Hyper-targeting at scale

Marketers know that targeting is one of the most fundamental dimensions of any advertising strategy or campaign. To maximize the effectiveness of a given marketing channel, brands need to deliver their message to the right consumers — potential buyers who are receptive to and interested in the products or services being offered.

As marketing technology has evolved and improved, the targeting capabilities available to marketers have improved as well. In some cases, such as with digital channels and the addition of multiple third-party data sources, targeting can be taken to an extreme level — also known as hyper-targeting. While it may not be appropriate in all circumstances, increasingly brands are taking advantage of hyper-targeting to tackle various marketing challenges.

Advertisers today have the ability to target based on:

  • Geographic location (by address, postal code or DMA)
  • Primary and secondary demographic characteristics — gender, age, ethnicity, children, income, occupation, etc.
  • Psychographic characteristics, such as brand and category attitudes, hobbies and interests
  • Social profile information, including posting frequency, connections and interest graphs
  • Behavioral data, like purchase or browsing history

If you define your target based on several of these dimensions simultaneously, you can create a very narrow — hyper-targeted — consumer segment that is presumably the perfect audience for your advertising.

There’s at least one significant downside to hyper-targeting however: scale. The more targeting criteria you add to a segment, the smaller that audience will be. For example, assume a brand wants to increase share in select markets in Florida, and the product appeals primarily to women between 22 and 35 with an active lifestyle and above-average income. Whatever asset you start with — whether an email list or a social ad network — contains a limited number of these young, active, affluent, female Floridians. As a consequence, your hyper-targeted advertising campaign may become hyper-tiny.

In some cases, limited scale may be acceptable (for example, in getting initial consumer feedback on a new product with limited distribution). In most cases, however, brands really want to “move the needle” — even if only within a select market and demographic cohort. So the question becomes: can marketers achieve hyper-targeting at a scale that delivers results? And, if so, can they do it in a cost-effective fashion?

The answer is a resounding “Yes!” to both, and marketers can do it by leveraging another time-tested marketing technique: word of mouth. Word-of-mouth marketing (WOMM) harnesses the power of consumer-to-consumer conversations (also referred to as earned media), online and off, to drive brand goals such as awareness, favorability and — ultimately — sales. It has the significant advantage of being the most trusted form of advertising; according to Nielsen, 84% of consumers trust recommendations from friends and family, a higher percentage than for any other form of advertising.

The trick for achieving scale is to leverage a marketing channel that both provides hyper-targeting and drives conversations effectively, a combination of capabilities that some advocacy-marketing platforms (such as House Party) can offer. Continuing the example in Florida, assume you’re able to effectively engage 1,000 active, affluent young women in an effective WOMM campaign. According to research from Lithium, those 1,000 consumers can generate over 500,000 conversations about the brand!

But are those conversations still targeted? Since 90% of word of mouth occurs offline according to research company Keller Fay, the evidence suggests that it does remain highly targeted. Offline conversations typically occur between people who live or work in relatively close proximity and share similar demographic traits (such as age, number of children and socioeconomic status). Furthermore, it’s likely those conversations are organically targeted to individuals who are most receptive to the message. You wouldn’t tell your friends about things you don’t expect them to be interested in, so consumers spreading the word about a brand are taking care of marketers’ targeting for them.

Since a WOMM campaign can start with a relatively small group of consumers, it lends itself very well to hyper-targeting. And that same campaign can provide significant reach, through generations of consumer-to-consumer conversations, that will “move the needle” — thus providing hyper-targeting at scale.