How Does Audience Targeting Work?

One of the best reasons to consider digital advertising as part of your marketing mix is it’s capacity for audience targeting. Targeting specific audiences based on various criteria for maximum relevance, and ultimately optimum campaign performance. This approach helps marketers reach the right people with relevant messages, increasing the effectiveness and efficiency of their advertising campaigns. In a nutshell, here’s how it works:

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1. “Data”

It all starts with data collection; Advertisers and platforms (websites, apps, social media channels, etc) gather data from various sources. Including, but not limited to:

• Demographics, audience information like age, gender, location, income level, education, etc.
• Behavioral, browsing history, purchase history, and online activity patterns that indicate a user’s values, wants, needs, etc. 
• Contextual, what type of content a user viewed, keywords, and categories.
• Interest-based, this is primarily on social media platforms or other sites like forums where users can like, follow, or share content indicating their level of interest.

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2. "Segmentation”

Once sufficient data is collected, audiences are segmented into groups based on shared characteristics or behaviors. Typically, these segments are broken into 3 key types:

• Demographic, users are grouped by age, gender, and location. 
• Behavioral, targeting users based on their past purchases, website visits, or engagement.
• Psychographic, users are engaged based on interests, values, or lifestyles.

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3. “Targeting”

The list of ways to target users online is growing all the time, but the most common methods of targeting in digital advertising are as follows:

• Targeted Ads are shown to specific segments (e.g., women aged 25-34 who have purchased shoes online).
• Retargeting/Remarketing Ads are shown to users who have previously visited a website or interacted with an ad but did not convert. Sometimes Advertisers may show an additional offer or discount to sweeten the pot and entice a user to buy.
• Lookalike Audiences are users who share similar characteristics with existing customer base.
• Geotargeting Ads are targeted based on the physical location of the user. This type of targeting is used in most campaigns, to ensure relevance and to avoid overspending in markets outside of where a business operates. But when dialed-in to smaller pinpoints a.k.a. “Geo-fencing”, these ads can be particularly useful for local events where a large number of people may congregate, offering a “captive audience”.
• Contextual Targeting Ads are placed on websites or content that are relevant to the product or service being advertised (e.g., an ad for a kitchen renovator next to a story about Kitchen trends in 2025)

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4. “Platforms”

Once we know who we’re targeting, and how we want to reach them, we have to choose a platform that makes the most sense for our message and audience. Digital ads are typically delivered through four main channels - Search, Display, Social Media, and Email:

• Search Engines (e.g., Google Ads) By showing ads based on keywords that users search for, you reach a very “self-selected”, highly relevant audience.
• Display Networks, Google Display and Programmatic targeting banner ads that appear on various websites that are part of a network, targeting based on user behavior and interests. This tactic is awareness-focused, with offers and visuals playing a large role in campaign performance.
• Social Media (e.g., Facebook, Instagram, Twitter) Ads on these platforms are highly targeted based on user behavior such as the pages they like and the content they share, as well as the demographic information users supply when creating an account on these platforms.
• Email Marketing can be very effective at sending tailored messages to segmented lists of subscribers. Advertisers may want to set up different email lists based on their messages (e.g., “newsletter” subscribers may want general information, while a “promotions” email subscriber may only be interested in sales, and a “customer” subscriber may be looking for products related to their purchase)

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5. “Analytics and Optimization”

The best campaigns make data-driven decisions. Post-delivery, advertisers can analyze the performance of their campaigns using various metrics (e.g., click-through rates, conversion rates, engagement). This data helps advertisers refine their targeting strategies, improve ad creatives, and make data-driven decisions for future campaigns.

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6. “Privacy”

You may have noticed when visiting most websites that you’ll see a pop-up asking about your cookie preferences. This has to do with growing concerns around privacy and data protection (such as GDPR in Europe and CCPA in California). Advertisers need to comply with regulations regarding data collection and usage, and as a result, many platforms offer users options to control their privacy and how their data is used in advertising. 

If you’re interested, you can see how you “look” to advertisers on Google by clicking on your Google profile and viewing “Personalization”. 

To sum it up, digital advertising targeting is an ever-evolving multifaceted approach that combines data collection, audience segmentation, and various targeting strategies to deliver relevant ads to potential customers. The best digital campaigns continually optimize for top performance, all while ensuring compliance with privacy regulations and user experience.

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