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Marketing without segmentation is a lot like shouting into a crowded room and hoping the right person hears you. Without a clear way to communicate in a noisy marketing environment, your message gets lost in the mix.
With segmentation, you can identify your target audience, speak to their needs, and deliver the right message at the right moment. Companies that use segmentation are 130% more likely to understand customer motivations, resulting in more effective campaigns and deeper audience relationships.
In this article, we’ll break down four of the most effective customer segmentation methods, when to use each, and how Experian’s audience solutions can help.
What is segmentation in marketing?
Segmentation is the process of splitting a large audience into smaller groups that share similar traits, like demographics, location, behavior, or firmographic characteristics. As a marketer, these segments enable you to choose channels, messaging, and offers that resonate with each group.
Whether you’re targeting new homeowners in Texas, loyalty shoppers in retail, or small business decision-makers in finance, segmentation helps you stand out to them and get results.
Why should marketers segment their audiences?
Effective audience segmentation fuels accuracy, performance, and personalization at scale. Here’s why you should invest your time and marketing budget in honing your audience segments.
Maximize your marketing ROI
Nobody wants to waste money talking to the wrong crowd. Using various methods of segmentation, you can focus on those who want to hear from you — and the payoff can be huge. For marketing channels like email, segmentation can drive up to 760% more revenue than non-segmented campaigns. The more targeted your message, the better the return.
Create a unified omnichannel strategy
Segmentation helps ensure that every channel, from email and social media to display, SMS, and direct mail, operates from the same playbook.
Once you define your target audience segments, you also need a trusted identity partner to sync them across platforms and environments. This ensures you can deliver consistent, personalized experiences at every touchpoint and your audience receives the same message in the proper context, regardless of where they engage.
Strengthen customer loyalty
Roughly 75% of consumers are loyal to brands that “get” them. When you strive to understand your customers, they’re more likely to stay. Segmentation enables you to personalize communications based on your target segment’s values, behaviors, or preferences, encouraging repeat business.
Expand into new markets
With segmentation, you can analyze existing customers to identify common traits and use that data to pinpoint similar groups in new regions or markets. For example, if your top customers are middle-class parents in suburban areas, you can target lookalike segments in other cities with tailored messaging.
This makes it easier to expand with confidence, knowing you’re reaching people who are more likely to convert.
Lower customer acquisition costs
Rather than forcing you to cast a wide net, segmentation enables you to focus your budget on high-potential audiences across channels, reduce acquisition costs, and minimize wasted spend on low-intent audiences.
Four segmentation methods and examples
Let’s look at four different methods of market segmentation. We’ll define each, share when to use them, and give real-world examples to help you apply them.
1. Demographic segmentation
Demographic segmentation breaks your audience into groups based on gender, income, age, education, marital status, occupation, and household size. It’s one of the most foundational segmentation methods because it’s easy to implement and often tied directly to buying behavior.
Demographic data makes it easier to get the tone, offer, and channel right from the start. And when you combine demographic segmentation with other segmentation methods, such as behavior or location, the impact multiplies.
When to use it
Use demographic segmentation when your product or service is clearly more relevant to people in a specific life stage, income bracket, or household type.
Among all methods of market segmentation, demographic data is often the easiest starting point. It’s especially effective for industries such as financial services, healthcare, education, retail, and others, where consumer needs change based on demographics.
Examples
As a real-world example, a health supplement company used Experian data to segment its ambassador program audience into four demographic groups based on lifestyle and household makeup. These included younger singles, value-seeking families, high-income spenders, and older empty nesters.
Applying these insights at registration allowed the brand to deliver personalized, channel-specific communications that boosted acquisition and retention. The approach led to stronger engagement and more meaningful customer connections.
2. Geographic segmentation
This method of market segmentation categorizes people by location, including country, region, state, city, zip code, or even climate. It’s a simple yet effective way to tailor your marketing, as location often influences everything from lifestyle and language to shopping habits and product needs. It’s most often used among brands with physical locations or region-specific campaigns.
Whether you’re promoting snow boots in Colorado or sunscreen in California, geographic segmentation helps you stay relevant to the local context.
When to use it
Geographic segmentation is ideal when your offer or message changes depending on climate, culture, availability, or local regulations. It’s also helpful for planning market expansion or testing the performance of different methods of market segmentation across regions.
Examples
One home furnishings retailer partnered with Experian to understand how customer needs varied across store locations. Using a mix of client data and Experian demographics, we segmented stores based on their surrounding customer base, like urban, white-collar shoppers in metro centers versus lower-income households in more remote cities.
These insights enabled the retailer to tailor inventory, marketing strategies, and ad copy for each store type, resulting in more relevant customer experiences.
3. Behavioral segmentation
Behavioral segmentation centers on how people live their lives — their interests, habits, and decision-making patterns. It includes factors like past purchases, engagement frequency, brand loyalty, product usage, browsing patterns, and responsiveness to offers or promotions.
Among all of the segmentation methods, this one provides insight into intent, helping you go beyond who your audience is to understand what they do. You can use behavioral insights to re-engage former customers with relevant offers, reward loyal buyers with personalized perks, or guide high-intent shoppers toward conversion with timely nudges.
When to use it
Behavioral segmentation is best when you want to personalize based on intent, habits, or engagement stage. It’s particularly useful for retention, reactivation, or cross-selling strategies.
Examples
In practice, a national big-box retailer partnered with Experian to better understand customer behavior during grocery store visits. The goal was to identify distinct “trip missions” that could drive category trial and increase basket size. We analyzed everything from basket contents to customer composition and segmented visits into 11 unique missions.
For example, the “All Aisles Online” segment represented large households (often homeowners with families) stocking up on household staples through online orders. In contrast, the “Marketable Mission” segment captured smaller, likely renter households making quick trips for non-essentials.
These behavioral insights empowered the retailer to adjust promotions based on the intent behind each visit, strengthen customer relationships, and drive growth.
4. Firmographic segmentation (B2B)
Firmographic segmentation is like demographic segmentation for businesses. It groups B2B audiences based on attributes such as annual revenue, location, company size, industry, and organizational structure. You can also segment by job title or decision-maker role to better target key stakeholders.
This method is great for aligning your messaging, sales strategy, or product offerings with the unique needs of various business types. A startup in the tech sector will likely respond to a very different pitch than an enterprise manufacturer, and firmographic data helps you speak to both with precision.
When to use it
Use firmographic segmentation when marketing to other businesses, especially when your product or service has different benefits depending on business size or sector.
Examples
Recently, a B2B client partnered with Experian to gain a deeper understanding of the revenue potential of their existing business customers. Using firmographic data, we segmented the client’s customers into distinct groups based on the characteristics most strongly tied to spending behavior.
For each segment, we calculated potential spend, defined as the 80th percentile of annual spend within that segment. This allowed the client to identify high-value accounts with untapped growth potential.
For example, one customer, ABC Construction, had spent $4,750. But based on their segment’s profile, their annual potential was $9,000. That insight revealed a $4,250 opportunity to deepen the relationship through more targeted marketing and sales efforts.
Best practices for market segmentation
Regardless of the segmentation method you use, the following best practices will help you maximize the benefits of your efforts.
Start with clean, reliable data
Segments are only as good as the data behind them. If your data is outdated, inaccurate, or incomplete, your segments will result in ineffective targeting and a wasted budget. Utilize accurate, compliant, up-to-date sources like Experian Marketing Data, ranked #1 in accuracy by Truthset, to ensure your targeting is on point.
Test and refine segments continuously
Business goals, market conditions, and behaviors are constantly changing. What worked last month or even last week might not work today. By adjusting your segments over time, you make sure your marketing stays relevant, focused, and effective. Use A/B testing, performance metrics, and audience analytics to iterate on your segments and improve results over time.
Align segments with personalized messaging and offers
Each segment has distinct needs, preferences, and motivations, which means generic messaging won’t resonate effectively. Once you’ve built your segments, personalize your creative, copy, and offers to appeal to each group and increase the likelihood of engagement and conversions.
Integrate segmentation across all platforms
If someone sees one message in an email and a completely different one in an ad or on your website, it creates confusion and weakens trust. From CRMs and email platforms to ad tech and analytics tools, make sure your segmentation method is applied consistently across every channel to improve performance and build a cohesive brand experience.
Segment your audiences with Experian
Effective audience segmentation is at the heart of every successful marketing strategy, but in this fragmented, privacy-conscious landscape, grouping your audience into meaningful, actionable subgroups is more challenging than ever. That’s where we come in.
With coverage of the entire U.S. population, Experian helps marketers define and categorize broad audiences into precise segments using rich data on demographics, behaviors, financial profiles, and lifestyle traits. These insights make it easier to personalize messaging, optimize media spend, and drive better outcomes.
From ready-to-use syndicated audiences to custom segments and even Contextually-Indexed Audiences that align targeting with content, Experian offers flexible segmentation solutions that perform across digital, TV, programmatic, and social channels.
In our most recent release, we introduced over 750 new and updated audience segments across key categories, including a brand-new category for Experian, giving marketers more accurate, behavior-based targeting options than ever before.
- 135+ new CPG audiences, a brand-new category for Experian, built from opt-in loyalty card and receipt scan data
- 240+ new automotive audiences covering ownership and in-market shoppers
- 100+ new high-spending behavior audiences focused on specific merchant categories
- 24 new wealth and income segments with refined household net worth tiers
- 13 new lifestyle-based housing audiences for family- and household-focused targeting
- 250+ refreshed financial segments with improved naming conventions for better discoverability and clarity
Together, these segments give marketers more accuracy to reach high-intent consumers based on real-world behaviors, spending patterns, and financial capacity.
Audience solutions powered by consumer insights
Experian Marketing Data, one of the most comprehensive and accurate consumer databases in the U.S., is the core of our segmentation capabilities. Backed by over 5,000 demographic and behavioral attributes, it helps you understand not just who your customers are but how they live, shop, spend, and engage, too.
Each audience segment is built with privacy and precision in mind, using a blend of demographic data, financial behaviors, lifestyle signals, and media habits. With these consumer insights, we’ll help you uncover meaningful patterns that lead to smarter strategy.
Experian’s pre-built audiences
Our syndicated audiences are pre-built, ready-to-activate segments based on shared characteristics from age and income to purchase behavior and lifestyle indicators. When speed and scale are a priority, these segments offer a fast, effective way to reach your target audience.
Experian’s 2,400+ syndicated audiences are available directly on over 30 leading television, social, and programmatic advertising platforms, as well as within Audigent for activation within private marketplaces (PMPs).
Here’s what’s new from our August 2025 release:
- CPG shoppers by category (e.g., Frozen Food Shoppers, Multi-Vitamin Shoppers)
- Luxury EV owners and auto brand shoppers (e.g., Rivian, Polestar, Cadillac)
- High spenders in specific categories (e.g., men’s grooming and women’s accessories)
- Ultra high-net-worth households (e.g., Net Worth $50M+) and likely home sellers
- Young Family Homeowners and Growing Family Apartment Renters
Custom audiences for specialized targeting
Need a custom audience? Reach out to our audience team, and we can help you build and activate an Experian audience on your preferred platform. Additionally, work with Experian’s network of data providers to build audiences and send to an Audigent PMP for activation.
Contextually-Indexed Audiences
Experian’s Contextually-Indexed Audiences offer a privacy-safe way to reach relevant consumers in the moments that matter without relying on identity signals or third-party cookies. These segments combine Experian’s consumer insights with page-level content signals, enabling you to align targeting with intent and mindset, even in cookieless or ID-constrained environments.
Want to take your segmentation strategy to the next level? Let’s talk. We’ll help you define your audience in ways that drive real results.
Talk to our team about your segmentation methods today
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Originally appeared in AdExchanger Google’s decision not to deprecate cookies in the Chrome browser after all caused a stir across the industry. Companies invested heavily in developing solutions aligned with the Privacy Sandbox as a survival tactic for the post-cookie landscape. At first glance, Google’s about-face may appear to undercut those efforts. It’s easy, and perhaps even satisfying for some – but inaccurate – to say “all that effort was for nothing.” Given Chrome’s dominance among browsers, AdTech companies had no choice but to prepare for “what if” scenarios. The same goes for cookie deprecation. Google’s plan to end support for third-party cookies would have removed a mechanism that has been a cornerstone of addressability for the past 15 years. To be clear, those efforts have not been wasted. They spurred innovation across the AdTech landscape, driving progress in privacy-first targeting, alternative identifiers, supply-path data activation, and real-time data enrichment – all of which will pay dividends for years to come. Whether born directly from Privacy Sandbox participation or inspired by the broader trend toward privacy reform, industry-wide preparation for cookie loss and browser disruption has yielded tangible benefits. Pressure from Google, Apple, and evolving regulations served as a catalyst for modernization that could shape the next decade of advertising technology. An industry anchored in product innovation AdTech is a fundamentally product-driven industry defined by short innovation cycles and the imperative to build and test rapidly. This DNA enables companies to stay resilient, evolve and deliver innovation. Change is good. Disruption can be even better – but only for those who embrace it. Google’s evolving stance on cookies and Privacy Sandbox doesn’t negate what’s been learned. If anything, it underscores the need to keep innovating. The next wave of disruption is likely right around the corner. The payoff While some may argue that the time and effort spent preparing for cookie loss was wasted, those efforts have functioned as a forcing mechanism for several innovations in data activation. Supply-side data activation and optimization, aka “curation,” is an alternative to the traditional approach to data activation. Unlike the traditional data management platform (DMP) to demand-side platform (DSP) activation flow, curation allows buyers to utilize supply-path data more directly. The upshot? Improved performance and pricing for media agencies and brand advertisers. As curation continues to evolve, it’s poised to play a central role in how advertisers and publishers transact. Real-time data enrichment is another area that has benefited from this period of accelerated innovation. Many companies were compelled to improve their tech stacks to align with Sandbox protocols. These updates, particularly in real-time data enrichment capabilities, are now laying the groundwork for future data activation strategies across both the buy and sell-sides. Exiting out of tunnel vision Over the past five years, the AdTech industry has invested deeply in planning for a future without cookies. Still those investments have been well worth it. While cookies are not going away, the broader deprecation of signal continues. The work that was done to prepare will inevitably inform the next evolution of our industry. Contact us Latest posts
Marketers are under more pressure than ever to deliver personalized, high-performing campaigns—while navigating tighter budgets, shifting privacy expectations, and fragmented tech stacks. Despite an explosion of tools and data sources, the fundamentals of marketing haven’t changed. Every great campaign still starts with a simple question: Who are we trying to reach? The answer depends on how well you understand your customers. Increasingly, that understanding is hampered by data silos, inconsistent identity signals, and disconnected workflows between planning, activation, and measurement. When those pieces don’t align, it leads to inefficient spending, incomplete insights, and missed opportunities. To move forward, marketers need more than better tools—they need a more connected approach. Start with a complete view of the customer The foundation of effective marketing is understanding your audience—not just who they are, but what they care about and how to reach them across devices and platforms. That starts with building a complete customer profile. For many marketers, this means linking persistent offline data—such as name and address—with fresh digital signals like device IDs and online behaviors. When combined, these elements provide a high-fidelity view of the customer that can be enriched with attributes like demographics, purchase behavior, and lifestyle interests. This kind of profile doesn’t just help you understand people—it helps you build audience segments that actually perform. Whether you’re working with your own CRM data or third-party sources, the ability to create addressable segments that are both accurate and scalable is what separates good campaigns from great ones. 🛳️ That’s exactly what MMGY did for Windstar Cruises. By layering first-party data with behavioral and demographic insights, they built custom audiences that more than doubled campaign benchmarks. 🎮 Gaming platform Unity tapped into Experian audiences to understand player behaviors across web, mobile, and connected TV (CTV). These insights helped their advertisers reach gaming audiences more effectively—tailoring creative and delivery to real-world preferences, not assumptions. Activate with precision, not just volume Knowing your audience is only half the battle. The next challenge is reaching them—consistently and efficiently—across multiple channels. This is where fragmentation can creep back in. All too often, marketers build audiences in one system, but activate in another, causing data loss and targeting mismatches. 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Curation — the intelligent packaging of data and inventory actionable in a private marketplace deal — can no longer be considered a trend or buzzword. With over 66% of all open exchange – representing $100 billion in annual spend – being transacted through private marketplace deals (PMPs), curation is a key part of how data and identity are addressed and actioned in programmatic media. Programmatic advertising is certainly known for big shifts, but as shared by Index Exchange CEO Andrew Casale, “Curation will be bigger than header bidding and as big as programmatic or real-time bidding (RTB) – that’s our bet.” And we agree. But why has curation become a critical component of brands and media agencies' digital advertising strategies? Put simply, the math. Case study after case study empirically shows curation performs well for both the buy and sell-sides. For media agencies and brands, curation consistently shows four main benefits: Significant cost efficiencies Buying curated PMPs shows significant cost efficiencies when compared to buying data from the buy-side alone. Strong performance Data-enriched, curated PMPs can be optimized through the supply path, unlike a data management platform (DMP) segment, which leads to strong performance. Futureproofs media buying When data is curated through the supply path, it does not need to rely on legacy identifiers (like cookies), and the door is open to robust, next-gen addressability which better futureproofs media buying opportunities. Value-added insights Curation comes with robust log-level data that can be used for value-added data science including analytics, insights, reporting, and attribution – all critical in a world where addressability and identity resolution are becoming even more challenging. Curation introduced efficiency into homeopathic brand Boiron’s media buys, reducing the brand’s data costs by 30%, which enabled the brand to reinvest the same budget in brand awareness goals. Curation not only met but also exceeded the CPA for display by 82% and for video by 41%. “Audigent has been a top 5 performer in terms of CPA during our testing, helping our teams deliver 44% more efficient spend for brands across CTV campaigns."Sam Bloom, Head of Partnerships at agency PMG A big boost for addressability Legacy identity signals are changing. Whether it’s by browser, device, or platform, both buy-side and sell-side platforms need strong identity signals to reach their intended audiences, and this has become harder than ever before. Curation, with its real-time data connection and enrichment capabilities, solves signal loss challenges by directly connecting to the supply path and using a broader spectrum of identity solutions to boost addressability. Curation allows platforms to target first-party, third-party, contextual, indexed and modeled audiences. This alleviates the dependence on any one identifier and boosts the relevant bidding opportunities for brands and media agencies to target audiences. Not all curation is created equally As with any hot innovation, AdTech is notorious for companies jumping on the bandwagon of the largest trends. Curation is no different, with seemingly everyone now claiming to be a “curator.” As the industry works to define what is and isn’t “curation," we are uniquely positioned to define this as Audigent has pioneered curation for seven years and is the industry leader. The definition of curation is the intelligent packaging and optimization of data curated against the inventory supply path. There are three definitional elements to any curation product: Unique audience data Curation must include first-party, third-party, contextual, indexed and/or modeled data. Robust SSP integration To apply data in real-time to the inventory supply path, a curator must have deep partnerships and integrations that enable the combination of data and inventory into a single package. Optimization The whole point of curating data against the supply path is that it opens the door for robust real-time optimization to drive performance. If the solution ticks all three boxes, then brands and agencies should test curation and gauge its results firsthand. Curation done right drives results for brands, agencies, and publishers When done well, curation improves media buying efficiency and performance for brands and agencies. Importantly, it also drives results for publishers and content creators. 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These results aren’t outliers—they’re proof that curation is no longer a nice-to-have; it’s a must-have for marketers who want performance, precision, and scale working in lockstep.”Amanda DeVito, Butler/Till Industry-leading curation with Experian Tapping into an end-to-end solution that enables marketers to understand and reach their desired customers across channels through curation is a win-win for all parties. In the past three years, Experian and curation company Audigent have delivered a range of industry-leading innovations together, including the integration of Experian data into Audigent’s PMPs. As one company now, Experian's unique identity and data capabilities amplify how curation activates on the buy-side at scale, setting a new standard for audience targeting with added benefits like audience customization and flexible activation through Audigent’s PMPs or demand-side platforms. Connect with us Latest posts