The internet is a powerful tool for connecting with huge numbers of potential customers. Google's Display Network alone consists of two million websites, videos and apps and reaches over 90% of internet users worldwide. But speaking to everyone with your marketing isn't an efficient use of time or budget when it comes to online ads. Instead, businesses need to understand who their most valuable potential customers are and focus most of their efforts on those people. Discover how segmentation can help you find and reach your ideal potential customers.

1. Why should I segment my potential customers?

2. What makes a prospective customer valuable?

3. How do I reach my most valuable prospective customers?

Surveys show that nearly three-quarters of consumers prefer ads that match their interests and shopping habits. Understanding how, where and why people buy from you can be a powerful tool for attracting more sales.

By putting potential customers into different groups — called segments — and considering each one according to its individual characteristics, you can increase your chances of conversions compared to creating non-specific campaigns. Segmenting means you can be selective with your advertising, enabling you to make the most of both your budget and your time. Well-considered segments can help you choose the right keywords and the incentives – if any – to include in ads to encourage potential customers to click through.

To create segments, look carefully at all the available information about your website visitors. Reports from Google Analytics, for example, can reveal details about your most profitable user types. Typical information might include audience demographics and location, type of device used and time of day people are browsing.

The segments you create should be relevant to your wider business goals. If you want to increase sales of a particular product, analyse visitor details that relate to it closely such as how long it took people to buy, which pages they visited before buying or how old the most valuable visitors are.

An online cake supplies shop, for instance, might notice a traffic spike to its decorating equipment page on Tuesday evenings when a popular baking series airs on TV. Most of its website visitors at this time browse cake decorating products, and a small number of them make a purchase. To better capitalise on the attention and encourage more users to buy, the business owner can create a segment for this group and increase the bid amounts on its ad campaigns to reach these highly-engaged potential customers.

Potential customers come in all shapes and sizes, but some are more likely to buy than others. Some users may even be undesirable; perhaps it costs a lot to serve them ads. For segmentation to have the most impact, you need to understand which groups are worth your ad budget investment and which groups to avoid.

Using information from Google Analytics, you can identify the visitor types that buy more than others. But how much people buy isn't the only indicator of value. Some users are valuable because they generate positive reviews or recommend sites to others. There will usually be more than one valuable segment type in every company's potential customer base. Understanding their priorities and habits can help you determine how many ad resources to devote to each.

Let's say a model shop in Bristol has four key segments:

• 25 to 40-year-old male shoppers (who are serious model fans and buy often)

• Enthusiastic teenage reviewers (who browse products but rarely buy)

• Model enthusiasts of all ages (who browse news pages but rarely buy)

• Middle-aged parents (who only purchase in the run-up to Christmas)

Most of the time, the model shop will create ads with serious fans in mind as they are its most profitable segment, but it will also have some ads tailored towards teens to help with word-of-mouth promotion. Come Christmas, the shop should adjust the content of its ads and increase bids briefly but aggressively at the parent segment to make the most of seasonal buying.

Once you've identified your most valuable types of visitor, you can begin to reach them with ads across the internet through remarketing — a method of reconnecting with those who've previously browsed products or services on your website. Google Ads uses segment data to create remarketing lists that help you show highly-relevant ads to these past website visitors. You can also use a feature called Similar Audiences to reach people with similar interests or behaviours as those segments on your remarketing lists.

If the Bristol model shop wanted to increase conversions in its key segment of 25 to 40-year-old male shoppers, it could use a remarketing campaign to reach people in this group who have browsed products but not yet purchased them. The remarketing ads will showcase the specific items that prospective customers have expressed interest in, which means the ad content is highly relevant to those users. The model shop could use Similar Audiences to attract new prospective customers that would fit into this segment too.

Often, remarketing can help businesses capture and convert more of their potential customers online. For example, one UK retailer's remarketing campaign generated a 4.5% conversion rate among repeat visitors compared to 0.68% for new visitors.

Using segment data to understand your potential customers is a vital part of fine-tuning your Google Ads strategy. The opportunities can seem endless online, but to make the most of your budget, it's important to know who your best potential customers are.