How Audience Scale Affects Reach in Advertising

How Audience Scale Affects Reach in Advertising

In the last part of this series, “How to Choose Customer Data in Advertising,” we explored how marketers can evaluate data provided by location intelligence providers. As marketers build out their advertising campaigns, they’ll need to understand audience reach. Many marketers want their ad campaigns to reach as many consumers as possible. How can you increase audience reach? Many assume that you can maximize resulting sales by targeting ads to a large audience and ensuring that your ad is seen by as many qualified consumers as possible. This isn’t always the case.

How Audience Size Affects Advertising Reach

The biggest audience is not always the best audience. As you are evaluating advertising audiences, you need to determine if the audience is the right size for the true market opportunity to get the most out of your advertising reach. Let’s assume that a car company is creating an advertising campaign in support of a new model car, and that they want to reach in-market auto buyers. With 17M new car buys in the U.S. in 2019, an audience of 45M or 60M in-market auto buyers should look suspicious. Because location-based audiences reflect actual consumer behavior – rather than inferred behavior – an unreasonably large audience most often indicates poor data quality. The audience may be out-of-date, or assembled using data from a less-precise grid system. Either way, selecting an outsized advertising audience will increase the car company’s advertising reach, but result in them paying for a lot of impressions that won’t ultimately convert. In this case, the car company would be wasting much of their ad spend as they would be reaching many consumers who aren’t really in-market for a new car. For this reason, it is important to avoid choosing an audience simply because it’s the largest. 

Smaller vs. Larger Scale Audience

Let’s take a look at a retail-related example. A retail company promoting a new-and-improved video baby monitor to expecting parents will likely know that 4MM babies are born in the US each year. They know that these new parents are tech savvy and are in the millennial age bracket. How can this retail company make sure that their advertising campaign reaches these consumers? They should choose an ‘Expectant Parents’ audience in the 3MM-7MM range, and pass on the one that’s 26MM. But, what if there is an additional audience that they want their ads to reach? The company might also know that their monitors are often bought as gifts by grandparents. In this case, the creation of a custom audience would be suitable.

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Choosing a Large Audience for Reach in Advertising

However, there are cases in which it makes sense to choose a bigger audience for an advertising campaign. Take for example – a coffee company marketing a new coffee drink. Since their product is coffee and they know that 64% of U.S. consumers drink coffee every day, and 36% purchase coffee drinks, then it makes sense for their advertising reach to be broader. They want to be able to reach as many potential customers as possible in order to increase product awareness. As they evaluate location data providers, they’ll know that a 60MM audience of coffee lovers is completely reasonable in size for their advertising campaign. Ultimately, if you are advertising mass-market or daily needs products, then it makes sense to have a larger audience in order to spread awareness of that product.

Get the Most Out of Your Advertising Reach

As a marketer, the success of your advertising campaign depends on the quality of the underlying data within the location data provider’s advertising audiences. The size of your advertising audience ultimately affects your advertising campaign’s reach. If your total market opportunity suggests that you don’t need a large audience, then choose a smaller one and vice versa. Choosing an advertising audience that is the right size for your true market opportunity will prevent ad waste and increase the likelihood that your ad campaign will result in conversions.

In the fifth part of the series, we’ll discuss recency and refresh rates within advertising campaigns.

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