Explaining Audience Segmentation

Audience segmentation is a hot area, but the truth is that the mere mention of it will cause most CEOs and CMOs to start checking their BlackBerrys. Here’s three key points to communicate what it is and why it matters.

• Audience segmentation takes in real-time data on existing consumer information, then separates consumers into groups so that ads bought and targeted to them have better ROI. More basic translation: It’s separating the wheat from the chaff.

• Audience segmentation allows companies to measure consumers’ reactions to ad campaigns within the context of their lifestyles and sentiments and provides structure for new targeted campaigns. More basic translation: It makes your ads more targeted.

• Audience segmentation tools are often integrated within demand-side platforms that target ads to specific audiences. This helps streamline campaigns, hone strategy and save money. More basic translation: less wasted ad buys.

Still not getting through? G. Michael Maddock and Louis Viton’s article in BusinessWeek is a great follow-up.