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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 Adweek This holiday advertising season, identity is the real differentiator Marketers are betting big on AI to run their holiday advertising, using it to build predictive audiences, generate creative at scale, and optimize media buys in real time. The draw is clear: greater efficiency, delivered at scale. But here’s the problem: without a solid identity foundation, AI is just guessing. And in a year when consumers are cautious and competition is fierce, guesses won’t deliver the outcomes you need. Experian’s 2025 Holiday spending trends and insights report shows that success this season will depend on connecting the right data to the right audiences in real time. Download the report now Are shoppers really using AI to make holiday purchases? Not yet. Only 12% of consumers plan to use AI tools to shop this season, mostly for finding discounts. Instead, trusted influences (like retailer websites, product reviews, and recommendations) still guide buying decisions. For marketers, that’s a signal to focus on credibility and connection. AI can support your holiday advertising strategy, but trust still wins the sale. Consumer sentiment heading into the holidays is low, but that could mislead marketers Here's why How marketers are really using AI in holiday advertising Behind the scenes, AI is working overtime. Teams use it to segment audiences, test creative, and optimize media in real time. These capabilities are powerful, but only if they’re grounded in accurate, persistent data. Think about the typical holiday shopper. They may browse a product online, validate it in store, and finally purchase days later from a different device than they used while browsing. If AI isn’t anchored in identity, it struggles to connect those touchpoints. Instead of amplifying relevance, it amplifies noise. See our predictions for Black Friday 2025 Why identity is the GPS for AI-driven holiday advertising Identity is what turns AI from a blunt instrument into an accurate tool. By unifying fragmented signals across channels and devices, identity provides the consistent consumer view that AI needs to be effective. With that foundation, AI can do more than churn out models. Instead, it can: Identify the right audiences and filter out waste Personalize with context, not just scale Measure real outcomes, linking exposures to visits and purchases Identity doesn’t just improve efficiency; it creates accountability. And in a season where every holiday advertising campaign dollar is scrutinized, accountability is the difference between investment and waste. Why connected data will make or break Cyber Week How to turn complexity into clarity this holiday season This year's holiday advertising season is complicated. Marketers are confident, consumers are cautious, and AI is somewhere in the middle. The challenge isn’t just speed or volume, it’s accuracy. By pairing AI with identity, you can adapt to real behavior instead of assumptions. You can build campaigns that are consistent across connected TV, retail media, and social platforms. And you can prove results when it matters most. AI isn’t a holiday miracle. But when it’s powered by identity, it can give you clarity in a noisy season and proof of performance when budgets are under scrutiny. Explore Experian's holiday audiences to activate this season What’s the real takeaway for marketers this season? Don’t assume AI alone will save your holiday advertising strategy. It won’t. Consumers still trust human voices more than machines, and your AI models are only as strong as the data beneath them. Identity is the difference between guesswork and accuracy, between activity and impact. This holiday season, the winners won’t be the brands that simply spend more or automate faster. They’ll be the ones that put identity at the core of their AI strategy and meet consumers where they really are. Download Experian’s 2025 Holiday spending trends and insights report to see where consumers are spending and how identity can help your holiday advertising campaigns more effective. Download now About the author Colleen Dawe VP, Advertiser Partnerships, Experian Colleen Dawe is VP, Advertiser Partnerships at Experian Marketing Services, where she oversees revenue growth and client success, helping advertisers harness data and identity to fuel marketing strategies. With over 15 years of experience spanning TV and digital media, she brings deep expertise in data, identity, activation, and measurement to help her clients connect innovation with business outcomes. Holiday advertising FAQs Why isn’t AI enough on its own for holiday advertising? AI works best when it’s grounded in accurate data. Without identity, it can’t connect actions across devices or channels, which limits its effectiveness. How does identity improve AI-driven campaigns? Identity creates a single, persistent view of your audience. That means AI can personalize content, measure conversions, and cut waste with far greater accuracy. What does “identity” mean in marketing terms? It’s the data layer that connects people across their devices, browsers, and behaviors—so your campaigns reach real individuals. How can marketers prove ROI in holiday advertising? By tying exposure to verified outcomes—like store visits or purchases—using identity-linked data. That’s how Experian helps brands move from impressions to impact. Latest posts
What challenge did the pet brand face? A national e-commerce pet supplier wanted to expand into audio advertising to diversify beyond display campaigns. But with only one team member available to test this new channel, they faced three hurdles: Prove performance in a new channel Run lean with limited bandwidth Show purchase intent, engaged site visits, and completion rates fast They needed a partner to handle execution and supply optimization so their lean team could focus on strategy and selling audio internally. Hear how we're working with Audacy to help our clients connect beyond the screen Tune in here The solution: How did Experian Curated Deals help? Audigent, a part of Experian, ran point on setup, optimization, and real-time reporting. The brand turned to Experian Curated Deals. Together we: Streamlined access to curated inventory, cutting intermediaries and boosting efficiency Handled campaign setup and supply-side optimization Delivered real-time demand-side platform (DSP) reporting for agile targeting refinements Provided an extension of their in-house team, giving them bandwidth to focus on pitching audio internally “What stood out about Experian was their real-time control and the depth of their trading team. I knew I could hand them a campaign, and they’d run with it.”Programmatic Media Lead, National e-commerce pet supplier Want to see the full case study? Download it here What results did the campaign deliver? In just a few months, audio transformed from a small test into a top-performing channel: Exceeded KPIs by 63% Increased purchase intent and engagement vs. competing platforms Matched display performance without creative refreshes or incentive overlays Earned budget increases, positioning audio as a long-term investment Reduced internal setup time, freeing the team for strategic projects “Experian became more than just a media partner: they filled critical gaps that would typically require outsized investment in internal resourcing.”CMO, National e-commerce pet supplier Explore more examples of how brands are driving performance with Experian Windstar Cruises Leading athletic retailer Swiss Sense Why does this matter for marketers? For marketers, audio isn’t experimental anymore. It’s a proven channel that can drive both engagement and conversions. This case study shows how brands can: Use Experian Curated Deals to validate new channels with minimal risk. Lean on Experian to handle execution, freeing teams to focus on growth. Drive meaningful engagement and purchase intent, not just impressions. For marketers navigating limited resources and pressure to prove ROI fast, Experian Curated Deals provides both performance and confidence. Want to beat your campaign goals by double digits? Contact us today Curated Deals FAQs What is Experian Curated Deals? Experian Curated Deals streamline access to premium media inventory by eliminating unnecessary intermediaries, optimizing efficiency, and ensuring campaigns perform against KPIs. Why use curated deals for audio advertising? Curated deals help brands test and validate audio quickly, without the heavy lift of manual setup and supply path management. Can audio really drive conversions? Yes. In this case, audio campaigns not only exceeded awareness and engagement goals but also matched the conversion performance traditionally associated with display. How does Experian support lean teams? By managing setup, supply optimization, and reporting, Experian acts as an extension of your team, reducing internal workload while driving performance. Latest posts
In our Ask the Expert Series, we interview leaders from our partner organizations who are helping lead their brands to new heights in AdTech. Today’s interview is with Paul Zovighian, VP of Marketplaces at Index Exchange. Sell-side activation vs. buy-side packaging What’s fundamentally changed with sell-side decisioning, and how does it now diverge from traditional buy-side packaging? Sell-side decisioning is programmatic’s next major evolution – one that redefines how intelligence enters the transaction. Advances in infrastructure and computing power now allow supply-side platforms(SSPs) to act in the crucial pre-bid moment, enriching impressions with context, quality, and data before they reach the buy side. This isn’t just about efficiency; it’s about unlocking new value. Smarter requests mean buyers see only the most relevant opportunities, while publishers gain recognition for the true worth of their audiences and environments. We’re still at the beginning of this shift. Many players still package inventory without engaging in real pre-bid intelligence. As the market matures, the companies that evolve toward sell-side decisioning will be the ones to set the pace for programmatic’s future. Economic shifts with scaled curation As curation scales, what economic levers shift for both publishers and buyers, and how do those shifts influence deal structure and media planning? As curation scales, one of the most powerful levers is data. It’s the industry’s most valuable asset, and on Index it keeps its full worth. We don’t take a platform cut or add hidden fees, so data partners benefit from the clearest, most efficient economics in the market. Data vendors gain confidence that their economics aren’t eroded by a platform tax. For publishers, this means stronger yield and more ad spend flowing directly into working media. When data retains its full value, it enhances how impressions are packaged, priced, and differentiated—driving more competition for quality inventory and more opportunities for revenue. For buyers, it means compressed supply paths and total transparency – they know exactly what they’re paying for. With no intermediaries and full transparency into economics, buyers gain a clearer view of where their budgets go and the confidence that their investments reach real audiences in trusted environments. They benefit from cleaner supply chains, better performance, and more meaningful alignment between spend and outcome. The result is a healthier marketplace where both sides benefit from efficiency, fairness, and scale. Moving decisions upstream for value What decisions historically made in DSPs should now move upstream to publishers or SSPs to unlock more value, and which should remain buy-side? Decisioning is no longer confined to demand-side platforms(DSPs). We can enrich impressions by applying intelligence — via data, algorithms, creative technology, and more, before they even reach the buy side — adding context, filtering out low-quality supply, and expanding audience discovery. This isn’t about shifting roles; DSPs remain critical for campaign strategy, optimization, and budget allocation. The sell side simply ensures every bid request is smarter from the start, creating more value for all parties. In doing so, we also alleviate pressure on DSPs — enabling more comprehensive data discovery by searching for signals at the top of the funnel, prior to optimization. That means DSPs can focus on what they do best, supported by a cleaner, more transparent supply path. Index Marketplaces use cases explained Index Marketplaces is designed to enable the strength of our partners, and Experian brings one of the broadest sets of demographic and audience insights in the industry. That scale enables a wide variety of applications, from more precise audience activation to deeper measurement and analytics. What’s different on the sell side is how those insights are applied. By activating Experian’s syndicated audiences directly at the point of decision, their value is realized in real time and across the full scale of the open internet. Buyers gain a clearer path to relevant audiences, and publishers benefit from stronger alignment between data and media. It’s an approach that ensures partners like Experian can maximize the impact of their assets while helping the market move toward more intelligent, performance-driven activation. Identity signals with stronger privacy For identity partners like Experian, what’s the right way to bring audience, context, and propensity signals into sell-side activation? The beauty of sell-side decisioning is that it reduces the hops in how identity signals are applied. Without it, IDs have to travel through multiple platforms, creating extra handoffs and additional risks of data loss or leakage. With sell-side decisioning, those signals are obfuscated under a deal ID and applied directly at the point of decision. That means audience, context, and propensity data are activated securely, without ever leaving the sell-side environment. For partners like Experian, it’s the cleanest path to value: fewer hops, stronger privacy protection, and clearer economics for everyone in the chain. Contact us About our expert Paul Zovighian VP of Marketplaces, Index Exchange Paul Zovighian carries over a decade of industry expertise, stemming from his analytics and optimization roots to his current post as VP, Marketplaces, where he is focused on the commercial activation of Index’s newest product, Index Marketplaces. Previously, in his role as VP of corporate development, Paul led Index’s first-ever business acquisition. In his spare time, he enjoys long walks on the beach and befriending cats in NYC’s thriving bodega community. About Index Exchange Index Exchange is a global advertising supply-side platform enabling media owners to maximize the value of their content on any screen. They’re a proud industry pioneer with over 20 years of experience connecting leading experience makers with the world’s largest brands to ensure a quality experience for consumers. FAQs What is sell-side decisioning, and why is it important? Sell-side decisioning allows publishers to add intelligence, like audience data and context, before ad impressions are sent to buyers. This makes the process more efficient and ensures advertisers see only the most relevant opportunities. How does sell-side decisioning differ from traditional buy-side packaging? Traditional buy-side packaging happens after impressions are sent to demand-side platforms (DSPs). Sell-side decisioning moves some of that intelligence upstream, enriching impressions earlier and reducing inefficiencies. What does "curation" mean in this context, and how does it benefit publishers and advertisers? Curation refers to the process of organizing and enriching ad inventory with data and context. For publishers, it leads to better yield and more ad spend going directly to their media. For advertisers, it means clearer, more transparent supply paths. How does sell-side decisioning improve privacy? By applying audience and identity signals directly on the sell side, data stays within a secure environment. This reduces the number of platforms handling sensitive information, lowering the risk of data loss or leakage. What role does Experian play in sell-side decisioning? Experian provides demographic and audience insights that are activated directly at the point of decision. This helps advertisers reach the right audiences more effectively while ensuring publishers can maximize the value of their inventory. Why is moving decisioning upstream beneficial for DSPs? When publishers and SSPs handle some decisioning earlier, DSPs can focus on campaign strategy and optimization. This creates a cleaner, more efficient process for everyone involved. What is a deal ID, and how does it enhance privacy? A deal ID is a unique identifier used in programmatic advertising to bundle audience and context signals securely. It ensures data is applied without being exposed or shared across multiple platforms. Latest posts