He Has a Great Personality: Using Digital Footprints to Segment Markets

Isn’t that the line when someone tries to fix you up with a blind date — he or she has a great personality? It’s usually a code word for ugly. Unlike in dating, in the case of target marketing, personality may be your golden ticket. Using digital footprints left by consumers as they use digital properties such as search and social media allows advanced segmentation that leads to business success.

A brief history of segmentation

Segmentation began in the 1950s and was dominated by demographic variables like age, income, and gender, not because these were the defining characteristics of consumers but because that’s what information was available. Prior to the 1950s, in what marketers call the production era, most energies were focused on producing products, while satisfying consumer wants and needs was inconsequential. But, with increased competition and more product differentiation, marketers like Smith argued for consumer segmentation as a tool for improved market performance. He argued:

Segments should be based on consumer/user wants and a company should be better able to serve these needs when it has defined some segments within a larger market.

By 1974, a formal definition of segmentation appeared from a seminal paper published by Wind and Cardoza, which identifies market segments as:

A group of present and potential customers with some common characteristic (s) which is relevant in explaining (and predicting) their response to a supplier’s marketing stimuli.

As better sources of information arose, especially with modern digital marketing, more information was available about consumer personality, including lifestyles, media usage, attitudes, and other non-demographic characteristics. Segmentation moved from identifying target markets based on demographic variables to developing a rich market persona built on deep personality data. See the examples below.

Personality and marketing

First, let’s get an understanding of what we mean by personality. According to the American Psychological Association, personality is:

Personality is the combination of behaviors, emotions, and motivations that comprise an individual human being. Over time, these patterns strongly influence personal expectations, self-perceptions, values, and attitudes.

However, the use of personality in marketing, especially for segmentation, is relatively recent because, until the explosion of social media usage and digital analytics, we didn’t have ready access to the personality of individual consumers. Now, you can use digital advertising on platforms such as Meta (Facebook and Instagram) to target consumers based on a host of personality and lifestyle traits. More on that later.

For much of its short history (the discipline of marketing is only a little over 90 years old, which is very young when you consider that economics dates from the Bronze Age starting around 4000 BCE), marketing was heavily influenced by economics, such that economic variables like pricing dominated discussions of positioning products for various market segments. Thus, researchers studied how consumers responded to prices, with the dominant theory that consumers bought what was cheapest. It’s only within the last 10 years or so that marketers began trying to understand personality and how personality factors impact consumer behavior. Below, we can see a list of the most salient personality traits when it comes to influencing consumers’ behavior.

Likely, the first use of personality in marketing was not for understanding consumers but for imbuing personality into products. Brand personality encouraged consumers to buy certain products whose personalities they liked — a practice that remains very effective today. For instance, Apple owes much of its dominance to the personality trait of innovativeness built over many years of leading the technology industry in new features and products. Or brands like Google and Volvo that are seen as competent by consumers.

Increasingly, marketers use consumer personalities to segment consumer markets and create options for positioning brands to attract consumers based on personality. Digital marketing offers the rich data necessary for understanding consumer personality, segmenting consumer markets based on personality, and helping brands reach consumers who share certain personalities. This allows brands to not only position products to appeal to specific segments but to reduce advertising waste by only reaching consumers who are likely buyers.

Segmentation thus reduces cost while at the same time increasing the ROI (return on investment) of your marketing efforts. Email marketing, for instance, produces a much higher ROI (up to 760% higher) when you send targeted messages to individual segments within your subscriber list. Even something as simple as adding the subscriber’s name to your message can increase ROI by up to 26%. That’s a lot of money you’re leaving on the table if you don’t use effective segmentation in your email marketing campaigns.

Big data: Using consumers’ digital footprints for segmentation

Understanding consumer personality was historically challenging because, short of doing expensive market research about what consumers think and feel, how they live their lives, and what things they value is inaccessible. With the advent of social networks and mobile devices that create a digital footprint for individual consumers, such information is readily available.

In a special issue of the Proceedings of the IEEE published in December of 2014, researchers from Namur University in Belgium and Stanford in the US discussed the use of consumers’ digital footprints to infer personality, which is helpful for marketing segmentation and selective reach of messages to a particular segment based on personality as well as personality-driven search engines and recommender systems (like Netflix’s and Amazon’s related product recommendations). This was the first mention of digital footprints and their value in marketing.

When we talk about personality, we’re talking about reasonably stable traits. People differ across five broad personality styles: openness, conscientiousness, extraversion, agreeableness, and neuroticism, as discussed above.

Facebook’s myPersonality project

In 2007, researchers created the myPersonality project, offering Facebook users access to psychological tests resulting in personality data from over 6 million users (users controlled whether their personality results became public in the anonymous database, and access to that database is highly restricted to researchers).

Facebook data shows not only messages (which are mined for text data regarding values, attitudes, and lifestyle) but relationships with other users and likes (brand page and post likes). Mining this data shows personality differences across geographic regions, such as the one below, showing neuroticism (upper map) and extroversion (lower map) across the US.

This pattern of Facebook likes helps predict demographic variables, as well as psychological ones that marketers can use such as:

• religious views
• political leanings
• sexual orientation
• intelligence

Mobile data

Mobile devices send information about geolocation, co-location with others, physical states (such as running, walking, and not moving), and call data records, as well as emotional feelings using apps such as EmotionSense.

Using digital footprints

We’ve just scratched the surface of using digital footprints, but the marketing implications are enormous.

New product development

Knowing more about customers and their personalities opens up vast possibilities for new product development (NPD). Sure, text analysis provides enormous benefits when developing new products, but adding the personality component helps greatly.

For instance, let’s say your existing customers are extroverts. You could research the digital footprints of other extroverts to understand their wants and needs then use this information to develop new products for that segment. Since you’re already successful with extroverts, going after this market rather than another target market usually results in higher market performance.

Messaging

We know personality is a huge determinant of how consumers respond to market messages. For instance, someone who’s neurotic will respond better to messages about safety, while an extrovert will respond better to messages about connectivity.

Extraverts also have different social network characteristics from introverts. Notice in the graphic that extroverts (on the right) have both more extensive and more diverse social networks, while introverts (on the left) have dense relationships within concentrated groups. Thus, messaging travels differently between introverts and extroverts. Likely, introverts are more influential because of their deep relationships (strong ties) within small groups. At the same time, extroverts generate a broader awareness of the message because of their diverse relationships across many groups (weak ties) — based on Granovetter’s notion of strong versus weak ties.

Obviously, extroverts have some strong ties, as well, but their primary benefit is in their ability to spread your message.

Facebook (actually Meta, which includes Instagram) already allows message targeting based on some personality characteristics coming from purchased databases — such as Personicx. This data enables targeting based on personality within a broad range of factors such as family composition, dwelling location (i.e., urban versus rural), media watching habits, hobbies, what they like to eat and drink, preferred sports and teams, technology use, and many others. You can also target based on what they buy, which infers not only personality but how their personality reacts to their behavior. I commonly advise clients to use Facebook sponsored posts because of these personality targeting options and the relatively low cost of reaching a particular target audience. As pressures to produce revenue have increased over time, the use of organic social media has declined to the point where my recommendation to spend money on sponsored posts is even more valid.

A better understanding of consumer behavior

New insights come from using digital footprints data — a type of data whose volume and richness never existed before. For instance, the knowledge that introversion and neuroticism vary in some systematic way across geographic regions (as shown in an earlier graphic) is not only a fascinating insight from digital footprints but has strategic implications. For instance, marketers might use geographic shortcuts to target individuals with certain personality traits selectively.

Likely, new insights will come from further investigations of personality data from digital footprints.

The caveat to using digital footprints

Of course, using digital footprints has its drawbacks. The most serious drawbacks of using digital footprints are privacy issues and the issue of who controls your digital data. For this reason, many consumers opt out of sharing private data and avoid platforms that don’t conform to their desires for privacy, such as Gmail and Facebook.

Moreover, governments are rapidly moving to control privacy and the ownership of digital data, as shown by the recent banning of TikTok in the US (a move currently on a temporary hold). Other countries have imposed strict guidelines to protect consumer privacy and Google has placed a ban on third-party data (another rule currently on hold).

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