What is targeting in marketing?

Gone are the days of creating broad marketing campaigns aimed at mass audiences. Modern marketing requires a more strategic approach - defining a specific target audience and crafting messaging that precisely appeals to them.

So what is targeting in marketing? It’s the practice of narrowing down a target market into specific segments of consumers with common attributes and directing more personalized marketing efforts toward them.

Rather than casting a wide net to reach everybody, effective targeting means focusing resources on the audience most likely to engage with your brand. The goal is to ensure marketing dollars are well spent by only reaching and resonating with qualified prospects. This approach leads to greater efficiency and return on investment.

Why targeting is important in marketing

There are countless reasons why targeting is so important to your marketing approach - regardless of what that approach may be. Below, we have listed the key reasons that you should consider.

More efficient use of marketing budget and resources

With a highly targeted marketing approach, companies can ensure that every dollar spent on campaigns and tactics is directed toward consumers likely to be interested in their offerings. Broad outreach often leads to wasted spend on audiences that will never convert.

However, with targeting, budgets can be optimized around the channels and strategies that better reach and resonate with your defined audience segments. Your resources will go further when you focus on qualified leads instead of spraying efforts indiscriminately.

Improves return on investment from marketing spend

By only allocating marketing dollars to reach qualified leads that match a well-defined target profile, targeting improves return on investment from marketing expenditures. Conversion rates are higher when you’re speaking directly to the needs and interests of engaged prospects.

The more targeted the outreach, the higher the ROI, as the budget is focused on the highest-intent customers who are already moving down the funnel. With random untargeted spending, you lack the precision to identify and motivate strong customer profiles efficiently.

Helps refine messaging to resonate better with audience

Targeting allows marketers to craft messaging tailored specifically to connect with the needs, interests, values, and motivations of their target demographics. Campaigns can be framed around what matters most to the target customer segment.

Buyer personas and market research uncover the terminology, themes, and ideas that will resonate most with clearly defined groups. This enables personalization and customization that speaks directly to what drives a prospect’s decision-making.

Allows personalization and customization of campaigns

In addition, targeting facilitates highly personalized and customized marketing campaigns focused on what will uniquely appeal to specific audience groups. Personalized communication performs better than generic outreach.

According to McKinsey & Company, 71% of consumers expect personalization, and 76% get frustrated when they don’t find it. So, by customizing your campaigns, you can boost relevance and engagement. You can do so by aligning offers and messages to customer preferences.

Builds stronger relationships with customers

Targeting helps build stronger relationships through ongoing communication tailored to their preferences. Customers feel understood when brand messaging continuously reflects their needs and priorities. This nurtures meaningful, long-term relationships driven by relevant dialogue. Targeting shows the customer that they’re more than a generic sales lead.

Drives better engagement and conversion rates

Finally, because targeted marketing resonates more deeply with the intended demographics, it drives better engagement and conversion metrics including open rates, click-through rates, lead generation, and sales conversions. Response rates naturally improve when messaging is personalized and strikes the right chord with recipients.

Types of targeting

So, like anything else in marketing, there are lots of different types of targeting, and the one you use depends on who you’re targeting and why.

Demographic targeting

Demographic targeting is personalizing your marketing to fit different groups of people based on things like age, gender, income, and education level. It's the way to go if you want to make sure your messages and offers connect with folks at different stages of life. It's all about making sure you're talking to your audience in a way that makes sense to them.

Geographic targeting

Think of geographic targeting as your way of saying, "Hey, we know where you are!" This involves tailoring your marketing efforts to specific locations—whether it's a city, region, or country. Super important if your business has a physical presence, like a restaurant or store. It helps you speak the language of the locals and make your messages feel right at home.

Behavioral targeting

Behavioral targeting is all about understanding how people behave online—what they're into, what they browse, what they buy. Once you get the hang of it, you can create messages that feel like they were custom-made for your audience. Plus, it lets you reach out to those who've shown interest before, giving them a friendly nudge to come back and check you out again.

Contextual targeting

Picture contextual targeting as placing your ads where they make the most sense. It's like putting your message right in front of someone when they're deep into a topic or checking out related content. By doing this, you increase the chances of your ads feeling like a natural part of what they're already interested in.

Psychographic targeting

Psychographic targeting dives into the psychology of your audience. It's not just about age or gender; it's about understanding their lifestyle, values, and what makes them tick. This approach helps you go beyond the surface and create marketing messages that really resonate with what drives your customers.

Lookalike targeting

Lookalike targeting is about reaching out to new prospects who share a bunch of similarities with your existing customers. It's a cool way to grow your customer base by connecting with people who are likely to love what you have to offer based on what your current customers already enjoy.

Firmographic targeting

Firmographic targeting is essentially the B2B version of demographic targeting. It involves tailoring your marketing approach based on specific attributes of a company or business. For example, the industry, company size, revenue, and location. Just like how demographic targeting helps you connect with individuals, firmographic targeting ensures that your business speaks directly to the businesses you want to reach.

How to define your target audience

There are five main steps to defining your target audience. There’s a lot that goes into each one but they are rather simple to understand and carry out.

Conduct market research to identify potential targets
Analyze customer data to find common attributes and patterns
Develop detailed buyer personas based on demographics, behaviors, etc.
Identify where target customers are and how to reach them
Continuously refine audience as campaigns unfold

We have a few resources that will help you learn more about how to define things like your ideal customer profile (ICP) or buyer persona, segmentation, and so on.

Tips for effective targeting

Avoid casting too wide of a net with generic targeting

It can be tempting to try to reach a very broad audience with generic targeting parameters, but this often leads to low engagement and wasted ad spend.

So, be sure to be as specific as possible in defining your target audience based on demographics, interests, behaviors, etc. to increase relevance. Really dig into your customer personas and key identifiers that set your ideal audience apart.

Also, look for targeting opportunities beyond just basic demographics like age and gender and leverage intent and contextual signals when possible.

Regularly re-evaluate targets as market shifts

Targeting should be regularly reviewed and optimized over time as the market landscape evolves. Consumer interests and behaviors change, new audience segments emerge, and campaigns can become stale if targeting is not kept up-to-date.

With this, make sure to set reminders to review targeting on a quarterly or even monthly basis. Look at changes in engagement/conversion rates and optimize according to what you find. Plus, it’s important to stay on top of market trends and evolve strategies to align with those shifting consumer preferences.

Test different targeting approaches to see what resonates

There is no one "right" way to target an audience so testing different targeting strategies is important to see what resonates best. Try narrow vs. broad targeting, interest- vs. demographic-based, placement targeting, and monitor performance to double down on what works best for you and your company.

Do things like A/B testing for different audience segments, placement targeting, creative variations, etc. to identify opportunities. Try an iterative approach making small tweaks over time vs dramatic targeting overhauls. Then, you can analyze performance by ad set to understand what works.

Focus both on who to target and who NOT to target

Precision targeting is not only about who you want to reach, but also being selective about who you don't want to reach. Sometimes excluding certain demographics, interests, sites, apps, etc. can further refine an effective target audience by removing the type of audience you don’t want to attract to your business.

Look beyond just inclusions to think about exclusions. What audiences may not be worth spending a budget on or could even have negative sentiments toward your brand? With this, make sure that you exclude sites with poor engagement metrics or unrelated content as this is not a place of inspiration for you.

Use targeting in coordination with compelling creative

Targeting and being creative work hand-in-hand. The most finely tuned targeting will still underperform without compelling ad creative that truly engages the target audience. So, you must align creative messaging, visuals, and tone to who you are targeting.

Also, make sure the ad creative is tailored to the specific audience's interests and motivations. You can test creative variations along with targeting variations to better determine optimal combinations.

Ensure targeting aligns with overall business goals

At the end of the day, targeting should map back to core business goals - whether awareness, conversions, engagement, or other objectives. You need to keep the bigger picture in mind and target audiences that can best help move the needle on those goals.

Consider both short-term conversion goals and longer-term brand lift by hitting a balance of bottom-of-funnel conversion-focused targeting with more upper-funnel brand awareness as needed to achieve your goals.