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In the simplest terms, a Target Audience is the intended buyers of a particular product that the advertisement strives to reach.
A good 99.9999999999...9% of the products that see a wide commercial release have one primary function: to make money. But they are not released blindly without knowledge of who might buy it. Even as the product is still in the conceptual phase, the marketing division researches who might buy it and how best to reach them. This is split up into Demographics.
To give an example of something built with this in mind, the Target Audience of Hannah Montana is 8-12 year old girls. Towards that end, they created a relatable protagonist, put her in a setting that mirrors everyday life, and offered an escapist fantasy of being an average kid at day, pop idol at night. They reached their target audience through advertisements in magazines and websites popular amongst young girls, branding items they are likely to buy, and running TV ads for both the show and its merchandising during other programs popular with them across the Disney-owned channels. Disney has an extensive SOP for rolling out new tween stars, which includes a mandatory appearance on an established show to introduce the new character to the audience.
A product having a Target Audience does not automatically mean it is Pandering to the Base, though. You know that artsy film that has all the critics speechless? It, too, has a Target Audience. Maybe the True Art audience isn't very big, but it was targeted, nonetheless. To that end, even the rare few products that weren't made with a specific audience in mind will have to target one to be a viable commercial release.
One thing is certain, though: if it's advertised, it has a Target Audience.