Tuesday, March 19, 2013

Social Media Analytics: Market Segmentation in the New World.

Market Segmentation, even to many marketers, is a fuzzy concept that is recognized as difficult and time consuming.  The thought of market segmentation conjuors up thoughts lengthy surveys, followed by an even longer analysis. Coupled with the fear of being late to market, it is little wonder why marketers struggle to properly segment their consumers.  

Another approach businesses try is to compile an analysis of their customer data in their contact database.  In the past, to target a runner with a running-related product, I would advertise  or run a joint campaign with a vertical publication, say, "Runner’s World". Alternatively, I would query my customer database trying to find good targets based on data attributes (geography, industry segment, engagement level, etc).

Presuming, you captured the right details to segment, your customer data records are a good start - for marketing existing products. New products, or those developed to target another market for customers you don’t yet have probably shouldn’t have the same messaging and targeting.

As a result of these challenges and disparate data, businesses may choose to punt and rely on instinct to partition customers or rely on old data or worse, their instinct. In social media, companies can gather more information to customize messages based on the interactions over a long-term engagement. But it is near impossible to scale and personalize marketing based on individual social media engagement. This is where market segmentation based on social media behavior, comes into play.

New World: Lifestyle segmentation with social media

We all know that the success of a marketing campaign depends on finding an effective way to reach our audience and communicate with them effectively. Social media provides a near-infinite panel to draw rich insight - that is timely, accurate, and cost effective.  Nowhere else can marketers capture audiences interests and desires across geographic boundaries without millions of dollars, hundreds of surveyors, and months of research.  

Social media profiling is more than capturing data on individuals. To us, one data point is worthless.  Marketers want thousands or millions of data to show a trend, so we can target advertising and products that the consumer actually wants.  People complain about advertising they don’t want or aspire to own, having insight into showing consumer the coffee coupon they actually want at 9 pm at night is magical.

Soccer moms, urban dwellers, pet lovers, fashion divas, computer geeks and all the other behavioral lifestyles can all be captured and segmented with social media. How? Well, a consumers online behavior closely mimics their offline likes and interests.  Why? People don’t visit, share (likes, tweet, hashtag, etc.) interests that do not resonate with them.  

With the right set of social media profiling tools (you guessed it), you can capture segments as granular as you wish.  With social media tools, there is no longer any valid excuse to not make data-driven marketing decisions, use passive marketing, or “intuition”.

Social media tools (like ours) lets marketers plan, target, and measure a marketing campaign or product launch.  Planning involves identifying and mapping the lifestyle interests (we call them affinities) to logical segments. In the running example we mentioned above, this could entail identifying lifestyle traits of suburban mom’s looking for children’s shoes, marathon runners, and fashion conscious consumers.    

Once the segments are identified, a marketer would determine the appropriate product mix and marketing messaging that best resonates with each lifestyle.  Next, marketers would target users accordingly.  Social media is great for identifying affinities with celebrities and athletes.  Potentially, the marketer could choose to sponsor a triathlete that consumers have expressed an interest to target a particular segment or utilize the identified lifestyle interests to target keywords for each segment.  

Several studies have shown how increased social media engagement is an indicator of a campaign’s success. Regardless of how well designed the marketing campaign is, monitoring and measurement are critical to optimizing.  Evaluating engagement, affinity growth, fan growth, and sentiment are all steps to ensuring the campaign stays on track.  

Never before have we been able to delve into the minds of consumers with such speed and completeness as offered with social media insight and the advent of big data. The trick to doing successfully, is not to target each micro-segment based on every distinct lifestyle, but to intelligently segment them into so audiences can react with each message and so each segment can work with your ad buy minimums and marketing budgets - someone still needs to produce the advertising media.