Segmenting Audiences to Drive Income

A two-tiered approach to segmentation would drive maximum results during 2015.

$180,000,000
$160,000,000 $168,867,232
$140,000,000 $151,496,083
$120,000,000
$100,000,000
$80,000,000 $93,711,488 $94,908,407
$60,000,000 $69,640,339
$40,000,000
$20,000,000
$0
2006 Actual 2007 Base Scenario 1 Scenario 2 Scenario 3

• Scenario 3 which targets both Fashionistas and Planners & Shoppers is estimated to achieve a margin of
about 39% - higher than all other segmentation options.

• This proposal is also a safer option for TFC as this strategy includes targeting both the narrow group of
Fashionistas (~15% of households) where Planners & Shoppers accounts for a significantly larger
percentage of households (~35%)1.

• By implementing profile-based segmentation2, TFC can target these key viewers in a cost-effective manner
which will help grow the base that they need.
Digital Marketing Channels
TFC must attract new viewers to their programming to be able to achieve the CPM
needed (+25%-75%) to obtain estimated revenue goals.

Key areas of opportunity include:

• Digital Video
• Social Media
• Blogger Outreach
• Affiliate Advertising
• PPC Advertising
• Web Partnerships
• Retargeting Campaigns

With spending on online video expected to grow nearly 21% each year up until 20193, there is no
slowing down. TFC can see this as both a new form of competition from online streaming services,
and as an opportunity for growth through advertising.
Recommended Digital Media Messaging
A key to growing ratings is to develop a core group of followers of TFC. The proposed
media mix is key to achieving this goal and can be measured, adjusted and tracked.

• Digital Video Advertising

– With an average click-thru rate of around 1.84%, digital video
ads are some of the highest rates in digital advertising4.
– In addition, this advertising channel can be highly targeted to
match your ads with the right audience.

• Social Media
– With the target audience being a younger (~18-34)
demographic, highly-visual sites such as Pinterest and Instagram
are a strategic option for TFC.
– Organically these sites could have a positive impact, but
promoted pins and posts, would get the message to
Fashionistas, Shoppers & Planners.

• Blogger Outreach & Web Partnerships

– By partnering with fashion bloggers and fashion web sites, TFC
can directly target those highly-invested in fashion with
messaging regarding new programming.

5
Communication Media for TFC
Social media, digital video and blogging/partnerships are three key aspects of online
marketing that are predicted to grow exponentially over the next few years.

94% lift and 80% recall from YouTube ads.6

Blogs are often seen as a trusted source
for recommendations and reviews,7 and
tend to have very loyal followers.

Highly-visual sites such as Instagram,

Pinterest and Tumblr are seeing strong
growth in users, especially in the prime
demographic targeted – viewers, 16 – 34
in age .8
Recommendations for Action
As stated by Dana Wheeler, “Deliver quality audiences, as demanded by advertisers.”

Wheeler determined that TFC must both increase ratings and increase advertising pricing. To do
so, I recommend the following action items for digital implementation:

• Invest in digital video advertising.

– Create ads to run on sites such as Hulu and YouTube. Target these ads to run during programs and videos that are
targeting the same demographic.

• Begin an aggressive social media campaign.

– At a minimum, focus on highly-visual sites such as Instagram and Pinterest.

• Form partnerships with fashion websites and fashion bloggers.

– Begin building that network to help drive traffic, content and quality links for TFC website.

• Test and measure heavily.

– With this investment and significant shift in TFC’s marketing strategy, it is imperative that they measure results of each
campaign. This way they can focus on what drives the most ROI and scale back on any new channels that show limited
growth or decline.
Appendix
Appendix