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Hope you all had a great weekend and are ready to dominate this week like the SEC dominates Women’s College Basketball!

This week we’re going to continue our segment on advertising, shifting our focus towards audience targeting.

Who do you want your ads to be shown to? How do you actually get in front of that demographic? How does who you target affect your costs?

These are all very important considerations when launching your marketing campaign, so strap in. Today’s lesson is a heater 🔥 🔥 🔥.

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Tools + Productivity

Strategy

Consider Coca-Cola.

They are a universally known and universally loved brand that sells a product that can be consumed by pretty much everyone alive. There are even health nuts and diabetics who indulge in Coke’s alternative products like Diet Coke and Coke Zero every now and then.

Because of Coke’s universally acceptable products and brand, it makes sense for them to advertise their products to the global population.

Their 2018 Super Bowl ad placement was quite literally about how there’s a Coke product for everyone.

Broad Targeting: When is it Useful?
Historically, Coke has adopted a broad marketing strategy. This essentially means they don’t target their ads towards any audience in particular.

This is desirable because, Super Bowl ads aside, they have to pay relatively low CPMs (remember from last week: Cost Per Mille, which is 1,000 impressions) to get their ads in front of people.

This works for them because it doesn’t matter who their ads get in front of - everyone who hears about Coke could be converted into a paying customer.

Broad ad targeting is useful because you don’t have to pay a premium for the advertising medium (Meta, Google, etc.) to get your ad in front of a specific audience.

If you don’t know who your target audience is, broad targeting could be a good way to find out who is engaging with your brand, but it is not a great long-term strategy.

Over time your CPC (Cost Per Click) will rise because, although you’re getting lots of impressions, the people seeing your ad don’t give a crap about it, so they don’t click on it or turn into a paying customer.

Although Coke is lucky to have a brand that is so beloved by and accessible to all kinds of consumers, even they recently shifted to a more targeted approach.

Given their expansive list of products, the company recently shifted towards a strategy that more directly caters their individual products to the most relevant targets.

According to a case study conducted by SimpliLearn, they target their core Coca-Cola product towards young people between age 10-35, and they target Diet Coke towards middle-aged and older adults who are diabetic or health-conscious.

The article explains a number of segmentation strategies Coke has implemented based on location, gender, and varied marketing channels, but the important takeaway is that even the most broadly-relevant consumer brands benefit from narrow ad targeting.

Narrow Targeting: Maximizing Conversions
Let’s take a moment to understand why targeting a narrow audience with your ads is usually more effective.

As mentioned before, you have to pay a little bit extra to get your audience in front of the right people.

If I set up a Google ad, and I want it to get in front of millennials that are interested in sports and endurance training, it’ll cost more per 1,000 impressions than if I set up an ad for my product to get in front of any random 1,000 people.

Although the cost per impression is higher, the former ad will have a much lower CPC, site engagement, and conversions to paying customers.

The danger with this method is seen in targeting the wrong parameters. In order to effectively target your ads in a narrow manner, you have to have a very clear understanding of your ICP (Ideal Customer Profile).

Let’s take another example, Rolex.

The luxury watch brand has a long history of sponsoring professional tennis players and events. Tennis is a sport rich with tradition, and it draws lots of high net worth individuals to its events.

However, rather than sponsoring all or even most ATP players and events, Rolex is very deliberate about which players/events it advertises with.

Although Rolex could advertise to a high net worth crowd by sponsoring every tournament on the schedule, they make sure their few partnerships target the richest of the rich, since these are the only people that will be buying any of their products. They go even more narrow than other exclusive luxury brands.

As far as events, Rolex sponsors the four Grand Slams, partnering most closely with Wimbledon, since it is the most exclusive event that draws the likes of globally famous celebrities, as well as the royal family.

When it comes to players, Rolex and Roger Federer have had a long standing relationship, in no small part due to the class and effortlessness that Federer displays in his game and personality. His style appeals to the old guard of tennis traditionalists, who are frequently characterized by their posh high-class backgrounds - perfect for Rolex.

Takeaways
Broad targeting involves reaching a wide audience without specific segmentation based on demographics, interests, or behaviors. It casts a wide net to maximize reach and exposure.

When iterating on your product and trying to figure out who your ideal customer is, you can benefit from broad advertising strategies, but as your understanding of product-market fit grows, you should shift towards a more narrow approach.

Narrow targeting involves honing in on specific audience segments based on demographics, interests, behaviors, or intent signals. It aims to deliver highly relevant ads to users who are more likely to engage and convert.

However, it's essential to proceed with caution when narrowing your targeting parameters. Without a clear understanding of your Ideal Customer Profile (ICP), there's a risk of misalignment between your ads and the intended audience.

Looking Ahead
Hope this week was a bit more conceptual than last week and not as jargon-heavy! Next week we’ll be diving into a bit more of the taxonomy behind ads. Which kinds of ads should you run? What does the way you present your product say about the product? Let us know if you liked this week’s newsletter below, and we’ll see you back in your inbox next Monday.

For a sneak peak into the rest of the month, check it out here:

Advertising 101
Week 1: Advertising Metrics
Week 2: Audience Targeting (This Week)
Week 3: Types of Ads
Week 4: Creating Your Ads
Week 5: Virality

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