Features

The Segment is Dead: Long Live the Consumer

Written on
Apr 8, 2014 
Author
Dax Hamman  |

ADOTAS – If you’re a marketer — or have ever been in the same room as a marketer — you’re probably familiar with “segments.” In marketing-speak, a segment simply refers to a broad slice of the population: moms, sports enthusiasts, tweens, and so on. For a long time marketers tended to look at people this way because it was the best they could do. The limited ability to handle data meant that segments had to be broad enough to keep each population at a manageable size.

But those days are over – or, at least, they should be. In this programmatic era, data is no longer a constraint. With more data, more computing power, and a greater reach online, we’re able to look at a greater total population. That means we can slice up the segments of old much more finely. And that’s a good thing because, frankly, the segments of old are now irrelevant.

Broad segments never made a great deal of sense in the first place. After all, your competitors can buy the exact same segments. In other words, you’re left with no competitive edge.

But the big problem with segments is that they assume someone behaves like their segment all the time. They fail to take into account that the consumer is an individual with many, rapidly-changing needs. I am the co-founder of three great kids, a skier, I work in ad tech, I travel a lot, and so on. Sometimes when I’m online, I’m looking for something for my kids. Sometimes I’m booking airline tickets. But I don’t want to be distracted by travel offers when I am in dad mode. And I don’t want to see a “Dora The Explorer” creative when I’m in travel mode. (Okay, I probably don’t ever really want to see a “Dora The Explorer” creative, but definitely not while I’m buying tickets to Paris.)

The good news is that it doesn’t have to be this way. Programmatic and real-time buying can overcome the problem of the segment because they allow us to analyze the intent of the moment. In other words, programmatic is able to show me the travel creative when I’m buying tickets and the parenting creative when I’m in Dad mode. This is possible because, unlike segments, programmatic isn’t simply taking its best guess as to whether you’re currently in one mode or another. Rather, programmatic can constantly update what it knows about a user based on real-world learning.

This explains why, while running a recent programmatic video campaign, we were able to increase the brand’s 43% completed view-rate to an 80% completed-view rate. It’s not that we got people who were unlikely to watch the full video to change their minds, but rather that we had enough data to know which mode users were in before showing them the video. And that saved the brand an awful lot of money.

So, don’t mourn the segment. With programmatic marketers are catching up to the reality that one person has lots of different sides. It’s not only a better way to look at the world, but also better for business.





Dax Hamman is Chief Product Officer (CPO) at Chango. With fourteen years in the digital space, Dax has considerable experience in all things digital including campaign strategy, media planning, usability, affiliate marketing and email marketing. Prior to joining Chango, Dax founded and led the global display media group at iCrossing for four years, a role which cultivated the development of Performance Display, a data-driven method for building ROI orientated campaigns. Before iCrossing, Dax headed up the European division of Bluestreak (ad server and ESP) where he was responsible for overseeing all local operations, including managing business development and client services. Dax frequently speaks on topics including media planning, media exchanges and the synergies between search and display at various interactive marketing events including ad:tech, Digiday, OMMA, SMX, SES, OMS, DAA and WOMMA. He also writes extensively on the digital space at daxthink.com.

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