How to Evaluate Audience Composition in Advertising

How to Evaluate Audience Composition in Advertising

When choosing a location-based audience, it’s critical to understand how consumer behavior is interpreted. Advertisers should understand how location data providers create the composition of their advertising audiences. Here are a couple of questions to consider when you determining audience composition for an advertising campaign:

  • How does the location data provider choose consumers for inclusion in the advertising audience?
  • How many visits are required to make the consumer part of the advertising audience?
  • What kinds of activities does the provider include when they build this ad audience?

Frequency of Visits in Advertising Audience Composition

Let’s say that a property management firm is advertising a VIP opening of their new outdoor food court. They want to reach frequent mall shoppers with their ad campaign. They don’t want to reach consumers who have only visited the mall once. The property firm decides to evaluate a ‘Mall Lover & Frequent Shoppers’ advertising audience. To understand the composition of this advertising audience, they will need to ask the location data provider what behaviors qualify a mobile device for inclusion. Is a mobile device added to a ‘Mall Lovers & Frequent Shoppers’ audience after a single visit to a mall? Or did they need to make 3 or more visits to the shopping mall within the last month? The property management firm has to decide between an audience of 1 or more visits vs. one with 3 or more visits. If the firm chooses the audience with 1 or more visits, then they will reach a larger audience, increase ad impressions, and cost. However, they will also reach many people who don’t regularly go to the mall, which will likely reduce their CTR and ROAS.

Audience Frequency

Importance of Event Context in Audience Composition

Event activity can also be included in a location-based advertising audience. This event context ensures that the advertising campaign will reach interested consumers. For example, a drink company is launching a new performance drink for athletes. They will likely want to reach consumers who are regularly and frequently seen at their local gym. However, some consumers who frequently visit the gym might not be athletes in training or they might only show up to the gym only a couple of times a month. In this case, the drink company may want to include consumers with event attendances in their advertising audience. For example, they could include athletes who regularly participate in marathons or spartan races. This ensures that their advertising audience has the right audience composition and increases the likelihood that they will purchase the performance drink.

There are some cases in which a single visit to an event is a good indicator of consumer interest. Take, for example, a real estate agent is advertising an open house. A single visit to the open house is a pretty good indicator that a visiting consumer is in-market for a new home. While there are always exceptions, the real estate agent doesn’t necessarily need to see a device at multiple open houses before they can infer that a consumer is house-hunting. In fact, it may be the opposite: If an agent consistently sees a device at open houses over a period of months or longer, it’s far more likely that the device owner is a real estate agent, and not in the market for a home. The agent would want to make sure to exclude these devices because they have a higher visitation rate and aren’t the right consumers for their open house ad.

Audience Composition Affects Ad Campaigns

As you choose your advertising audience, you’ll want to make sure that you understand the audience composition that makes logical sense in the context of your ad campaign and target market. In the next part of this series on choosing advertising target audiences, we’ll take a look at how you can test your target audiences.

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