Almost certainly yes, but you’re probably paying too much.

One of the most common questions I get asked when discussing a campaign that’s not delivering the expected performance is “are we targeting the right people?”.

With modern ad delivery systems, the answer to this question is almost always yes. Targeting the wrong people is actually very rare. There are two things that are much more important to focus on:

  1. Targeting too many of the wrong people.
  2. Spending too much to deliver your ads.

In my day to day role I audit literally thousands of campaigns every year on behalf of prospective clients. The one problem I see more than anything is targeting too many of the wrong people. The thing with setting up targeting is that you need to think in reverse.

Instead of building an audience and thinking how many of these people would buy my product, that needs to be turned on its head so the question you’re asking is how many of these people would not buy my product.

How Much of My Audience Would Not Buy From Me

For example, you’ve set up a luxury hair care brand. You’ve built an audience targeting people with an interest in hair care, and presumably at some point they all wash their hair, so you think you’re onto a winner. But within that audience, maybe 50% will be stunned by how expensive it is, 20% stick to the brand they always bought, 10% don’t like the celebrity influencer you’re using, 5% are wrongly categorised by Meta’s algorithm and another 10% have a three month supply of another brand so aren’t in the market right now. That leaves just 5% of your audience who are even remotely interested.

The numbers here are just examples, but they illustrate a very real scenario. It’s helpful to critically analyse your audience targeting to remove as much wastage as possible and remember that there’s a big difference between being interested in a category and being in-market.

Just running ads on search? Thought you were safe? Think again. I was reviewing a Google campaign last week for a client who markets luxury rentals in a picturesque corner of England. Their keyword approach was almost entirely focused on broad match with short-tail keywords (terms with just one or two words) and as a result Google was displaying their ads and charging good money for clicks from people searching for everything from stabling for horses to villas for sale in France. A quick categorization showed that more than half their budget was being spent on completely irrelevant searches, and this is by no means unusual.

Measure Your Audiences With Financial Metrics

That brings us to the next issue, spending too much.

Going back to the luxury hair care example above, let’s say this business is spending a fairly average £6 to deliver 1000 impressions (CPM). That’s great if your entire audience is a prospective customer, but if only 5% is even potentially going to buy, then your effective CPM is calculated by dividing £6 by 5%, which equals a whopping £120. The telltale signs of this situation are when your CPM and CPC are low, but are offset by a low engagement rate on your ads or low conversion rate on site.

The opposite scenario is actually easier to spot but nonetheless flies under the radar. I see so many situations where an audience is set well and is reaching the right people with minimal wastage, engagement on the ads is looking great, conversion rate is high, but the results are still poor. Ads are performing well, the user journey is performing well, so it must be the audience? These are the telltale signs of a problem with delivery costs. It’s very rare to see strong engagement rates and conversion rates if the audience targeting isn’t right, so if this sounds like your campaign then it’s worth checking your CPM. Often the cost of getting your ads in front of people is so high that no matter what you do downstream you’re never going to turn a profit. The root cause? Often this comes from being too specific with your audiences.

Focus on Campaign Structure, Not Audience Structure

Annoying isn’t it. Go too broad and you invite wastage, go too narrow and your costs spike. There’s a happy balance to be found in the middle, and it’s why it’s so important to test a wide range of audiences. At Bambu we build campaigns with a spread of audiences from really broad to really narrow and everything in between, and then test the audiences to see what works best. Some businesses can get great results from broad audiences (some even with no targeting at all) and have no problem with wastage, while some get their best results from really narrow audiences and are able to avoid spiking costs. Testing is key to figure out what works for you.

Achieving perfect audience selection is both an elusive and constantly moving goal that’s impossible to achieve in reality, but it’s important to be aware of how both audience wastage and delivery costs have a big impact on the overall success of a campaign.

The main recommendation is to try and steer clear of constant audience adjustment and obsessing over the exact factors going into an audience. Focus instead on building a good spread of audience sizes within a well structured campaign and let the data do the talking.

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