Revenue Optimization

What is Audience Segmentation? How Can it Help Publishers?

Small and medium-sized publishers don’t invest in audience segmentation, mostly because they don’t understand how audience segmentation can benefit them. Let’s change that.

What is Audience Segmentation?

Audience segmentation is a process of dividing the audience into segments based on predefined criteria such as behavior, geographical location, historical data, product usage, and other parameters. In the ad industry, audience segmentation is used for ad targeting.

This is carried out by using website cookies. First, the publisher’s website sends the cookie data to user’s web browser. Once installed, cookies monitor the user’s performance until either the user deletes the cookies or the cookies expire automatically.

The data collected by cookies is stored using data management platforms. Most DMPs sync directly with the advertisers’ DSP, so that data can be exchanged without compromising safety.

segmented audience

Image Source: IO Technologies

How Can Audience Segmentation Benefit Publishers?

Targeting is the bedrock of ad tech. In order to target audience, advertisers need to know about the online behavior and affinity of the audience. This is where audience segmentation helps.

Only the publisher can access user information and segment it (“first party data”). Once recorded, publishers need to securely hand over this information to the advertiser.

Advertisers are willing to bid more for properly segment audience. This is because relevant ads generate better leads and conversion for them. 62% marketing professional believe audience segmentation is required for better ad targeting and cite it as one of their top priorities.

Audience segmentation can also help publisher create engaging content experiences based on insights such as: What time of day most users are active? What kind of content is most appreciated? Is there any chance to improve the quality of content?

How Can Publishers Segment Audience?

Among other things, cookies collect behavioral data about users. It would be a waste if the data collected by cookies is not stored and utilized. For that, you need a data management platform. Google Analytics also has some DMP-like functionalities.

Here’s how publishers can use Google Analytics to segment audience:

If you use Google Ad Manager or Google AdSense to monetize your inventory, then you don’t need a DMP because Google will automatically exchange information between their products. However, if you use the services of other ad networks and ad exchanges, then you need to use data management platforms. Sharing all the information collected by Google Analytics directly with advertisers can create security problems for you and your users.

Common Filters for Audience Segmentation

Segmentation depends on the requirements of the advertiser. However, if you are just starting out, then here are some basic audience segmentation criteria:

Demographic: Segmentation based on demographics will filter audience basis on their age group, gender, language, affinity category, behaviour, traffic source, location and more. These are the most basic information required by advertisers and is used for demographic targeting.

Behavior: Behavioral segmentation helps understand user’s interactions and is used for behavioral targeting. It can be evaluated based on session, session duration, clicks, and bounce rate. Using this data, publisher can also improve their audience interaction as well.

Technology: This means filters like OS, browser, screen resolution, device category and such. Also, if mobile audience targeting is required, publishers can add segments by mobile devices, even brand, and model. This kind of segmentation data is used for technical targeting.

Traffic Source: This segment helps publisher know about the source of their visitors. It can be direct, organic, paid campaigns, social media, referral, and more. These can further help you prepare attribution models or just learn more about the journey of the audience.

Other than these filters, publishers can segment the audience based on more advanced parameters (such as product clicks, acquisition channels, goal conversion, and more).

Final word

With policies like General Data Protection Regulation (GDPR) in action, audience segmentation is becoming a more complicated process. Of course, the security and privacy of the audience are important. But the ad industry needs audience targeting information to work efficiently.

Due to incidents like the Facebook–Cambridge Analytica data scandal, users are becoming wary of the data collection methods and often block third-party cookies. Since audience segmentation is initiated by publishers, it is also their responsibility to ensure data safety.

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