Micro-targeting: What is it and how can marketers harness it?

If you are immersed in the marketing world, you may have heard the term ‘micro-targeting’.

What is micro-targeting?

Micro-targeting is a marketing strategy that utilises consumer data along with predictive analytics in order to design a more profitable, holistic marketing campaign. It predicts buying behaviour, interests and opinions by using the consumer’s demographic, psychographic, geographic and behavioural data. Different consumers have different motivational triggers, and micro-targeting influences the way someone behaves with the help of hyper-targeted advertising strategy. It creates customised, captivating messages, proof points or offers that subjectively appeal to people, then delivers them directly to individuals.

The objective of micro-targeting is to personalise the campaigns for each consumer and tailor them to their preferences. It can be used in several ways as part of your overall online marketing campaign or promotion, but the most important feature is to know the favoured communication channel of the targeted individuals, such as Instagram, YouTube or Pinterest. This approach increases consumer engagement, is more convincing than unrelated advertisements and results in better return of investment.

So what is the process of micro-targeting?

According to a Penn, Schoen and Berland Associate White Paper, there are several stages to the process of micro-targeting. Here is a brief rundown:

1. Record available relevant data for the target population and determine costs. Identify the variables that will accurately predict purchase behaviour.
2. Develop the psychographic division model to understand what drives behaviours in the target population.
3. Using the model, create a range of strategic and practical messages and offers.
4. Create mock-ups of messages and offers.
5. Test out the mock-ups and contending messages and offers.
6. Develop a step-by-step process that assigns each individual to a division and predicts how likely they will be able to purchase, based on what message and offer combination they could be shown.
7. Create an influencer model and develop a marketing communications strategy – a mix of targeted media, direct mail, the internet, targeted events and PR.
8. Develop final ideas. Test them out against competitors.
9. Finalise benefits and costs.
10. Field micro-targeting campaign by delivering the optimal message, proof points and offers to each individual.
11. Track the impact and update if needed.

How can marketers harness it?

In the past 10 years, the phenomenon and techniques related to micro-targeting have evolved. It is largely used by commercial direct marketers or companies in search of a targeted public, as it can dramatically improve sales. The technology that is available today makes micro-targeting one of the most potent and useful forms of marketing. Audiences can choose whether to divide themselves across multiple devices and social media channels, where consumers can deliver an endless feed of personalised content. This massive contribution of social media gives marketers plenty of avenues to go down when it comes to promoting strategies in the present consumerist society.

There is huge marketing potential for social networks, and their users – for example, Instagram influencers – make them credible for brand promoting. Due to our vast use of social media, we have the chance to speak directly to people based on their personal preferences and make effective use of individualisation. We are now also able to target micro-audiences on mass-scale. For a business, micro-targeting is a predominantly influential concept.

There are two reasons why micro-targeting is advancing in the world. Firstly, traditional mass media advertising is somewhat inefficient. It is an outdated approach; 90-95% of people who watch adverts in mass media are not even interested in or looking to buy what is being advertised. Secondly, the old model that mass media is largely based on is swiftly deteriorating. It is being outshone by a greater customer influencer and communications environment. As it is becoming increasingly difficult to saturate consumers with a single message, proof point or offer, it is imperative to start tailoring multiples of these to thousands of media and influencer sources. As technology is advancing, micro-targeting is, therefore, a viable alternative to the traditional mass media advertising approach.

What are the key success factors?

There are a number of key success factors to micro-targeting:
1. There must be in-depth Quantitative Research.
This form of research offers techniques that can analyse huge amounts of data, such as the millions of people in the target population and the infinite number of possible message and offer combinations. It can determine which combinations work best for each individual.

2. Use combat testing!
It is of the utmost importance to test messages, proof points and offers against competing offers. This will provide a far more accurate prediction of future impact. Using combat testing with conflicting comparisons increases accuracy from 70-90%.

3. Align the message, proof points and offer.
It is hard to obtain the full potential of micro-targeting unless you have these three things aligned. Targeting the offer as well as the message typically results in substantial increases in sales.

4. Re-allocate your marketing spend.
The traditional model of marketing is rather limited. The Internet and Public Relations are avenues that are much more micro-targeting friendly. The marketing spend for micro-targeting can be spread out evenly across low-cost ads, PR, direct mail, events, the Internet and research.

5. Don’t inform your opponent!
It is important not to tell your opponent that you are micro-targeting for your campaign, especially as they are most likely to be using the traditional mass media approach. If they are none the wiser as to what approach you are using, you will be ahead in terms of perceptual gains.

There are also other points to consider…

Although a number of factors lead micro-targeting to success, there are also some aspects to keep in mind. For example, it is wise to research the background and experience of PR and marketing teams, as some may lack the logic and understanding to design and lead a successful micro-targeting strategy.

It is essential to carefully manage costs, as the implementation of a micro-targeting campaign can be complex. Micro-targeting has an ill-fated reputation for being costly; the number of ‘small’ costs can quickly add up to a sizeable amount. However, this wouldn’t be the case if official regulations are in place.

Overall, micro-targeting is an admirable alternative to mass media as it generates familiarity and demands action. It presents the most relevant and specific information that is likely to be accepted by the individual. It provides most companies with a deeper and more precise customer insight as the messaging, offer and customer experience are aligned with individuals. Micro-targeting is emerging as potentially the most powerful technique for marketing strategies and other businesses to succeed.

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