One thing that seasoned online marketers do is to optimize their site primarily for their target audience, not only the search engines. If you don't think this sounds right, think about it for a moment.
When someone is writing in their phrase into the search box, the search engines will then begin a search for the pages that best represent what they're searching for. If the people are typing in phrases or words that connect to what your Web site offers, more than likely they will be part of your target audience.
The importance of that is that when you know who they are, you then optimize your site for them, not the search engines first. The search engines will catch up once you set things up right.
The major thing to do as far as understanding your audience is to study both online and offline for the way your potential customers communicate. Think of the various functions or groups you've visited throughout your life. Notice how each of them have a certain way of communicating their interests. It is in that communication that you discover the way they view what they are a "community" around. It could be a hobby, school, church, children or any other thing that brings people together.
Check out all the community hang-outs on the Web and find out the interests of the group and how they communicate those interests.
Once you get a hold on those things you can build your site, keyword strategy, ad copy and products or services offered around them. This is a powerful strategy that greatly increases the success of those that use it. You can never obsess or search out your target audience enough.
Other sources for Target Audience:
Why is Your Target Market Important in Branding?
Define Your Target Audience to Grow Your Sales
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