A Low-Down on Audience Segmentation Using DMPs

In the ever-evolving landscape of digital marketing, understanding and targeting the right audience is crucial for success. Data Management Platforms (DMPs) have emerged as powerful tools to help companies navigate this complexity. DMPs enable organizations to collect, organize, and analyze vast amounts of data, facilitating precise audience segmentation.

But why is a DMP essential for your business? Let's explore how DMPs can revolutionize your marketing strategy and the various ways you can segment your audience to maximize impact and engagement.

What Does a DMP Do?

The customer is the focal point of any business today. It’s a bit of a no-brainer when one says that any company or organization is just about doomed if it fails to pay attention to its customers. And that is why demand for data regarding customers, existing as well as potential, is at an all-time high.

However, the amount of information out there is almost endless and needs to be funneled effectively. Marketers, publishers and other businesses can go about collecting all the data they need about their customers, but what they do with that data is ultimately what counts.1,2,3

Big data is instrumental for any data-driven marketing campaign. However, raw data alone is of no use. It needs to be analyzed, processed and converted into a usable form to help the company outline its marketing strategy.

This is where a DMP comes in. The DMP acts as a single platform that collects, organizes, analyzes and activates first-, second- and third-party audience data from different sources. These sources include (but are not limited to) online, social media, offline and mobile devices.2,3,4

The DMP helps a marketer by providing him/her with a control center for the company’s audience and campaign data. The marketer uses the DMP to study and analyze this data to create targeted and optimized campaigns that reach the right audience and lead to an improved return on investment from the company’s media spend.

How Does a Marketer Segment the Audience Using a DMP?

Audience segmentation is essential if a marketer wants to target the right customer. There’s no point in collecting all that data if the marketer is unable to use it effectively.

The audience can be segmented in a number of ways. Generally, it is based on the subset of customers the company wants to target. For example, a company which sells pet food will segment its audience based on the different categories of pet owners across locations.

Basic Segmentation

Basic segmentation of an audience can broadly be done on the basis of the following factors:5 

• emographic segmentation: Based on age, gender, language, currency and so on. 

• Geographic segmentation: Location, town, city, country, continent, etc. 

• Psychographic segmentation: A customer’s lifestyle, interests, opinions, activities, etc. 

• Segmentation based on campaigns: A customer’s response to campaigns in the past, clicks, conversion rates, etc. 

• Segmentation based on social media usage: A customer’s social media habits like the number of likes, shares, the kind of content being consumed, etc. 

• Domain-based segmentation: Internet domain name, domain URL, page count of domain, etc.

Time-Based Segmentation

A layer of segmentation based on time can be combined with the basic categories above. The time-based segmentation categories are recency and frequency.5 

• Recency: This refers to the time span that needs to be covered. For example, last five days, last two weeks, last one month and so on. 

• Frequency: This is based on the number of times a particular condition is met. For example, the number of visits that a customer has made to a particular website is five times, six times, more than six times and so on. 

Live and Fixed Segmentation

Another layer of segmentation can be added after the marketer has defined the company’s basic and time-based segments. These are live and fixed audience segments.

• Fixed segment: In this type, the number of members in the audience who are being considered is fixed. The fixed segment is defined by historical data.

For example, a large department store creates a segment which includes only those customers who have made a purchase through the store’s online portal in the last two weeks. The store then hands out discount vouchers for an in-store sale to those customers. 

• Live segment: In this segment, the customer data being collected is dynamic in nature. The size of the live segment is not limited by the recency setting and is constantly being updated.

For instance, if the large department store creates a segment which includes only those customers who have purchased a particular brand of pet food (without the recency setting), then that segment is likely to keep increasing with time and is, therefore, dynamic.

These are the broad categories of segments marketers usually deal with. Specific subsets are created based on the company’s needs by using different combinations of these segments.

However, it must be noted that audience segments are only as good as the data being collected. If the data is inaccurate or the sample size too small, the segmentation is unlikely to be effective. 

Mastering Audience Segmentation: Fuel Success with DMPs

In the dynamic world of digital marketing, effective audience segmentation is key to maximizing engagement and driving business growth. Data Management Platforms (DMPs) provide the tools to collect, organize, and analyze vast amounts of data, enabling precise targeting and optimized marketing campaigns. 

If you’re looking to master audience segmentation, MarketStar is here to help. Reach out to us to harness the full potential of your audience data, driving meaningful engagement and business growth. 

References: 

https://www.linkedin.com/pulse/data-management-platforms-dummies-robert-martin/ 

https://www.lotame.com/what-is-a-data-management-platform/ 

ttps://www.tavant.com/blog/data-management-platforms-enabling-better-business 

https://dma.org.uk/article/dmp-to-marketing-automation-how-to-activate-data 

https://piwik.pro/blog/audience-segmentation-dmp/ 

https://piwik.pro/blog/segmentation-methods-dmp/