The Funnel

An overview of Microsoft's Audience Targeting Options.

Search used to be all about keywords.

You think about what search queries your potential customers would search for, and you bid on those terms.

But search is changing rapidly. Specifically, keywords are being replaced by audience networks.

Against the backdrop of such changes, Microsoft released a targeting playbook last week that gives a breakdown of all the audience targeting options the platform has to offer.

"Whether you take advantage of the rich set of audiences provided by Microsoft Advertising or onboard your own, you can discover new customers or retarget those who have shopped with you before," Microsoft wrote in an official blog post on its website.

Microsoft says its audience targeting features will help marketers find more relevant customers and show your ad to audiences where conversions are more likely.

For example, ads shown to product audiences saw up to a 100% higher conversion rate than ads shown to non-audience targeted users for shopping campaigns. LinkedIn Profile Targeting audiences saw a 42% increase while remarketing lists were increased by 34%.

When it comes to LinkedIn Profile Targeting audiences, ads saw a 42% higher conversation rate, while remarketing lists were up by 34%.

Here we will break down the seven audience targeting options that Microsoft offers and when they are most appropriate to use.

Why use Microsoft Audience Targeting?

As mentioend before, the emphasis in search advertising is shifting away from keywords toward demographics and audiences.

Luckily, combining your own customer data with that of Microsoft's can be a powerful way to better target your own customers, or reach new customers.

Microsoft offers seven overall audience targeting options.

1. Microsoft Remarketing

Microsoft remarketing is similar to what Google offers.

The feature allows marketers to reengage with searchers who have visited a website before and are more familiar with a businesses' brand or products.

According to Microsoft, 75% of cart abanonders have intent to buy. Which means while they didn't make a purchase their first time, they may very well on the second attempt.

You can read a helpful breakdown of how to set up a Microsoft remarketing list here.

2. Microsoft In-Market Audiences

In-market audiences are curated lists of customers who have shown purchase intent signals within a particular category, including searches and clicks on the Microsoft Search Network and the Microsoft Audience Network and page views on Microsoft services.

According to Microsoft, ads shown to in-market audiences had a conversion rate that was on average 17% higher than the same ads shown to non-audience targeted users.

Microsoft also offers the option of importing in-market audiences from Google if you are already using them for Google Ads.

As of now, Microsoft In-Market Audiences are only available in the United States, Canada and Australia.

You can learn more about them here.

3. Microsoft Custom Audiences

Custom audiences are remarketing lists that are generated by using your own customer data to create richer user segments. Custom audiences can be used together with remarketing lists via your data management platform, or they can be used separately from remarketing with no UET required.

The Google equivalent is called remarketing with DMP data.

The audience list is created with first-party customer data. But to use custom audiences, your business needs to work with a DMP that is partnered with Microsoft Advertising, such as Adobe Audience Manager, LiveRamp or Oracle BlueKai.

According to Microsoft, custom audiences delivered twice as high of a CTR compared to other audience targeting settings.

More information about how Microsoft Custom Audiences work can be found here.

4. Microsoft Product Audiences

Microsoft product audiences help you target users and display more-relevant Product Ads.

This feature allows you to target users based on specific product IDs they've interacted with to show users ads with those same product IDs, otherwise known as dynamic remarketing.

The Google equivalent is called Dynamic Remarketing.

According to Microsoft, 92% of first-time retail site visitors do not make a purchase. This makes them prime candidates for dynamic remarketing campaigns, to remind them about a product they saw on your website.

In order to use Microsoft's product audiences, you need to have a universal vent tracking (UET) tag, as well as a page type and product ID.

You need to have a product feed in order to use them for Microsoft Search and Microsoft's Display Network.

Click here for more info.

5. Microsoft LinkedIn Profile Targeting

Microsoft offers targeting options based on LinkedIn profiles.

You can find the audience you are looking for based on their LinkedIn profile information. This allows you to create an audienced based on information in a person's profile, such as the company they work, their position and the industry they are a part of.

On average, the CVR for LinkedIn Profile Targeting campaigns are 42% higher than when the same ads are shown to non-audience targeted users.

6. Microsoft Similar Audiences

Basically Microsoft's version of Google's product with the same name, Similar Audiences allows you to connect with additional users who are similar to your current customers.

Microsoft finds customers who are similar to in your remarketing lists, giving you an increased pool of potential customers.

To use Similar Audience, you need to have a remarketing list which requires a UET tag.

Similar Audiences is currently in pilot in the USA. More info can be found here.

7. Microsoft Customer Match

The last and final audience targeting option, Customer match uses a businesses' own data to target and engage with its customers, such as email addresses. They are then targeted on the Microsoft Search Network and Microsoft Audience Network.

Due to privacy regulation, they are unavailable in EU countries, as well as Norway and Switzerland.

How to use Microsoft's audience targeting features

Microsoft recommends combining its several targeting solutions in order to achieve the best results in your campaigns.

Audience targeting features can be set at a campaign level of ad group level, making them easily adaptable and customizable.

In particular, the audience targeting features based on your own data include:

• Custom Audiences
• Customer Match
• Remarketing
• Product Audiences

The targeting features based on Microsoft's data include:

• In-market Audiences
• LinkedIn Profile Targeting
• Similar Audiences

Microsoft says it will not charge you multiple times and instead will only show your ad on the audience list with the highest bid modifier.

Also, Microsoft offers ad customizers which when combined with audience targeting can increase the relevance of your ads.

Ad customizers work by automatically updating themselves based on Expanded Text Ads that you provide. These Expanded Text Ads can then be modified to be serviced to different audience lists for different purposes.

Microsoft Audience Targeting Best Practices

Microsoft offered four best practices for how to use Audience Targeting effectively.

1. Capture Mobile Traffic

By focusing on mobile traffic and multiple devices, you can reach more customers. Up to 25% of Microsoft Search volumes from mobile.

2. Test different campaign types.

Audience Targeting can be used in conjunction with shopping campaigns, Microsoft Audience Ads and Dynamic Search Ads. Don't limit yourself to just one combination, but try out all the different options available.

3. Bid on broader search terms

Instead of bidding on broader search terms with lots of traffic and that are generally more competitive, consider using audience targeting instead to keep your costs in check.

4. Use broad match instead of exact match

By expanding your audience targeting campaign to broad match instead of exact match, you can ensure greater exposure and more results.

While keywords are still a relevant aspect of search, there is no denying that marketing toward audiences makes sense in an age of big data. If you are familiar with the way Google audience targeting works, and have yet to try it on Microsoft, perhaps it is time to give it a shot.

You can read Microsoft's full report here.

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