many advertisers have the end of the funnel covered by running when consumers are ready to purchase, many are missing the top.

By running on keywords that relate to a target consumers' interests and lifestyles, advertisers can connect with consumers at the top of the funnel. By running on generic product keywords, the connection is made at the recognition phase. By running on branded keywords, the connection is made at the preference and action stage. There is no guarantee where a consumer will be at in the purchase cycle, so its important to be there, building your brand, at each moment of relevancy.

Google has also done some custom research in the area of "the brand value of search" and we will share findings from one of our very own studies in the near future...stay tuned!