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Connecting with Consumers: Audience Targeting Strategies for CPG Brands

Winning at the digital shelf is critical for consumer packaged goods (CPG) brands to stay competitive in today’s changing market. In 2022, CPG ad spend increased to $36 billion dollars, up from $30.5 billion the year before. That number is only expected to grow. By understanding and reaching the right digital audiences, CPG brands can drive engagement, increase sales, and build long-term customer relationships. In this article, we will explore various data strategies and approaches that CPG brands can employ to target their audiences more effectively.

Importance of Audience Targeting for CPG Brands

It’s a crowded industry. CPG brands must constantly look for ways to stand out from their competitors, and capture the attention of their target consumers. Audience targeting allows CPG brands to identify and better understand these ideal consumers, giving brands a way to deliver personalized messages and offerings to specific consumer segments across screens. 

By gaining insights into consumers’ preferences, behaviors, and needs, brands can create targeted marketing campaigns that resonate with their audience. This approach not only enhances the effectiveness of marketing efforts but also helps establish a deeper connection with consumers, fostering brand loyalty and advocacy.

Understanding the Consumer Landscape

To effectively target the right audiences, CPG brands must first understand the diverse consumer landscape. Demographic, psychographic, and behavioral segmentation are three key approaches that can provide valuable insights into consumer preferences and behaviors.

  1. Demographic Segmentation
    Demographic segmentation involves categorizing consumers based on demographic factors such as age, gender, income, and location. This approach helps CPG brands identify specific consumer groups that are more likely to be interested in their products. For example, a brand targeting parents with young children may focus on families with specific age ranges and income levels.
  2. Psychographic Segmentation
    Psychographic segmentation delves deeper into consumers’ personalities, values, interests, and lifestyles. By understanding the psychographic traits of their target audience, CPG brands can tailor their messaging and offerings to align with consumers’ preferences and aspirations. For instance, a brand catering to health-conscious individuals might emphasize the organic and sustainable aspects of its products.
  3. Behavioral Segmentation
    Behavioral segmentation involves analyzing consumer behaviors, such as purchase history, brand interactions, and engagement patterns. By examining how consumers interact with their products and brands, CPG companies can identify key behavioral trends and preferences. This information enables brands to deliver personalized experiences and targeted promotions to specific consumer segments.

Tips to Master Audience Targeting as a CPG Brand

In today’s digital age, CPG brands have a plethora of tools and platforms at their disposal to reach and engage their target audiences. Here are four effective strategies for audience targeting in the digital realm.

  1. Utilize Data-Driven Insights
    Leveraging data is at the heart of effective audience targeting strategies. CPG brands should utilize a combination of first-party data alongside high quality third-party data, to gain a holistic view of their target audience. A brand’s first-party data, collected from sources like customer surveys, social media analytics, website analytics, and purchase history, can give valuable insights into consumer preferences, behavior patterns, and demographics. Marketers should also use third-party insights to fuel their audience targeting strategies. For instance, Lotame’s end-to-end data collaboration platform Spherical, can help marketers bring together this first-party data, and tap into built-in analytics powered by Lotame’s third-party data marketplace. This allows for informed audience segmentation and persona development, both of which serve as the foundation for precise audience targeting.
  2. Segment Your Audience
    One-size-fits-all marketing is a thing of the past. CPG brands must segment their audience based on various factors like age, gender, location, interests, and purchase behavior. By dividing the target audience into smaller, more homogenous groups, brands can tailor their messaging and offers to resonate with each segment’s specific needs and desires. This segmentation allows for more personalized and targeted campaigns, leading to higher conversion rates and customer satisfaction.
  3. Tap Into Purchase-Based Data
    Using purchase-based audience data provides valuable insights into consumer preferences and behaviors. By analyzing data from consumers who have already made purchases, CPG brands can identify patterns and trends that help optimize their targeting strategies. This data-driven approach can lead to higher return on investment (ROI) and more effective campaigns.
  4. Partner with Retail Media Networks
    CPG brands often have strong partnerships with retailers and can leverage their data and insights to refine their audience targeting strategies. Collaborating with retail media networks can provide CPG brands with access to large reservoirs of consumer information and rich audience segments. Marketers can use valuable insights such as purchase behavior, in-store interactions, and customer feedback, to inform targeted campaigns. This can help brands optimize product assortment and placement to better align with consumer demand.

Challenges and Considerations

While audience targeting offers significant benefits for CPG brands, it also presents challenges and considerations. Privacy concerns, data accuracy, and changing consumer preferences are some of the key factors that brands need to navigate. By addressing these challenges and staying up-to-date with evolving trends, CPG brands can ensure their audience targeting strategies remain effective and compliant.

Best Practices for Effective Audience Targeting

To maximize the impact of audience targeting efforts, CPG brands should consider the following best practices:

  1. Continuously analyze and update audience data to stay informed about changing consumer behaviors and preferences.
  2. Test and optimize campaigns regularly to improve targeting accuracy and campaign performance.
  3. Utilize advanced analytics tools to gain deeper insights into consumer segments and identify new targeting opportunities.
  4. Use lookalike modeling, and machine learning technologies to extend the use of existing customer data and find highly similar profiles for customer acquisition.
  5. Incorporate personalization and customization into marketing campaigns to deliver relevant and engaging experiences.


Final Thoughts 

Effective audience targeting is essential for CPG brands to reach and engage their ideal consumers. Marketers can use these audience targeting strategies to better engage existing customers while attracting their next best. But innovative technology is key in execution. Lotame’s data collaboration platform, Spherical, makes data smarter, faster, and easier to use, giving CPG marketers a Data Empowered approach to audience targeting. 

Seeing is believing! Watch this short demo to see the Spherical platform in action.