How to Set Up Audience Segmentation for Retargeting

If, as an advertiser, the performance (or the lack of it) of your retargeting campaign is keeping you awake at night, then it might be worth to pause and look at how well you have segmented your audience. This is often one of the biggest mistakes that advertisers who are starting retargeting campaigns can make (learn all about the common retargeting mistakes and how to avoid them in this article). Not segmenting users can cause retargeting campaigns to be less effective, leading to wasted impressions as well as user frustration. For an eCommerce app, for instance, if a user has a pair of shoes already in their cart, while another user has only started browsing for a dress, it doesn’t make sense to show the same ad to both the users as they are at different stages in the purchase funnel and with different needs.

App retargeting has proven to bring back customers and positively affect the entire customer journey for advertisers, ultimately impacting the ROAS. Advertisers who employ audience segmentation during retargeting can ensure that the ads that are served are relevant to the users’ interests.

Setting up audience segmentation doesn’t have to be complex. Sure, it depends on a variety of factors, but in this blog post we break down the 3 steps to consider when setting up audience segmentation.

1. Define the Goals

First of all, as an advertiser you should ask yourself what your goal is for your app and its users. Is it retention you are after, is it ROAS or is it target events you are looking to trigger within your user base?

Based on that you can make a decision on how to segment your users based on their activity and how to tailor the messaging to trigger engagement.

2. Define the Events and Audiences

Once you have broken down the goals of the campaign, the next step is to understand how an audience and event is defined. In this case, an event can be defined as any action item such as “Add to Cart” or “Purchase”. Based on the goals of the campaign, your audience can be segmented in various different ways: are you looking to cross-sell an existing customer, or target users who have installed the app but not made a purchase, is your user the one who hasn’t opened the app in the last 10 days? Ask these questions to understand how granular your audience lists should look like. Advertisers can create smart segments to drive revenues as well as boost engagement on the basis of event selection. You can also go a step further to include or remove certain users to create more tailored audience segments by either including two more events or even excluding an event, such as in the two examples below:

3. Consider Frequency and Recency

When creating custom audiences, it is also important to factor in frequency and recency. While the former refers to the number of times that each of the specified events should have occurred, recency refers to the number of days or the range during which the user has performed specific events. These two factors help advertisers gauge user interest, and build segments based on the events and can help to set budgets wisely based on these insights.

Quick Summary

Audience segmentation is a key lever in retargeting success that gives advertisers a control of who they reach out to. While there are many ways to segment your audiences, it is important that advertisers work with tools that empower them to directly stream in-app events via an API, funneling them on timing and frequency, to help create efficient retargeting campaigns and maximize ROAS. Technological capabilities of a retargeting partner also allow for rules to be built using a boolean logic that can help advertisers reach the audience at a more granular level. When working with a retargeting partner for audience segmentation, advertisers should also look out for the flexibility to adjust retargeting campaigns and user segmentation based on the sophisticated reporting to help achieve better precision, efficiency and ultimately, maximize value and revenue.

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