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Comparing different demographics with each other provides us with far more insight than just looking at Google Analytics users as a single pool. Google Analytics makes this process really easy with the use of segments, ensuring that you can identify and target the demographics that particularly matter to you and your business.
The image below provides an example of dividing users into three different female segments, the 18-24 year olds, the 25-54 year olds and the 55-64 year olds.
Looking at these graphs, to which age group would you want to focus your advertising budget?
This chart is interesting for several reasons. While the revenue and number of transactions is clearly in favour of the 25-54 year olds (since they are such a large buyer group) the highest conversion rate actually goes to the 55-64 year old women. These older women also had a higher average order value.
In general for this store, targeting the older women specifically on the website would be a poor move because they do not make up the majority of sales. However, because older women have a higher average spend and a higher conversion rate, you could potentially get more sales by adjusting the bid on any advertising platforms slightly higher for older women. Additionally re-marketing to the older cohort of women after they have been to the website is likely to be money well spent. The higher average order value means that that there is likely to be a higher profit margin on sales to these women, which makes re-marketing to them good value.
Depending on your business, you might find that you can micro-segment your offer and create satellite websites where you target very small but highly profitable demographics separately. In this case you would want to exclude the niche segment from your advertising to your primary website (so that your satellite website doesn’t compete with your main brand) and then customise your satellite website’s branding and messaging towards serving this niche market separately from the mass market on your primary website.
Be careful not to be misled by small numbers when comparing demographics. Google Analytics doesn’t maintain demographics data on all of your users and so you are typically only able to find out the demographics of 40-60% of your website traffic. Depending on traffic and conversion numbers this may not be enough for you to draw true conclusions.
Also if you find that a small segment has a high conversion rate and high average order but these transacting users are all coming directly rather than through your internet marketing, it might be that they are responding to a different advertising medium such as radio, TV or print media and not through your paid online marketing. If this is the case it might not be beneficial at all to increase bids on your advertising to this segment. Always keep an open and curious mind when analysing your users and don’t jump to conclusions too quickly!