Turning Ad Targeting into Gold: 5 Tips for Proven Success

Have you overlooked ad targeting when crafting marketing campaigns or is your targeting not delivering the results you want? If you’ve ever doubted the power of ad targeting for delivering higher ROI, then I’ve got something that settles the debate: data. My MBA students at the University of Maryland completed a marketing simulation that delivered an ROI 5.5 times higher when the ads were targeted effectively. Don’t believe a simulation? Here are the results from an actual A/B test comparing the results for a targeted ad versus one designed to reach a broad audience. Similar, aren’t they?

Ad targeting: The simulation

Our simulation used mainly the big 5 social networks — Facebook, Twitter (now X), Pinterest, Instagram, and LinkedIn. Obviously missing from this list were YouTube and TikTok, although posts on the other social networks used videos hosted on these platforms, so our findings likely apply to them all.

Students were given a scenario that included 8 personas with information regarding demographics and psychographics, as well as prior sales performance for each. In the scenario, they marketed products for a fake eCommerce brand and results derived using an algorithm based on real social media metrics generated by the real brand. Individual students crafted social media posts, monitored results, and interacted with simulated followers over a simulated 5-month period — 5 rounds of the simulation.

While there’s some wonkiness to the simulation, I found it a good learning tool for students and very realistic.

Results from ad targeting

The biggest factor explaining the difference between high performers — the highest ROI was over $146 — and low performers — the lowest ROI was about $30 — was how effectively the students targeted a specific persona, preferably one of the highest performing personas in terms of spending on brand products. This finding was based on a debrief with students during the simulation and after the simulation ended. And, frankly, this debrief actually muted the impact of targeting on results because low performers modified their strategy in later rounds of the simulation once they discovered the high performers did better because of more effective targeting.

Crafting generic messages and sharing them across social networks was the initial strategy followed by low performers. Even after being instructed to consider the personas and craft messages directly targeting these shoppers, low performers lagged due to their poor understanding of how to target messages to personas.

This is an example of how focused ad targeting is done on Facebook and Instagram (Meta) (this is the old ad manager interface, but it works the same with the new one). Note that this allows you to hone in based not only on demographics and geographic variables but also on the interests and behaviors demonstrated by Facebook and Instagram users.

Crafting personas

The first step in ad targeting is to craft personas. In pre-digital days, we talked about target markets, but they’re really the same thing. Except that personas are richer than target markets, which tend to focus mainly on demographics. They also commonly translate findings of a group of consumers into an individual representative of key aspects that make that group unique.

A marketing persona is a composite sketch of a key segment of your audience. For content marketing purposes, you need personas to help you deliver content that will be most relevant and useful to your audience — CMI

To learn more about personas, check out this post from Buffer. Often, a company will choose several primary personas that represent the low-hanging fruit because they possess the need, money, authority, and desire necessary to make a purchase. You might also develop a few secondary personas, as well as anti-personas that reflect folks who lack the potential to become customers.

Commonly, you build personas based on real data, such as an analysis of your current customers or those who are part of your community. For new businesses without access to historical data, you might use published data about markets or competitors gained through industry reports or an analysis of competitors’ social media to determine which users engage with their posts.

Once you have data, create a prototype of each persona that contains information about their demographic, geographic, and personality variables, plus communication preferences. Keep this in mind as you create ads to achieve higher ROI. Use images, words, and appeals that are especially effective with each persona to create highly personalized ads, as well as email messages. Here are the steps in the process.

1. Craft 3-5 personas – there are tons of templates available, but the biggest issue is that you need to do your homework. Personas aren’t based on your intuition, although that’s part of making a great persona. You’ll need to supplement intuition with hard facts gained through traditional market research. You might get information about customers/ prospects by monitoring your site analytics (through Google Analytics or similar), asking questions (ie, focus groups or interviews), expert insights (from your sales or social media teams), or ethnographies of your social platforms.
2. Flesh out additional factors about your persona specific to your product/service. You might include things like hobbies, pain points, social media usage, etc.
3. Give your persona a name. I also like to add an image to reflect the character of my persona. Even though the name and image are just placeholders for a group, it helps to think more personally about posts. It also helps the team keep personas straight and eases communication between team members. Some folks like to use regular first names, others prefer using a moniker that reflects the personality of the group, like Curious Nancy. I prefer the latter.

Why ad targeting works

In the days before the internet, you had no choice but to craft ad campaigns for relatively broad audiences because most traditional media outlets didn’t provide a nuanced view of their audience. That’s especially true for TV advertising, which, before cable, didn’t demonstrate much difference among viewers. Today, of course, you can laser-focus your ad spend to reach just the market, even niche markets, most likely to purchase products from you. Ad targeting works because it:

• Reduces wasted ad spend (as you can see in the image below). Ad targeting on digital platforms is more efficient because you only pay per click (or impression). Hence, you don’t waste money displaying your ad to those who aren’t in one of your personas.

  

• Resonates with targeted consumers. Consumers buy products that speak to them and say, “This is for me”. So, your message should resonate with a persona (or sometimes 2+ personas) by telling them exactly how your brand not only fixes their pain point but also how it fits them personally.
• Yale finds that ad targeting encourages consumers to engage more deeply with the brand, as well as encourages them to explore their products more thoroughly.
• Remember, a picture paints 1000 words, so an image that’s poorly executed or poorly targeted at a particular persona can ruin everything. Ensure that images fit your target persona — the people look like them, sound like them, and live similar lifestyles. Authentically use symbols that reflect your persona and their values.
• LookAlike audiences allow you to target advertising toward users who look like those already engaging with your brand on social media.
• Remarketing allows you to reach out to users who engaged with your brand in the past, such as visiting your website. Ad targeting toward those who left a product in their shopping cart on your website is particularly effective in increasing conversion and ROI (average increase is between 2X and 10X, with some producing results 12X higher.

How to do ad targeting

This graphic on ad targeting assumes you’ve already fleshed out your personas, so you’re ready to choose the specific target market for your advertising. Obviously, you also want to craft the content of your ad based on what you know about your personas.

1. Demographic segmentation

This variable isn’t appropriate for all companies or all products. Also, don’t make assumptions about your target demographics; use real data. You might be surprised. Then choose from the more than 200 social platforms or search advertising tools available based on demographics for that platform, as well as performance data and your goals. Above, you’ll see an image to help you make that decision.

2. Behavioral targeting

This type of targeting was impossible, or nearly so, with traditional media, but it’s a simple task in a digital world. You can use behavioral data collected by social networks to understand the behavior of certain groups on your website. Cookies are another good way to determine behavioral targets.

In choosing which persona to target for a specific ad, consider the conversion rate and average order size of that group, among other variables. Sometimes the group that’s least engaged with your brand offers the highest potential if you can build that engagement. For instance, you might choose frequent shoppers who often reflect a higher lifetime value.

3. Interests and topic targeting

Ad targeting based on interests focuses on the interests displayed by their likes or other engagement behaviors on social networks or the keywords used in search queries. Cookies are a great tool for understanding interests, just as they are for understanding behaviors.

4. Retargeting

Since you’re advertising to folks who have already engaged with your brand, for instance, by visiting a product page or putting an item in their shopping cart, the prospect of converting these folks is much higher, as mentioned earlier.

Implementing retargeting relies on inserting a small piece of code called a pixel on your website. This pixel attaches to the visitor so that the social platform knows to deliver a specific ad to that user.

LookAlike audience targeting

A lookalike ad targeting tactic is just what it sounds like. You find users who look like customers or your engaged community as the target for your ad campaign. You can even find a more nuanced audience by only targeting your best customers or those with a low cost to serve.

Conclusion

1. So, targeting is critical to optimize success in social media, just like in other marketing channels.
2. A targeted campaign delivers 5-10 times more results than one that isn’t targeted effectively.
3. Start targeting by crafting personas, mixing intuition with data
4. Ensure messaging “fits” one or more personas by choosing the right words and images that resonate with that group and using a channel where they’re likely hunkered down.
5. Follow the five tactics to find your next campaign target.

Let me know how it’s going for you by sharing your results in the comments below.

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