Information Contains Reality

Each time you begin a new customer relationship, you predict the value of that relationship. If you want an ad network to recommend new and better customers, you need to share relevant data with that network. Otherwise, it has no way of knowing which kind of customer it should introduce to you next. The information you provide, often conversion value, needs to be updated continuously. Most marketers send only the amount of an individual transaction, that is, a single and immediate purchase amount. But some have already started sending customer lifetime value instead. That approach can produce better results and better cost efficiency.

So what is the option I would recommend? The first option is to target lookalike audiences in an ad campaign. Its strength is that it is simple and easy. The second option is to target customer attributes, which is a bit harder because you need to explain not just which customers are valuable, but why they are valuable. The third option is to update conversion value into customer lifetime value. If you want more potential customers and deeper insight into what products they like and what behaviors they share, this is the approach you need. But it is better not to start there from day one. Start simply, learn step by step, and build upward.

Marketers used to rely heavily on demographics to find target audiences, because demographics feel familiar and seem to reflect reality. That is why they love to make personas.

Yet the behavioral version is much less glamorous. A customer who visits your site eleven times before making the first purchase may tell you more than age, gender, or household income ever will.

That is because these kinds of information contain reality. Behavioral attributes, such as what people buy and how often they visit, hold far more value than demographics. There is nothing wrong with making personas, but if those personas focus only on demographics, they are wrong.

Shift your attention to data. Look at what customers actually do, what they buy, when they buy it, and how much they buy. There is no stronger signal than purchasing behavior itself.