How Luxury Brands Can Use Audience Segmentation This Black Friday
Black Friday has become a major event for retailers and customers alike. Drawn by the promise of low prices and exclusive deals, customers flock to their favorite brands looking to pick up the products they’ve been waiting all year for — and luxury brands are meeting expectations. In 2022, the likes of Fenty offered a 25% site-wide discount and up to 60% on selected ranges, and Mulberry offered up to 30% off on their website. This year, even better deals are expected to land.
If you're planning on getting involved with Black Friday, there's no better way to reach your customers than with targeted ads. In this blog, we explore how luxury brands can use audience segmentation to boost the performance of their targeted ads and drive sales this Black Friday.
How Black Friday Benefits Luxury Brands
Before we dive into the mechanics of audience segmentation, let’s first look at some of the concrete benefits that engaging with Black Friday holds for luxury brands specifically. With a retail event like Black Friday, brands should not only target their usual customers (the luxury advocate) but those who might not typically engage with their brand (the aspirational customer):
An aspirational customer refers to someone who has not yet reached the earning potential required to live a full luxury lifestyle but whose level of disposable income allows for the occasional luxury indulgence. These customers are often willing to make purchases if discounts are available, such as those found on Black Friday.
Luxury advocates, on the other hand, are customers who engage with luxury brands but are not necessarily loyal to any one brand. They can be persuaded to jump ship from their preferred brands if presented with a compelling enough price, service, or offer. Customers such as these can be engaged during events like Black Friday by offering them the best possible deal — which is exactly where targeted ads can come in.
With the right Black Friday offers and promotions, targeted in the right place to the right customers, luxury brands can increase sales to those who might not usually purchase their products. Ultimately, this will lead to higher revenue and potentially create new loyal customers and brand advocates.
However, just identifying aspirational customers and luxury advocates is not enough. Brands need to determine what these customers want and how best to serve them. This is done through comprehensive market research and an analysis of trends and competitor action.
Why a Paid Advertising Strategy With Audience Segmentation is Best for Your Black Friday Campaign
In short, audience segmentation is exactly what it sounds like — it’s the process of dividing your audience or potential customers into groups to deliver more tailored, targeted messaging to each group.
Audiences can be segmented based on a number of factors, such as:
Age
Geographical location
Income band
Ethnicity
Education level
And more
Determining how to segment your audience is crucial to ensure you’re targeting the right people with your ad campaigns. If groups are not devised and specifically catered to, you risk promoting ads that speak to no one in particular and drastically decreasing your return on ad spend (ROAS).
How to Use Audience Segmentation for Better Results: A Case Study
We recently worked with a luxury brand that was looking to target various segments of its audience more directly through paid ads. Using our work with this client as a case study, here is the process we followed to maximize their ad spend and target their customers as efficiently as possible.
STEP 1: DEFINE YOUR TARGET AUDIENCE AND THEIR NEEDS
As mentioned above, identifying and defining your target audience is just the first step — you also need to identify and define their needs to determine how to best serve what they’re looking for.
Creative is king when it comes to finding the right target audience. Since the introduction of iOS14 in 2021, the ability to target users via in-platform audience definitions (competitors, interest, topic, etc) has become increasingly difficult due to poor match rates.
We found success by leaning into a larger audience pool while leveraging creative as our audience definition. Harnessing new tools such as Meta’s Advantage+ Shopping Campaigns (ASC) allowed for efficient scale with increased segmentation in play.
Creative will ultimately dictate your target audience. In this case, we quickly cleared the learning phase thanks to the volume of transactions they processed, allowing us to reach our target audience rapidly. From there, creative variety will help narrow the target audience further, allowing for top-performing product categories and stylized ads to hit the most engaged users at just the right time.
STEP 2: CHOOSE THE AD PLATFORM THOSE CUSTOMERS ENGAGE WITH MOST
Once you have your audience segments and their needs defined, you need to determine where they are spending their time to target them most effectively. If you put resources into Twitter ads but your target audience mostly uses Instagram, they’re unlikely to see or engage with your brand.
In our case, our partner’s audience was mostly on Facebook so this was where we focused our efforts through the use of a separate ASC sale campaign.
STEP 3: CREATE YOUR SEGMENTS IN YOUR PLATFORM
With your platform(s) chosen, it’s time to create your segments in the platform itself. This will differ depending on which platform you use but will always be driven by who your target audience is and what they’re looking for.
Take into consideration your audience and their needs to create the most optimized segmentation in your platform of choice.
STEP 4: TAILOR YOUR MESSAGING TO RESONATE SPECIFICALLY WITH YOUR AUDIENCE
Again, this step comes down to knowing and understanding your target audience. As a luxury brand, our partner was targeting customers on the higher end of the income scale and those who are interested in high-quality, aesthetically pleasing, and environmentally conscious products.
We created ads that spoke directly to this audience, their concerns, and their desires. It doesn’t matter what your audience is looking for, as long as you know what it is and how to target their specific interests. Without tailoring your message to your audience, they are unlikely to engage with your ads or see your content.
STEP 5: LAUNCH YOUR AD CAMPAIGN
With everything else in place, it’s time to launch your ad campaign and start attracting customers. It’s important to keep an eye on how your ads are performing using in-platform and sales analytics and to refine your approach as much as possible to maximize ROI and engagement.
You should also interact and engage with your audience where possible, particularly on social media where you can speak directly to your customers.
The Results
Following this strategy, we achieved great results for our client:
ASC sale/ASC business as usual (BAU) campaign breakout strategy for Labor Day Sale flighting resulted in surpassing ROAS goals from blended ASC activity by 126%
By breaking the sale promotion into its own campaign, we drove a significant uplift in orders and revenue from the ASC sale creatives directly
Historically, sale creatives would eat up the majority of spend and scale during promotional periods, leaving BAU creatives with limited visibility and conversions. Moving the sale to its own ASC campaign enabled us to push spend for the sale further and drive more revenue for the brand, as structure ensured daily budgets for the ASC sale campaign would be applied to sale creatives only
This heightened average order value and led to an even stronger ASC sale performance, surpassing the ROAS goal by 170%
This strategy also allowed for more proactive optimizations as performance was derived solely from sale assets
If you’re looking to boost sales, drive engagement, and increase awareness of your luxury brand this Black Friday, audience segmentation coupled with targeted ads might be the approach you need. Employ the tips above to supercharge your Black Friday campaign and provide your customers with the products they’re looking for.
Block & Tam have been helping luxury brands with their digital marketing for years. Get in touch today and find out how we can help with your next campaign!
