Smart

Segmentation
Tactics
And how smart digital
marketers use connected data
to get granular and win big
10 Smart Segmentation Tactics
One size does not fit all
Segmentation is the difference
between talking directly to an audience
that’s interested in what you’re selling
and standing on the street corner with
a megaphone. It always has been. But the
rise of new digital channels, new data, and
new tactics have taken this segmentation
thing to a whole new level.
Today, the smartest marketers don’t treat
segmentation like an annual planning
exercise. They use it on a daily basis to
target their audiences with a laser-focus
and level of relevance that would make
a sales person blush.
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Which is great. Because it makes a lot
of important things possible:
• More efficient, cost-effective campaigns
that divert media spend away from people
who’d never buy in the first place.
• Consistently relevant customer
experiences that span different channels
like digital ads, emails, and websites.
• Highly relevant content, offers, and
recommendations that convert more
and annoy less.
0% Segmented
10 Smart Segmentation Tactics
The key is connected data
How you segment your audience will
depend on your company’s specific needs.
But the foundation of every successful
segmentation strategy is data. Data that
is cleansed, updated, and connected
regularly. Data that offers a connected
view of your prospects and customers
across online and offline channels.
Without it, both segmentation and
targeting suffer.
First, connected data builds a clearer
picture of your audiences. It allows
you to analyse customer and prospect
activity across touchpoints so that you
aren’t building segments based on
fragments of data that may conceal
your audience’s true behaviour.
[1] Rethinking Retail, Infosys study, 2013
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Then it allows you to connect those 70% of retailers have at least
segments to all your digital touchpoints one factor preventing them
and platforms so that everything you do
with Vendor A remains consistent with from creating a more integrated
Vendors B & C. customer experience, with
Now all the cool, dynamic display, social,
technology (38%) being the
most common factor missing.[1]
search, video and mobile ad units you’re
paying for can actually be used to their
full potential.
We’ll discuss a couple of ways to
connect your online and offline data
later in the eBook.
But first let’s take a look at how some of
the most sophisticated marketing teams
are using their connected data to power
a whole range of effective segmentation
and targeting tactics.
10 Smart Segmentation Tactics 4

10 smart
segmentation and
targeting tactics

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10 Smart Segmentation Tactics
Ad suppression
Ad suppression lets marketers
prevent certain ads from being
displayed to certain segments.
It may sound counter-intuitive (because
what advertiser wouldn’t want to, you know,
advertise). But it makes a lot of sense in
a number of situations.
• When the offer is irrelevant: You wouldn’t rate. Because you can make sure it isn’t
offer 15% off to a customer already getting skewed by people who’d never have
a 20% discount.
• When they’ve already converted:
You wouldn’t offer a great acquisition
deal to a loyal, returning customer when
you don’t need to.
• Or when they have an open customer
service ticket: And you want to
avoid overkill.
Why it’s a smart move
When you can accurately segment your
audience into lists like ‘people who’ve
already converted’ and ‘people talking to
sales agents’, you can avoid a lot of wasted
media spend on misplaced offers.
Also, by suppressing the right segments,
you can actually increase your conversion
converted in the first place.
Even better, you can make sure those
people don’t suffer the ill-effects of brand
fatigue (and plain old annoyance).
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Who’s using it?
Widely used in retail, one great example
of ad suppression actually comes
from politics.
In the US, parties used publicly available
lists of ‘early, postal voters’ (people who
vote by mail) to make sure they were only
targeting people who hadn’t voted yet.
Considering the fact that these lists
contain hundreds of thousands of names,
they avoided a huge amount in wasted
media spend.
10 Smart Segmentation Tactics 6

Data Onboarding
Data onboarding is the
process of matching your
offline customer data to your
online marketing platforms.
And it’s a big deal when it comes
to effective segmentation.
Because it connects your offline customer
data (such as in-store purchase data,
call centre data and demographics) to
online identifiers (like online devices
and digital IDs) in line with regional data
privacy legislation.
That means you can activate all your
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your campaigns.
10 Smart Segmentation Tactics
Look-alike modelling
Look-alike modelling is all about
understanding the key attributes
of a small subset of your most
active customers.
By understanding these attributes, you
can learn a lot about what makes these
customers tick. But more importantly,
you can then target other people who fit
the same bill.
It takes some data wrangling. But with
‘double and triple the results of standard
targeting[2]’, it’s a tactic worth adopting.
[2] Lookalike modelling: The what, why and how, LiveRamp, August 2015
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Why it’s a smart move Who’s using it?
Instead of looking for prospects and lists A leading bank wanted to expand its
by demographic attributes like gender direct marketing campaigns to reach
and age only, look-alike modelling gives prospects online.
you the chance to get a lot more specific
by including psychographic attributes and So they turned to data onboarding and
look-alike modelling to find prospects
behavioural data too.
that fit the criteria of their best customers.
For instance, if your best customers turn The results were impressive: 150%
out to be college students who read the improvement in response rates and
Financial Times and buy Red Bull by the a massive 40% improvement in ROI.
dozen, then it makes sense that your
targeting efforts shouldn’t be restricted
to college students alone.
By leveraging your offline customer data
and third-party data enrichment vendors,
you can build incredibly specific look-alike
models and target those who are likeliest
to buy.
10 Smart Segmentation Tactics
Segment-based retargeting
The most common form of retargeting
is a function of shopping basket
abandonment, where the pair of shoes
you nearly bought (but then didn’t)
follow you around the internet.
In this case, the only contextual data
available to those ad units is the fact that
you were looking at a certain product or
product range. While that’s a great place
to start, you can get a whole lot more
relevant when you add data about
your segments.
Why it’s a smart move
By tying your retargeting tactics to your
segmentation strategy you can actually
go a whole lot further than product-
centric retargeting. You can retarget
female customers who bought summer
shoes for their winter break in 2014.
That is, you can use retargeting ad units
to target them at different stages in the
customer decision journey, depending on
the kind of behaviour they’ve demonstrated
on your site and other platforms too.
If a certain segment of yours has a higher
propensity to buy during certain seasons,
then your retargeting ads can dynamically
deliver more relevant customised messages
to that segment, while targeting others
with more general acquisition offers.
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Who’s using it
Even though retargeting is most prominent
in the retail industry, it has been successful
in other verticals. For instance, one niche
insurance vendor that offered online quotes
in real-time (as opposed to over the phone)
used retargeting to make sure small-
business decision-makers completed
the request-a-quote form online.
Not only did users who left the form
midway come back after being retargeted,
a meaningful proportion of them actually
ended up converting into sales.
10 Smart Segmentation Tactics 9

CRM retargeting
CRM retargeting is all about
using the data stored in your
offline CRM systems (purchase
history, contract expiration
dates...the good stuff) to retarget
your customers online.
And it makes sense for any brand with
a CRM system and customers – so pretty
much anyone reading this sentence.
First, because sending acquisition deals
to customers is a waste of media spend and
just plain ineffective. And second, because
as any salesperson worth their salt will tell
you, you’re a whole lot likelier to sell to
someone you’ve already sold to before.
But even beyond retargeting, your offline
CRM data can give you a lot of important
insight about buying patterns and trends.
So it’s worth using it to fuel a lot of the
tactics we’re writing about in this eBook
such as ad suppression, look-alike
modelling, segmenting your loyalty
tiers, and reactivation.
NFL
10 Smart Segmentation Tactics
Segmenting loyalty tiers
If you think about it, marketers have used
loyalty tiers to segment their customers for
years. From tiered credit cards to frequent
flyer programmes, it’s been a good idea to
have ‘gold’ and ‘platinum’ members for some
time now.
So when it comes to digital marketing,
targeting those tiers with specific offers is
really just low-hanging fruit. And the smartest
digital marketers are already picking it.
a
Rebecc
Why it’s a smart move
By onboarding your offline customer data
and segmenting it into different loyalty tiers,
you can target those customers with unique
offers online. You can also optimise your
bidding strategy for audiences that are likely
to convert at a higher rate and spend more.
Your offers become more specific, you
maximise the value of your dynamic digital
ad units, publishers, and platforms and most
important of all – your most loyal customers
get exclusive experiences.
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Who’s using it?
As you’d imagine, this is a tactic most popular
among industries where loyalty tiers already
play a big role, such as financial services,
retail, and travel.
But even if you don’t already have a tier-
based loyalty program set up, it makes
a lot of sense to build one around your
offline customer data.
One of the most famous uses of loyalty tiers
is Starbucks Rewards where customers get
better offers the more they use Starbucks’
mobile application. And the more information
they share, the better the offers get. For
instance, gold card members get treats
and drinks for free on their birthdays.
10 Smart Segmentation Tactics
Dynamic creative and site optimisation
Home pages, emails, and ad
units have all evolved to become
dynamic containers capable of
assembling unique combinations
of content from multiple different
creative elements.
Back them up with a smart segmentation
programme and you have a living, breathing
campaign that can deliver exactly the right
experience to each consumer.
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Why it’s a smart move Who’s using it?
In its most basic form, dynamic creative While retailers have been quickest to
is used to make sure some people see adopt dynamic creative technology, their
one message and other people see popularity is rapidly growing across other
another. But the more segment data you industries. For instance, we’ve seen a
can activate, the more sophisticated your technology company run as many as 50
campaigns can become. home page variants that serve 50 different
segments based on their email database.
You may start with separate home pages
for prospects and customers. But once you In another case, a retailer in the beauty
include data on things like their purchase industry uses dynamic landing pages to
history and seasonal preferences, your showcase either their skincare or cosmetics
ability to make highly customised offers range based on the customer’s preferences.
starts to multiply.
For instance, you could target golf-lovers
and tennis-aficionados separately with
the same dynamic ad unit. Going one
step further, you could even target male
golf lovers in Australia and female golf
lovers in London with different creatives
depending on how sunny it’s going to
be next weekend.
Your customers get more relevant
experiences and you gain a platform
for testing more variants and options.
10 Smart Segmentation Tactics 12

The importance
of linking your data
Some marketing interactions
involve a consumer’s known
identity, such as sending an email.
Other interactions, like displaying
an online ad, happen when the
consumer is anonymous.
Most marketers struggle to connect the
dots across the customer journey and
lack a comprehensive, unified view of it.
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a huge loss. Because it means you can’t

create audience segments based on
a clear understanding of past interactions.
Even worse, you can’t then activate that
segment data and target those anonymous
users online.
The key to squaring this circle lies in
accurately linking data about online
and offline interactions across channels
and devices in line with regional data
protection legislation.
We’ll stop short of tooting our own horn
here, but if that’s a problem you need
solving, we should talk.
10 Smart Segmentation Tactics
Targeting based on
anonymous online activity
Just because so many digital
interactions are anonymous
doesn’t mean you can’t use them
to create actionable segments.
An anonymous visitor who trawls the
sunglasses’ section of your website is
still, clearly, in your sunglass-interested
segment. You don’t know who they are but
you know their behaviour and their browser.
Why it’s a smart move
Used intelligently, behaviour-based
segments can lead to super-relevant
marketing messages. You don’t need to
wait for someone to fill out a form to reach
them with more relevant stories wherever
you interact with them.
For instance, if someone on an electronics
website spent half an hour on a page
about a certain television, it makes a lot of
sense to start targeting them as someone
interested in that television.
So once you link their anonymous browsing
data to your anonymous targeting data,
you can start sending them more targeted
acquisition deals and complimentary
offers for things like HDMI cables and
gaming consoles.
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Who’s using it
In the car industry, one brand uses
anonymous data from its display campaigns
and site traffic to determine which cars
someone’s interested in and how high
their propensity to buy actually is.
By doing this, they can
deliver unique homepage options to
different users (making the car they’re
interested in the hero) and analyse which
stage of the journey a user is in. Based
on all of this, they then programmatically
determine which messages and offers
should be made next.
10 Smart Segmentation Tactics
Geo-targeting
Geo-targeting has gone from
digital marketer’s fantasy
to tangible reality in a very
short time.
The age-old fantasy of ‘man walks into
store and store offers man discount’ may
not be as common as marketers had
once expected, but there are a number
of emerging ways to use location data
to customise offers.
Why it’s a smart move
At the very least, geo-targeting is good
customer experience hygiene. It makes
sure home pages are in the right language,
prices are in the right currency, and whether
or not products are available in your country.
Taken a few steps further, geo-targeting can
be used to personalise messages and even
push certain offers depending on where
someone is within a brick-and-mortar store.
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Who’s using it?
Use of geo-targeting as an effective
segmentation tactic is still in its infancy,
but there are some interesting uses for the
technology. For instance, one hospitality
brand uses geo-targeted offers to welcome
customers when they check-in and alert
them to offers to local activities and stores.
10 Smart Segmentation Tactics
Segmenting based on
offline purchase behaviour
For all the noise and interest
generated by eCommerce
and digital marketing, the vast
majority of retail purchases
still happen in-store. Which
means the vast majority of
useful behavioural data on your
customers is stored offline.
So another smart move for the
segmentation-curious marketer is to
tap into the wealth of in-store purchasing
data you have stored offline.
Why it’s a smart move
Even though most of your efforts to identify,
attract, and persuade your prospects
happen online, the proof of that pudding
lives offline. By tapping into your offline
transactional data, you can create
segmentations based on the products
that were actually sold the most.
That means being able to connect the
dots between your online activities and their
offline impact. For starters, this makes for
highly specific targeting opportunities in the
context of other tactics like ad suppression
and look-alike modelling.
But on a more macro level, this gives you
the ability to spot buying patterns in the data
and inform the rest of your marketing.
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Another valuable use of offline data is to
connect your call centre data with your
digital ad units to either suppress certain
segments or give them special offers.
Who’s using it?
Across industries, leading brands are using
data onboarding to activate their offline
transactional data.
One particularly interesting use case is in
the automotive industry where offline data
about car purchases is used to inform the
targeting activities of insurance products.
10 Smart Segmentation Tactics
Segment-based
cross-selling and upselling
Smart cross-selling and
upselling are essential to
effective digital marketing.
But when the only context you have to
consider is the product page someone’s
on, your ability to make a relevant
recommendation is limited. So when
you throw into the mix their purchase
history and behaviour data, you can start
to make more relevant recommendations
based on the segment they belong to.
Why it’s a smart move
For one thing, a segment-based view
of recommendations would inform your
strategies across channels. That is,
if someone bought a product on your
website, it isn’t enough to make the
right recommendation on your website.
The smart thing to do is to advertise the
complimentary product to them through
your search, mobile, social, and display
channels too.
Even better, you can understand how
customers use different channels and tailor
your messaging to match. For instance, if
they use mobile to browse, then you can run
brand recognition campaigns on mobile and
more specific product recommendations
when they’re back on their desktops.
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The missing link, of course, is linked
or connected data (see page 3). But it
makes a huge difference to both your
segmentation and cross-sell strategies.
Another benefit of segment-based
recommendations is that the feedback loop
created by testing offers and measuring
responses can then be used to inform
the rest of your segmentation tactics.
Who’s using it?
One great example of smart segment-
based upselling is used by large banks.
Here, customers who’ve recently bought
a credit card are targeted with offers on
insurance products depending on the kinds
of purchases they’ve made most recently.
10 Smart Segmentation Tactics
Reactivation
Reactivation is all about
identifying the customers who
haven’t engaged with you in a
while and targeting them with
unique, relevant offers.
Instead of ignoring this segment like a
foregone conclusion, it makes sense to
gauge when the right time to re-engage
is and find out what offers really work.
Why it’s a smart move
It makes a lot of sense to treat dormant
customers like a separate segment.
On the one hand, they are former
customers so they’re likelier to reconvert.
But on the other, getting them to convert
again can be even harder than pursuing
net new customers.
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Who’s using it?
A number of really smart marketers are
using reactivation tactics in interesting
ways. In subscription-based businesses
like magazines and publishing, it’s been
proven that it’s a lot easier to get people
to re-engage with content, than it is to
engage new prospects.
Another great case for reactivation is in
niche holiday resorts where customers
may not come back for several years at
a time. A smart reactivation strategy here
can be the difference between repeat,
high-value business and a forgotten story
in a Facebook album.
10 Smart Segmentation Tactics
Smart marketing
doesn’t have to be hard
It’s funny how after years of
innovation and digitisation, one
of marketing’s most powerful
tools may be the oldest trick
in its book.
Segmentation and targeting has been
around for decades. But it’s only in the
last few years that data and technology
have come together to make it what
it is today.
Intelligent, proactive, and highly conducive
to testing, effective segmentation in the
digital age is crucial to marketing success.
That being said, it’s important to remember
that at the end of the day, the success of any
segmentation tactic comes down to your
ability to connect your data. In particular,
as we’ve discussed, offline data holds the
key to effective segmentation.
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Connect to, understand and then activate
your offline data across all your digital
channels, and there’s very little you won’t
be able to accomplish.
The technology exists, the data exists,
and the willingness to deliver more targeted
marketing exists – smart segmentation isn’t
just a tactic.
It’s a data-driven marketer’s imperative.
10 Smart Segmentation Tactics
We’re LiveRamp.
And we’re dedicated to
connecting the marketing
ecosystem. We help smart
marketers connect their
online and offline data
with Data Onboarding.
Let’s talk.
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No matter how sophisticated your
attribution models are, without a connected
view of both online and offline channels,
you’re flying half-blind.
Find out how to connect your online and
offline data. Read the next in series ebook.
liveramp.uk
Half-Blind
Attribution
Modelling
How onboarding your data connects your
marketing so you can see what really works