Minimize Wasted Ad Spend with Customer Segmentation in Google Analytics

April 6, 2020

Every day your brand experiences hundreds of thousands of user interactions across your channels and devices, both online and offline. Though each of these users has individual goals and intentions while engaging with your brand, you can still identify patterns within this data and segment similar users based on their shared characteristics.

Segmenting your customers from this data-driven perspective provides deeper insight into behavior, demographics, and more. Most importantly, you can create a customer journey and develop strategies based on data-driven insights over a period of time. This all contributes to overall increased marketing efficiency.

First, what is Customer Segmentation anyway?

In simple words, Customer Segmentation or Audience Segmentation is a way you can break down your users into smaller groups (i.e. segments) through predefined criteria. Determining which audiences drive the most revenue for your brand enables you to customize your marketing messaging and set up more accurate targeting for increased ROAS and lower advertising costs. Additionally, mapping out the customer journey with Customer Segmentation in Google Analytics helps reveal specific trends in your business providing marketers with insights they can take action on. 

So, what does Customer Segmentation actually do for you?

Generate incremental ROAS and minimize wasted ad spend: Customer segmentation helps marketers understand the value generated by different audience types. Understanding who your Low, Medium and High-Value customers are allows you to more effectively reallocate budget from your low-value customers to your high-value ones. Optimizing your campaign strategy and focusing marketing effort on the key high-value audiences will generate high ROAS by cutting wasted ad spend on lower revenue customer segments.

Demonstrate quantitative impact: Online advertisers can measure campaign effectiveness at the audience level through the customer segmentation feature. This measurement helps you understand high-value audience segments, and provides the insight needed to tailor personalized messaging to each audience. As a result, you’ll be able to filter your data at the campaign level for clearer insights into your audience segments. This insight minimizes wasted ad spend by highlighting data that supports increased budget towards engaged users who are most likely to convert (ie high-value).

Amplify customer retention: Customer segmentation gives marketers a detailed view of how their most loyal customers feel and engage with their brand. This view helps you identify key themes and attributes of your customer base, providing insights such as what kinds of actions your target audience takes before, during, and after visiting your site. Understanding your most opportune areas for improved customer experience provides marketers with customer retention strategies that deliver actionable insights. This data can help you tailor ad copy and imagery that moves users along the customer journey, speaking specifically to them and their needs, and through to conversion. 

How exactly do you leverage Customer Segmentation?

Segments allow you to separate the data suite to explore and define your business trends. For instance, you can discover seasonality trends: perhaps users shopping during the summer purchase more of a particular type of product than in spring. As a result, you can put more effort into advertising a certain line of products in the summertime. 

So how does this apply to your next steps as a marketer leveraging segmentation? Once you’ve segmented users in a way that supports your business trends, you can then create audiences for retargeting campaigns for the segment of users who visited a particular page of your site. 

Apart from standard segmentation options available for Google Analytics free customers, enterprise analytics solution Google Analytics 360 offers an Advanced Customer Segmentation Analysis tool with more in-depth techniques and examination capabilities to explore, compare and take action on your first-party data. 

A more sophisticated audience segmentation analysis helps marketers understand the revenue generated by distinct user types. This way, marketers can enhance the efficiency of their advertising strategy by investing their marketing budget in campaigns targeted at their highest-valued audiences. Data-informed personalized messaging paired with insights identifying the customers who generate the most revenue for your brand supports customer acquisition and gives marketers a detailed view into each customer type’s journey. Understanding the customer at a granular level creates an elevated and strategic customer experience. Enhancing the customer experience through this advanced analysis improves ROI and streamlines the path to conversion. 

What are my next steps for a Customer Segmentation marketing strategy?

The more you know your customers, the more conversions you drive, and the faster you reach your business goals. A successful Customer Segmentation strategy moves this narrative forward by helping marketers to:

The most important thing to your business is your customers and so your marketing strategy should aim to constantly enhance and personalize your customer’s experience with your brand throughout their journey to conversion. 

The Bottom Line

Leveraging Customer Segmentation within Google Analytics is beneficial for every business working on marketing strategy and implementation. No matter what your specific industry, whether it’s e-commerce, travel or insurance, it’s essential for all marketers need to know who their customers are in order to deliver personalized messages to the right people at the right time and in the right way. This is the key to maximizing marketing budget, generating a positive return on ad spend, and increasing customer retention and conversion rates.

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