Mark Ritson: Those who bash segmentation and targeting are talking nonsense

There are many debates taking place around one of the most significant sections of marketing strategy – segmentation and targeting. Most are nonsense.

The tactification of marketing has many implications but one of the most annoying is that we appear to be increasingly obsessed with the communication part of our discipline at the expense of meatier strategic questions that were once at the centre of our fair industry. I am as guilty as the next marketer of getting hung up on content marketing (which is bollocks by the wayor the ongoing battle between TV and digital video at the expense of bigger, more important marketing topics.

Last week, we got several reminders that the deeper, more meaningful stuff can occasionally rise to the surface and disturb the ephemeral baubles that increasingly clog the marketing surface. In different corners of our discipline there have been various debates taking place recently around one of the most significant of these subjects – segmentation and targeting.

In these very pages, for example, we encounter Maria Koutsoudakis, who has the unenviable task of being head of brand and marketing for Marks & Spencer’s general merchandise division. You know, the non-food part of the business that is currently in free fall. According to Koutsoudakis, the way forward appears to be to adopt an attitudinal segmentation, reject any demographic indicators and then target everyone.

“Fashion attitudes are ageless,” she tells Marketing Week. “In the past, businesses have gone wrong as they have tried to pigeonhole a 25-year-old woman to look a certain way but the reality is there are some 25-year-olds that want to dress like 50-year-olds as they favour a more sophisticated style. There are also some 50-year-olds who want to dress like 20-somethings. The key is to focus on a fashion attitude that all age groups share.”

READ MORE: M&S targets attitude not age to rebuild fashion business

Far be it from me to suggest that this approach might be nonsense but, well, I think it might be nonsense. For starters, this entire process sounds suspiciously data-free. If there was a giant quant survey of M&S customers showing that 25-year-olds really do have the same attitudes and tastes for fashion as 50-year-olds I would eat my (M&S) underpants.

Although it is terribly trendy to suggest that age or gender no longer play a role in how people think, feel and buy, the unfortunate reality is that when you actually conduct a survey and cluster customers on fashion tastes, some pretty big differences are heavily, though not completely, associated with 20th-century variables such as  age and gender. And even if they do want the same things, good luck convincing the 25-year-old that she should wear what the 58-year-old is modelling over in aisle five.

What is needed for proper segmentation is, of course, a bit of data. Which is why I had some sympathy for Admiral Insurance last week.

Unlike M&S, Admiral was very keen on targeting a specific group, in this instance young but safe motorists. To identify this segment the insurer had planned to analyse younger consumers’ Facebook pages and use an algorithm (or something) to identify which drivers were lower-risk than their peers.

Apparently, writing in “short, concrete sentences” and “using lists” were among the indicators of a safe pair of hands behind the wheel. Presumably pictures of bongs and the use of the  words “on a massive flashing bender” worked in the opposite direction.

This rather innovative approach to behavioural segmentation was stopped short by Facebook, of all companies, which noted that “protecting the privacy of the people on Facebook is of utmost importance to us” and promptly prevented Admiral from running its analyses on the site.

We were left, in the end, with the always outstanding IPA Effectiveness Awards which, once again, provided excellent insights into the challenges of segmentation and targeting. In particular, as AMV BBDO joint chief strategy officer Bridget Angear noted in Campaign, almost half of the shortlisted entries focused on – look away now – targeting a very specific segment of the market.

This unambiguous flouting of the Ehrenberg-Bass Institute’s new orthodoxy of “sophisticated mass marketing” (target everyone, but preferably in a cravat and with a glass of Pimm’s at hand) will clearly not be tolerated by the devotees of Byron Sharp’s book ‘How Brands Grow’.

This enormous army of adherents will react very badly, I will wager, to anything getting shortlisted that does not follow precisely Sharp’s scientific principles, as indeed they will to this column and its clear piss-taking of the aforementioned orthodoxy.

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Comments
  • Jonathan Pritchard 11 Nov 2016 at 9:41 am

    I think what is really interesting is that the Sparks data should have helped filled some of the insight gap.

  • Mark Hodson 11 Nov 2016 at 9:52 am

    Isn’t this just the opposite of the ‘targeting millennials as a segment is bollocks’ argument? They are, by definition, an age segment, which you are implying above is different to other age segments?

    • Mark ritson 12 Nov 2016 at 1:30 am

      Nope. Demographics are crap. But behavioural segmentation in which we look at demographics after we have some clusters identified is a different, more valid approach.

      All the girls like punk is sexist crap. But if 84% of the people who choose pink are female, we have an insight.

  • Jonathan Cahill 11 Nov 2016 at 10:49 am

    Amen to this. In times of increasing accountability it is curious to see the idea of covering the waterfront. How can that be efficient?

    It was refreshing to see some reality applied to Byron Sharp. Looking at his TED talk, he came across as smug and trite. The fact that someone who comments on marketing thinks it is merely buying and selling certainly seems to abandon any segmentation of thought – otherwise known as the definition of a word. If someone doesn’t have a clear idea of what a word stands for then, by logical deduction, they can’t know what they are talking about when they use the term. As appears to be the case with Sharp.

  • Vincent Balusseau 13 Nov 2016 at 1:51 pm

    Mark, I think you are (purposely) oversimplifying Sharp and colleagues arguments…just to spark debate 🙂
    I do not believe they say “you should target everyone”. Rather, that brand growth implies reaching all category buyers.
    Also, no one will deny that greater ROI can be achieved through narrow, even very precise targeting (which is what Ecommerce companies, among others, do a great job at). However, according to Sharp and colleagues, sustained growth in market share implies reaching light buyers of your brand as well as light buyers of the category (at the very least in categories with a high degree of substitution among brands, which is obviously the case in FMCGs). There, ROI might be lower vs narrower approaches, but might be key to reaching higher sales volume & market share.
    In my view, what Sharp views as counter productive is the over-focus on a subsegment of highly engaged, over-loyal consumers. What’s more, mass-media advertising targeting all category buyers will reach these highly engaged consumers, as they tend to pay more attention to advertising from the brands they tend to favor.

  • Maarten Lagae 14 Nov 2016 at 11:11 pm

    What Vincent and others said. I find all too easy to predict that an ‘army of adherents’ will criticize your POV before ‘they’ have said anything. Are you telling me these internet discussions are rigged? You don’t have to spur them you know …

    On your hypothetical statement to clarify what an insight is – “IF 84% of the people who choose pink are female, we have an insight.” That is still plain data to me, not an insight.
    A real, yet equally hypothetical insight could be – “Many females still opt for the color pink in their clothing and other visible consumption choices as they feel a societal pressure to adhere to traditional role patterns that they do not support.’
    Now before you start attacking this insight (see what I did there?) – please mind that it is hypothetical statement based on no proof whatsoever, but at least it would give sense of direction for a strategy or even unlock creativity for a new product, campaign, etc.

    If you want to read more about gender fluidity and how it is ‘trendy’ with the younger generation, feel free to read this article. I should warn you, they do use a fair amount of swear words to amplify their point-of-view: https://broadly.vice.com/en_us/article/teens-these-days-are-queer-af-new-study-says

  • Mark Wilson 15 Nov 2016 at 10:53 am

    Just to throw an added layer of complexity to this debate… One issue that data providers / technology has persistently failed at is recognising that people have different mood states and desires as they change through life. Yes, Weetabix might be on the radio during breakfast time more than dinner time which is logical. However, based on pure demographics a successful business person might be targeted with Cartier or Jaguar ads because of their income / life stage – but if they’ve recently had their 2nd child, it’s unlikely that they are thinking of spending any disposable income on luxuries. ‘Unfiltered’ data cannot reconcile that without some complex cross-referencing; we still need humans to sense-check what the data may be indicating.

  • Paul Mellor 15 Nov 2016 at 11:18 am

    Interesting take from Bob yesterday on the Ritson / Sharp approaches. http://adcontrarian.blogspot.co.uk/2016/11/reconciling-sharp-and-ritson.html
    I also wear M&S underpants, they’re like totally the best underwear ever

  • Jason Chastain 15 Feb 2017 at 6:13 pm

    In discussions of mass reach versus segmented digital, I never see the *quality* of the ad addressed. A :30 second HD color video with emotional impact is so much more powerful than a banner ad targeted behaviorally, etc. That’s where I agree with Sharp in using mass reach (which is just Television anymore) to reach as many people as possible. Your programming selections help you hit your core, but also the peripheral customers that get overlooked in targeted digital. Sales is a numbers game. I’d much rather reach 3 million future buyers with an impactful, attention grabbing ad than 300,000 targeted with far less interesting ads ignored by banner-ad blindness. The quality of the connection matters. I can still recollect TV ads I saw this week, last month, last year, and many years ago. Some of my favorites are memes gone viral. (World’s most interesting man, etc.) But I have never clicked a digital ad and bought anything. Ever. I can’t remember a single one, except an unexciting pizza banner that didn’t sell me. Native content, retargeting, Mobile banners(most useless of all), are such a weak connection, easily ignored. Targeted intelligently, but weak. Pre-roll works better…but that’s really because it’s an extension of the same video power TV has. Don’t get me wrong, this isn’t an anti-digital rant – I sell it. It’s that I see too many using it exclusively and settling for a slightly profitable scooping of leads, but fail to build a brand. I’ll relate it to a warfare analogy because I’m not into sports analogies: Television is the armor (tanks) on the field. The heavy hitters. They can win they day by themselves if need be. Digital is the sniper. He can turn the tide of a battle effectively, but a sniper cannot win a battlefield effectively by himself. The “tradigital” approach, blending the best both, is what’s unbeatable. That’s why politicians use it; when the stakes are highest for the most powerful positions in the free world, they use TV as the driver, but they use both. Looking forward to feedback on that.

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