Facebook allows very targeted ads based on demographic
information. This is great for organizations that know demographics of their
users. This could also be an effective way for many small companies and startups
to reach only targeted segments and save them from advertising to people they
don’t think would buy their product or service. However, targeted advertisement
may work for startups who have not figured out their target segment.
Startups, even after initial market research, may need more
exploration on their user base after releasing the products. Suppose a startup
comes up with a great but expensive fitness product and believes that young athletes
would buy it. They target users between ages of 18-24 interested in sports
based on their Facebook profile. But because of high price, they don’t sell
many. The startup would not be able to find other potential verticals because
the ads were not being shown to any other demographics. It’s possible that the
high price of product makes more sense to older people with more disposable
income. The product may also appeal to people who are not into sports but want
to improve their fitness. Demographic profiling promises a lot but business may
miss opportunities if they use it as their only marketing strategy on Facebook
advertisements.
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