As targeting choices become more sophisticated, the impact on return on ad spend compounds — for better or worse
An analysis from TransUnion sheds new light on the impact of audience composition on marketing performance, showing that making the best targeting decisions can have a compounding effect on return on ad spend (ROAS}—an upside of up to 9x.
The analysis, based on real-world campaigns from 25 TransUnion measurement clients across five verticals, revealed a widening performance gap as audiences became more targeted: An audience built with two optimal consumer traits had a 3.6X ROAS upside, while an audience with three optimal traits had a 7.2X ROAS upside.
Conversely, the analysis also highlights the risk of making sub-optimal targeting decisions, i.e., the more campaigns were targeted to the wrong audience segments, the worse they performed. At the farthest end of that spectrum, mistargeted campaigns saw –90% ROAS, placing fresh emphasis on the importance of audience building to the bottom line.
“In a world with thousands of targeting choices, the challenge is selecting the most effective option from many that appear similar,” said Matt Spiegel, EVP of TruAudience Growth Strategy. “Our data proves that even within common attributes like income or age, the performance difference can be massive.”
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Positive and Negative Impact of Targeting Sophistication on ROAS
Single
Characteristic
Audience
Two
Characteristics
Combined
Three
Characteristics
Combined
Four
Characteristics
Combined
Six
Characteristics
Combined
Correct
Decisions
97%
3.6X
7.2X
8.3X
9X
Wrong
Decisions
-49%
-78%
-88%
-89%
-90%
The analysis evaluated 26 targeting attributes across six distinct categories such as age, income, presence of children, and neighborhood type. The findings showed that even subtle variations in targeting led to significant swings in return on ad spend — reinforcing the need for smarter audience strategy.
Rather than defaulting to broad assumptions — like “go after high income” or “target by age group” — marketers have an opportunity to uncover more precise combinations, often where they least expect them. The analysis reveals just how much performance can hinge on thoughtful, data-backed audiences.
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“This isn’t guesswork — it’s measured behavior,” said Mike Finnerty, SVP Marketing Solutions at TransUnion. “Recognizing the impact of the best targeting decisions on the bottom line and pulling out actionable insights is only possible when you have a persistent view of identity that runs through every marketing activity, from planning to measurement.”
Ultimately, this analysis illustrates the true potential of multi-dimensional targeting, putting it alongside engaging creative as a key driver of marketing performance.
“In marketing landscape, great creative and thoughtful precise targeting are both needed to create the best outcomes. And it is worth noting that targeting decisions by themselves, especially more advanced targeting strategies, are independently impactful,” concluded Spiegel.
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