2019

Digital Audience Segmentation Why behaviors beat the basics? How to use online data

to segment, acquire, and re-engage consumers

Digital Audience Segmentation | 2

The ways in which marketers segment their customers are changing.

According to a 2019 Marketing Week survey, demographics, such as age and

gender, are being replaced by psychographic and behavioral segmentation.

Consumer life stages and online behaviors, such as search and purchase

activity, are now more favored by marketers. But the sheer amount of data has

left the industry challenged and overwhelmed. What is the “best” and most

efficient way to segment the customer base?

Should they use:

1) attitudinal attributes to understand their customers’ motivations and

interests,

2) purchase and CRM data to target subsets of existing customers,

3) search and browsing behaviors to target completely new customers, or all of

the above?

In this report, Hitwise presents our guide to audience segmentation. Our

data set combines online behavioral data with attitudinal, demographic, and

geographic variables. This allows us to create bespoke segments tailored to our

clients’ strategy and customer objectives.

Our answer then to the best segmentation method is that it depends on your

objective. In this report, we spell out how segmentations can vary depending

on key objectives, such as acquiring new audiences, combating competition,

and growing the customer base.

INTRODUCTION

Digital Audience Segmentation | 3

Does your business use audience segments?

What segmentation method is best for your business?INTRODUCTION

Demographics(age, gender)

Psychographic(life stage, attitude)

Geographic(country, city)

Behavioral(search, browse,

purchase)

Are your segments clearly understood and aligned across the business?

Are your segments

reviewed on a regular basis?

Then read on!

What variables

do you use to segment audiences?

Conclusion – there is no “one” best method to audience segmentation.

Objectives, agility and flexibility need to be built into your marketing strategy. Read on for key examples.

YES

START HERE

YES YES

NO NO NO

NO

Whether you use segmentation today or not, take this quick quiz to get a sense for how others are segmenting customers.

PART I: SEGMENT FOR ACQUISITION

How can Mercedes acquire a new

electric vehicle audience?

PART II: SEGMENT FOR OPTIMIZATION

How can British Airways optimize

their direct bookings?

PART III: SEGMENT FOR ENGAGEMENT

How can Vogue grow their loyal

readership?

Segment by Strategic Objective WHAT’S INSIDE

Digital Audience Segmentation | 5

“Electric/Hybrid Car” Searches

PART I: SEGMENT FOR ACQUISITION

Mercedes’ new electric car

How can Mercedes acquire a new electric car audience?

New car sales in Australia fell by -7.9% in Q1 2019,

marking 12 consecutive months of decline year-on-year.

But there is one bright light for the industry - the intent

to purchase electric and hybrid vehicles has grown

according to a Roy Morgan study.

The October launch of Mercedes’ first all-electric vehicle,

the EQC, couldn’t come at a better time. Visits to the

most popular models on their site, like the C-Class

and A-Class, have dipped -6% and -20% in April YoY,

respectively.

How can Mercedes attract a new electric vehicle audience before the EQC launch?

SEGMENT FOR ACQUISITION

2018 Searches 2019 Searches

02/16 03/02 04/1303/16 04/2703/30 05/11

Searches were 87% higher this year,

thanks to the electric car debate during

the Australian federal election.

Digital Audience Segmentation | 6

Identify the “Affluent Electric Car Searcher” Mercedes can first identify consumers who are interested in and searching for electric or hybrid cars.

The EQC comes with a hefty price tag of AUD $150K. So by applying an income threshold, like households that earn above

AUD $100K, Mercedes can pinpoint an affluent electric car audience.

Inputting both conditions of electric car searches and household income, Mercedes has a target audience of 63K unique users.

SEGMENT FOR ACQUISITION

Affluent Electric Vehicle SearchersSegmentation

Search Inputs

Demographic Inputs

Audience Opportunity

Variations of “electric car”

Variations of “hybrid car”

Household income over $100K

63K unique users(16 weeks to May 25, 2019)

OR

AND

Affluent Electric Car Audience

TOP TAKEAWAY: Online behaviors, such as searches, act as key inputs to finding new and interested customers. Additional thresholds,

such as household income, can further refine your target audience. Insights into their browsing behaviors can feed directly into your

marketing campaigns, such as display or content.

Pinpoint where to best advertise Mercedes would want to know where they stand compared to the competition. The brand ranks fourth in terms of car

manufacturer sites, with Tesla leading with 50% greater reach.

By looking at their behaviors on Media sites, the affluent electric car audience is more likely to visit Drive, Which Car, and

Motoring than the average online consumer. To close the gap, Mercedes could then place EQC reviews on these sites, or

display ads to drive interest with their target audience.

SEGMENT FOR ACQUISITION

Affluent Electric Vehicle Audience

Tesla

Toyota

Hyundai

Mercedes-Benz

Mazda

11.8%

10.5%

10.2%

7.0%

6.7%

Drive

Which Car

Motoring

Car Advice

Auto Barn

3.5X

2.7X

2.6X

2.5X

2.3X

% Reach – Competitor Brands Reach Index – Auto Sites

Mercedes ranks

fourth for the affluent

electric car audience.

Target publishers with

greater reach to build

content and display.

Digital Audience Segmentation | 8

British Airways vs. Ryanair - # Browsers Per Week

Airline Browsers vs. Bookers According to a recent Expedia study, the average

consumer visits 38 sites before making a travel

booking. The average duration from browsing to

booking takes about 45 days.

For top UK airlines, Ryanair and British Airways, the

number of browsers, those who visit the site but

don’t book, exceeds 400K each week. The overlap

between the two airlines is also significant.

So, how can an airline like British Airways segment their browsers, and competitors’ browsers, to optimize direct bookings?

SEGMENT FOR OPTIMIZATION

PART II: SEGMENT FOR OPTIMIZATION

How can British Airways optimize their direct bookings?

British AirwaysRyanair

3OOK

6OOK

9OOK

02/09 02/23 04/0603/09 04/2003/23

Ryanair averages

740K Browsers

per week

British Airways

averages 484K

Browsers per week

Digital Audience Segmentation | 9

Discover the British Airways’ Browser There are two “browser” segments that British Airways could target:

1. British Airways’ Browsers, which include people who visit their site, but book elsewhere

2. Targeted Ryanair’s Browsers, which include Ryanair’s browsers who have viewed British Airways’ site.

Over a 12-week period, British Airways attracted almost 3M direct browsers. The airline also has an additional 660K

browsers that they could “poach” from Ryanair.

SEGMENT FOR OPTIMIZATION

British Airways Browsers

Visit Inputs

Purchase Inputs

Audience Opportunity

AND AND

2.8M unique users

(12 weeks to May 5, 2019)

Visits British Airways

Does NOT book on British Airways

Targeted Ryanair Browsers

660K unique users

(12 weeks to May 5, 2019)

ANDVisits British

Airways

Does NOT book on Ryanair

Visits Ryanair

British Airways attracted

almost 3M direct browsers —

an additional 660K browsers

that they could “poach” from

Ryanair.

TOP TAKEAWAY: A number of industries, from retail, travel to finance, face the challenge of converting browsers into buyers. Quantify

how many consumers you are not converting directly. Use digital behavioral analysis and variables, like geography, to refine regional

promotions to win them back.

Win back your browsers After visiting their site, British Airways’ browsers

clicked onto metasearch sites, like Skyscanner and

Google Flights, indicating that they have restarted

their search journeys.

By combining geographic data with search data,

British Airways can also pinpoint their browsers’ routes of interest. This segment were more likely to reside in

London, Liverpool, and Cambridge, and had searched

for long-haul flights to New York and Orlando.

These insights can help British Airways refine their

flight promotions and paid search to win back these

“lost” customers.

SEARCH FOR OPTIMIZATION

Which routes are your browsers looking for? (index)

Top Residence

Top Destinations

London

“Flights to New York”

1.8X

1.5X

Liverpool

“Flights to Orlando”

2.0X

1.3X

Cambridge

“Flights to Rome”

1.5X

1.2X

Who are you losing your browsers to? (click share)

British Airways’ Site

Skyscanner Expedia Google Flights

5.1% 1.2% 1.1%

Digital Audience Segmentation | 11

PART III: SEGMENT FOR ENGAGEMENT

How can Vogue grow their loyal readers?

Vogue’s readership Engagement metrics, such as average visits per

reader, are critical to media sponsors and advertisers.

In the US, Vogue drew the smallest audience at 800K

readers in the four weeks to March 30, compared to

over one million for Vanity Fair, Harper’s Bazaar, and

Marie Claire.

But Vogue has the best audience engagement. Over

those four weeks, their average reader looked at 28

pages on Vogue’s site, compared to less than 17 on

other publications.

How can Vogue grow their loyal and high-touch readership?

SEGMENT FOR ENGAGEMENT

Vogue vs. Competitors

Vanity Fair

Vanity Fair

Harper’s Bazaar

Harper’s Bazaar

Marie Claire

Marie Claire

Vogue

Vogue

3.1

1.7

11.88.0

1.4

16.8

0.8

28.6

Vogue has the smallest

audience, but the highest

engagement.

Aud

ienc

e Si

ze (

‘M)

Pag

e V

iew

s Pe

r R

ead

er

Digital Audience Segmentation | 12

Target Vogue’s loyal readers Vogue can first segment their readership by the number of articles viewed over a set time period, to pinpoint their

“loyal” segment.

The vast majority, at 83.4%, of Vogue’s online audience, viewed one article a month, with a further 13.9% looking at

2-5 articles a month. The remaining 2.7% of readers consumed over five articles a month.

2.7% is a small percentage, but this loyal readership is over twice the proportion of other fashion magazines.

SEGMENT FOR ENGAGEMENT

“Loyal” Segment by Fashion MagazineAudience Share Viewing 5+ Articles per Month

All publications have a small

share of “loyal” readers.

Vogue slightly edged out

with 2.7% reading 5+ articles

per month.

2.7%

1.8%

1.2%0.9%

Vanity Fair Harper’s Bazaar

Marie Claire Vogue

TOP TAKEAWAY: Segmentation by online engagement can help pinpoint your most loyal consumers. This principle can apply to multiple

industries, such as page views on retail sites. Understand which types of content they’re viewing on your site to keep them engaged.

Top Articles for Vogue’s Loyal Readers (5+ articles/month)

Build content that your loyal readers want Vogue could look at the types of content that each segment is more likely to consume on their site. Low-touch readers were

viewing lists, such as “unusual baby celebrity names” and “best rom-coms”. Whereas, high-touch readers were looking at

fashion shows like “Versace” and guides detailing “supermodel looks”.

Vogue could then tier their content topics. They could draw low-touch readers back to their site with lists. To keep their loyal

readers, Vogue could feature more supermodel guides, styles, and fashion shows.

SEGMENT FOR ENGAGEMENT

Vogue’s loyal readers

were most interested in

supermodel guides and

fashion shows.

Develop more content

that draws your high-

touch audiences.

Digital Audience Segmentation | 14

There is no single “best” way to segment your audience. But there are key rules that marketers must, and are

increasingly, following. These are:

Before building your personas and segments, assess your business’ objective. Is it acquisition,

optimization, retention, or all of the above?

Be creative with defining your target audiences. This is where behavioral segmentation, like searches,

visits, and purchases, is often superior to other methods.

Incorporate traditional methods, such as demographics and geography, to further refine your segments.

Finally, review, review, review. The online landscape is constantly shifting. Ensure your segmentation

strategy is always meeting your business’ objectives, and assess whether these objectives and priorities

need to shift and evolve as well.

Summary

Digital Audience Segmentation | 15

Hitwise is a global digital intelligence provider that helps brands and agencies, like Walmart, Goldman

Sachs, Condé Nast, and Group M, segment and reach online audiences. As pioneers in data science for

over 20 years, we deliver long-lasting improvements to our clients’ marketing and sales performance.

Powered by leading data transformation and modeling technologies, Hitwise data is audience-first,

actionable, globally-compliant, and unmatched in terms of granularity. This allows us to provide a

complete understanding into how consumers behave online - from initial search to final purchase, at any

moment in time, across any device.

DiscoverConsumer

Insights

LiftCampaign

Performance

MeasureCompetit ive

Benchmarking

OptimizeSearch & Channel

Optimization

Ready to segment to grow, win back and engage?

uncovers digital insights across the consumer’s journey, from search to purchase.

CONTACT US HERE

APPENDIX

PART I: SEGMENT FOR ACQUISITION Page 5: Hitwise, AU. Weekly searches for “electric/hybrid cars”.

Page 6-7: Hitwise, AU. Audience = Searches “electric/hybrid cars” and

variations of these terms, AND has household incomes of $100K+.

Audience reach in auto and media industries. 16 weeks to May 25, 2019.

PART II: SEGMENT FOR OPTIMIZATIONPage 8: Hitwise, UK. Weekly number of visitors but not bookers on

Ryanair and British Airways.

Page 9-10: Hitwise, UK. Audience = Visited British Airway’s site, but did

not book. Downstream and search analysis. 12 weeks to May 5, 2019.

PART III: SEGMENT FOR ENGAGEMENTPage 11: Hitwise, US. 4 weeks ending March 30, 2019.

Page 12-13: Hitwise, US. Audience = Vogue readers consuming 5+ articles

per month, in March. Analysis on top 5 articles with highest share of

views from high & low segments, out of top 150 articles over March 2019.