1. Audience segmentation
2. Targeting
3. Positioning

Audience Segmentation

We normally segment our audience based on the following characteristics:

1. Geographical - location like country, dma, city, zip
2. Demograhical - gender, age, income, education, culture and job.
3. Behavioral - online/offline shopping behavior, web usage, website loyalty, prior purchases.
4. Psychographical - social class, lifestyle, personality, type

For a market segment to be useful to marketers, it should meet some certain criteria:

1. Measurable and obtainable
2. Accessible with minimum of cost and effort
3. Large enough to be profitable

Targeting

How to target the segment you chose? There are many ways that you can do it: email, banner advertising or viral marketing. Here I will not go through each of them. I will focus on banner ad with behavioral targeting. The idea of advertisement is to drive more sell and profit to the company. To do that, you need to be targeted in order to make the advertiseing dollars you spent more effective. Segmentation is a good start. After that, you need to understand that the buying cycle of your product. It normally drives from customers’ needs. If there is a need, users normally start to do the information gathering and the buying window is open at that time. If you successfully push your relevant ads with the right message to them at that time, there is good chance they will react on your ad. The idea is simple but in practice it involves a lots of work. First, we need to gather enough information to segment our users. Normally, online traffic stream doesn’t contain demographic and psychographic info. That is why big giants like Google pay top dollars to buy the social networking site. They are not buying their tech but the huge user-based and site-stickiness.