Digital ads are everywhere. They can be seen on websites, mobile phones, social media channels, and even smartwatches. Because they are everywhere, digital ads are also expensive. Nearly $356 billion was spent on digital advertising in 2020 alone. Given the saturation of online promotions, customers have an inherent distrust of ads. According to a recent Nielson survey, 88% of global respondents trust recommendations from people they know more than any other channel.

To overcome these challenges, brands must provide relevant, helpful, and engaging content to cut through the noise and see a positive return on investment (ROI). Market research can help marketers gather strategic insights for successful advertising campaigns by learning more about their target market and the types of messages that resonate with them. This guide will show you how to test advertising effectiveness and why segmentation research is the gold standard. 

How To Test Advertising Effectiveness

It pays to be an insights-driven business. According to Forrester, insights-driven firms are 39% more likely to report revenue growth of 15% or more. Companies need real-time insights to make better ad decisions, including who they target, how they target them, and where they target them. For instance, 66% of North American customers take no action on mobile ads, an essential piece of data for brands looking to target US shoppers.

Knowing which ads will perform best with your ideal audience is a surefire way to maximize ROI, but it takes research to get there. The best ad research methods include:

  • Quantitative research—The collection of comprehensive numerical data to identify patterns, generalizations, opinions, and predictions. Quantitative data is collected through customer surveys and polls, and the sample sizes are often much larger.
  • Qualitative research— Is used to help identify customer needs, wants, behaviors, and motivations. It is usually conducted via smaller focus groups, in-depth interviews, observation, and user testing.

Using the data from quantitative and/or qualitative studies to uncover ideal ad formats, messaging, and placements, marketers can begin testing advertisements with these metrics:

  • Reach—How many people saw your ad? 
  • Clicks—The number of clicks your ad receives. This shows how much of your target audience noticed your ad.
  • Engagement rate— The engagement rate is the percentage of people who engage with an ad. 
  • Brand awareness—The number of people who recognize your brand is a byproduct of effective advertising. 
  • Conversions—Which ads led to sales, and in what stage of the buyer’s journey did those ads make an impact?
  • Customer feedback—Customer feedback can come in many forms, from surveys to more in-depth studies like virtual focus groups or online communities.

For your advertising initiatives to be successful, you must have insight into the methods that bring in the best results for your business. Doing research and measuring ad effectiveness is key to ensuring that your advertising spend earns you money in the long run. Another way to further optimize your ad’s effectiveness is with segmentation research. 

Why Segmentation Research Is Effective 

At its core, market segmentation is the practice of dividing your target market into niches by demographics or other character attributes. Common segmentation groups include demographic/firmographic, psychographic, geographic, and behavioral.

By understanding your market segments, you can leverage their data for digital ads. Here’s why it matters.

Better Ad Content 

When you segment your audience, you no longer have to appeal to a wide range of customers. Instead, you can speak directly to a specific group of people in ways they can relate to because you understand their characteristics, wants, and needs. For example, you can customize content for high-income parents that live on the West Coast and love to go hiking versus people who love hiking. 

Brand Loyalty & Growth 

Market segmentation helps you understand and define your audience’s characteristics, so you can direct your marketing efforts to specific ages, locations, buying habits, interests, etc., making the campaign more effective.

What’s more, segmentation with customized ad content makes customers feel understood. It also makes your brand stand out by differentiating it from others with generic messaging. This builds trust and brand loyalty over time. 

Lastly, segmentation research can uncover underserved markets and new ways of serving existing markets – opportunities that can be used to grow your brand.

Boost ROI With Segmentation 

Segmentation is crucial for success. According to Bain & Company, organizations that understand their customer segments had 10% higher profit than organizations whose segmentation missed the mark over five years, according to Bain & Company. In the same study, 81% of executives say market segmentation is critical for increasing profits.

Here’s how to get started with segmentation: 

  • Decide how to segment your customers—demographic/firmographic, psychographic, geographic, or behavior. 
  • Understand your segments—Utilize research surveys, focus groups, polls, etc. Ask questions that relate to the segments you have chosen.
  • Analyze segments—Analyze the responses from your research to highlight which customer segments are most relevant to your brand. 
  • Test, test, & test again—Test your ad and its effectiveness on your segmented target market.

Bottom Line On Digital Advertising 

Today’s buyers interact with brands on multiple channels and devices. They are accustomed to ads and can often distrust them, preferring product recommendations from real users. To combat these challenges, brands need to use data to create effective advertisements, measure their effectiveness over time, and segment audiences for more personalized experiences that drive brand loyalty and conversion. 

Robust analytics gives businesses more insights into trends and competitors, but it can be easy to get lost in the noise. Fuel Cycle provides brands with a complete set of media research tools to survey and respond to the audience’s needs and takes the guesswork out of content ideation.

Fuel Cycle lets you test different ads to specific demographics in real-time, stay ahead of the trends, identify key influencers, hit your marketing metrics with ease, have a leg over competitors, and leverage high-powered analytics. You can request a demo of our platform here. 
Check out our recent blog, Market Research for Better Digital Experiences, to discover how you can leverage market research to drive continuous innovation in your organization.