Not Too Broad, Not Too Narrow – Getting Your Target Audience ‘Just Right’
April 29, 2014
Finding the ideal audience for your advertising campaign often plays out like a scene from a time told fairy tale. You’ve trekked through the campaign set up woods, only to find yourself faced with the inevitable challenge of finding a target audience that’s not too big (who wants clicks that don’t become customers?), not too small (I can’t afford to pay $15 per click!), but just right. Finding this perfect balance of audience quality, size, and of course price is the key combination for driving return on ad spend.
So how do you know if your audience is too broad, too narrow or “just right?” We’ve highlighted strategies for narrowing your audience to the optimal size, increasing cost efficiency, and understanding the signals that your audience is too broad or narrow to help you pinpoint your best performing audience.
Start Broad To Collect Data
If you started out with too large of an audience, don’t worry – you’re on the right track. We actually recommend starting out with a very broad audience, then steadily narrowing with additional qualifiers as you gain insight into what audiences resonate most with your campaign. A broader audience can help (although, inefficiently) gather some level of data and traction, so that you can determine how to narrow your audience. Starting out with an audience that is too narrow won’t output the amount of data necessary to draw insights or conclusions. If your campaign is struggling to drive clicks or is targeting and audience that is overly saturated due to fierce competition from other advertisers, it could be that your audience needs to be broader.
Focus on Efficient Conversions
As you refine your targeting from “people in the US who like cooking,” to “people in the US that like cooking, are female, live in New Orleans, and have kids,” your reach will naturally become smaller, while each acquisition becomes increasingly expensive. What’s tricky is knowing when you’ve reached your optimal audience size and should stop applying additional layers of targeting. An optimal audience is targeted enough to drive efficient click through rates (CTR) and conversion rates (CR), but broad enough to a reach a substantial enough audience at a reasonable price. It is essential to set your bid strategy with this quality/size balance in mind and not make the mistake of prioritizing one too heavily over the other. Conversion rates tend to take precedence over price, but if you’re paying more than the lifetime value of your customer and therefore not producing ROAS, your efforts are wasted. Strategize your campaign with an efficient conversion rate, and you’ll find the “Sweet Spot” where bid price balances with your desired conversion rate.
Don’t Be Afraid of Small Audiences
A highly targeted audience produces higher CTRs and CRs, due to greater relevancy. It’s all about identifying your niche, because niche audiences, while tiny in comparison to broad campaigns have built-in purchasing intent.
Don’t be afraid of small audiences, because the power of your optimization will increase as your number of ads increases. The granularity at which you can pinpoint winners and losers within your highly refined audience, and your ability to optimize the “wins” will also grow, and can help inform later campaigns.
But Don’t Get Too Narrow
If your campaign’s CTR is low even when you are bidding higher than is usual, it is a clear indication that your audience is either disinterested or too narrow. Disinterest could be a sign that your creative needs updating – determine if this is the culprit by switching up your creative and then A/B testing it. A creative refresh should kickstart engagement rates if oversaturation is the issue; however if the engagement remains flat despite a fresh approach, odds are your audience is too narrow and needs to be expanded. Eliminate a few key qualifiers to open your audience to a slightly larger demographic, or consider swapping in and out similar qualifiers that may have a larger reach (i.e. if you’re targeting people interested in dresses on Facebook, swap this out for people interested in women’s clothing to reach 27,000 more people)
“Over Target” in Certain Circumstances
Certain campaigns with niche audiences or complicated conversion funnels naturally require highly targeted audiences from the get-go and won’t benefit from a “start broad” approach. Long or complex conversion funnels – like the ones for travel and automotive – or direct response campaigns aiming to drive a fairly niche action or targeting a niche group will require very targeted campaigns. A niche action could be “Buy a New Tesla,” while a niche group could be, “People in the market for high end video equipment.” Long conversion funnels require investment up front, and therefore do not benefit from extensive testing or attending to users that are not high intent. Thus, one would need very targeted campaigns to not waste any time or effort.
In these time-compressed campaigns narrow targeting is crucial. Flip our previous advice and narrow your audience as quickly as possible, then reverse engineer your campaign and monitor if your bid price is keeping pace with your desired CTR and CR. If you’re not getting the traction you need, assess your bid-price strategy or scale your audience using lookalike and Custom Audiences.
No campaign finds its perfect target right off the bat, but if you keep in mind the relationship between your bid-price, CTR, and conversion rate, you’ll know when your campaign is reaching the right size audience, and you’ll find yourself converting more of the right people at the right price.