Segmentation: some wisdom for you
Market segmentation is crucial for business, as customers vary depending on a number of factors; from the amount they’re willing to pay, the advertising they’re exposed to, the quantities they’re interested in and the place in which they make the purchase.
The ability to split your audience into ‘segments’ is an important practice in marketing as it enables a business to fine-tune their campaigns specifically to an audience that they want to connect with. Each segment will have different motivations, daily routines and lifestyles. By having a relevant, refined campaign that is based on a segment, you’re more likely to experience greater levels of engagement, which in turn should see an improvement in conversion rates. Ultimately, marketing segmentation is an efficient spend of the budget and is likely to lead to a greater ROI.
There are 4 main types of market segmentation: geographic, demographic, psychographic and behavioural – understanding these consumer behaviours is essential.
As part of our “sharing the wisdom” series, we caught up with data analyst expert – David Sanderson at Sky AdSmart. Sky AdSmart serves different adverts to different households watching the same programme, meaning that for the first time, brands can advertise on national channels to applicable audiences. We asked David to share his wisdom on market segmentation from his perspective…
ADLIB: In a nutshell, what has been your career journey so far?
David Sanderson: I’ve spent the greater part of my career in broadcasting and media with 15 years in ITV ad sales, 10 years of sourcing private equity finance for media businesses, running a production company, and battling to build a regional business before landing at Sky to lead the business development team for the world’s leading addressable TV advertising platform.
ADLIB: Can you briefly sum up segmentation in your own words? And can you share its importance within the context of your role at AdSmart as well as the AdSmart Technology?
David Sanderson: By segmentation, we mean subdividing an audience into granular groups that allow us to isolate highly specific types of potential customers. At Sky, we have segmented 7 million of our customers into over 1200 different segments that advertisers can combine in whichever way they choose.
If you only want to advertise to households that matter to your business, detailed, accurate segmentation of an audience is critical as a means to avoid wasting ad spend on audiences that will be highly unlikely to ever buy your product or service. This is part of the reason AdSmart is making tv advertising accessible to smaller businesses for the first time.
ADLIB: In your opinion, how has the importance of segmentation evolved?
David Sanderson: As the amount and quality of data available to us grows, segmentation is becoming an ever-increasing part of marketing activity. Increases in technology have made it so much easier to speak to different segments of customers in unique and relatable ways. Making proper use of this detailed and accurate segmentation is a must if advertisers are to keep pace with the industry.
ADLIB: To capture and share some of the wisdom you’ve gained throughout your career so far, what is your advice to those looking to get into a Data Analysis profession?
David Sanderson: Show a desire to explore and understand data. Talk to people in the industry, start looking into the techniques that analysts use. Data analysis is all about being able to turn data points into insight and actions so developing that skill is key. Once a base understanding is there find ways to apply it in your current role. Every business has data/insight needs so an extra pair of hands is usually welcomed. Seek out opportunities.
Alex, in your own words, how is segmentation evolving in a professional context, and what are the most sought-after skills that businesses are seeking when looking to grow their data teams?
Segmentation is becoming increasingly strategically important to businesses as there are always drives to reduce marketing spend whilst at the same time making it more effective.
Segmentation is evolving by becoming progressively accurate and is driving the “hyper-personalisation” of marketing. The skills needed to do this are becoming increasingly more technical. Whilst up until recently, basic statistical programming skills using SAS & SPSS were the main skills needed; companies are leaning more and more towards machine learning and AI to predict which segments will respond to which marketing campaigns. This means that the new skills needed in this sector are statistical programming skills such as Python or R combined with SQL skills to pull data from the advancing amount of data sources available to a business.
Data Analysts interested in improving their skills in these areas can sign up to specific online courses that can teach them these skills and provide real world data for them to practice with.
If you want any more info on useful courses to gain skills in this space, please feel free to get in touch at any time.
Keen to learn more about the future of data in advertising? You can hear more from and about AdSmart at SearchStar’s upcoming conference. October 11th “Data in Advertising: 2019 & Beyond”. Tickets and more info via Eventbrite here. See you there!