In a down economy, marketing budgets suddenly become extremely expendable. Typically, they make a company’s list of “Top 5 Areas to Slash and Burn.”  Yet, affiliate marketers still need to squeeze out a greater ROI with the shredded remnants, right? Why not ensure these precious ad dollars land where they can get the most green for the go? Using response-based targeting is one way to do this.

When it comes to potential customers, marketers may not be dealing with who they think they are dealing with.  While a product may be marketed toward a specific audience, that doesn’t mean that every person clicking through the ad and ultimately making a purchase is a member of that group. Relying solely on demographic or psychographic data may exclude a whole segment of potential sales. Response-based targeting can help marketers reveal this potential.

With response-based targeting, a product is presented to consumers who have been the most responsive to specific advertising efforts, regardless of their demographic/psychographic profile. To gain this information, sales data must be analyzed for patterns that reveal which customers purchased the product because of their exposure to advertising or based on previous shopping habits. Once those patterns are set, data is organized in order from most responsive to least responsive. Voilà!  Often times, the data determines that an entirely different population of consumers is responding and buying. That is exactly why Adknowledge uses response-based targeting with its affiliate marketers – to unlock the hidden money-making potential for its clients.

Migrating from the current comfy-cozy target marketing strategy to response-based marketing might require a major shift in thinking. Before taking the leap, conduct a little research. Determine which offers from the past year performed best and why. Look for buying patterns during those times, and use that research to help you decide if a change is needed.

Response-based targeting isn’t without its pitfalls. Affiliate marketers should keep the value of the customer vs. the cost to advertise in mind to avoid overspending. It’s a bit of a balancing act, and careful data analysis is essential. Even if the numbers suggest a move into pricier media outlets, it may not be the right move, at least not right now. Using a combination of response-based marketing and demographic/psychographic marketing methods might make the most sense. At the very least, analyzing sales data using a response-based approach is worth the time and effort.

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