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Market segmentation - a new digital realm

We've all grown up to hearing about market segmentation where it's a strategic option of clustering customers on certain variables into market segments. It is a four state process as described in the figure below. Post identifying possible customer segments, firms should evaluate the attractiveness of each segment and select segments to target. Subsequently, the firm should position it’s products in each selected segment by clearly identifying differential advantages over competitors and create a marketing mix. Then a formal market plan and a product has to be created that satisfies the value propositions for that customer segment. 

With advent of digital marketing, hasn't market segmentation seen a sea of change ? Does a marketeer still rely on traditional segmentation techniques ? These questions keep popping up and I see the digital marketing landscape and the tools available, Let's look at the way digital advertising creates market segmentation using the ad serving technologies. 

In advertising parlance, segment identifies a unique visitor based on cookies and not related to any information that can attribute to a user in particular by means of IP address, name, email or phone number. Using cookies, extensive segment data is created where demographics, intent, social profile, behavioura   patters etc. are captured. When this data is bundled together to CRM, market segmentation becomes even more potent. 

In advertising audience segmentation is crated by use of ad tags to capture the users who visit certain webpages. For example, a user who visits a product update page can be tagged into 'keen follower of product' segment and then follow up to delivery targeted ad/opportunities to capture his details into a CRM for putting this segment information into play. This integration is needed as market segmentation data generally do not capture any additional data apart from random cookie id. 

The ad tags that are put up on website do not have any ads to delivery but capture only cookie ids. It plays a important role to identify and plan what segments to be created and how frequently and rate you wish to refresh the data. There are some segment vendors like Bluekai who provide rich data can be leveraged for utmost success. 

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