It’s time to rethink retargeting
Retargeting is big business and a large part of digital marketing budgets. But does it deserve to be? Crimtan’s Robert Webster tells us why marketers might want to rethink…
Display advertising bought through real-time bidding will reach an estimated $20.8 billion globally by 2017, according to the IDC, and it is expected that a large proportion of this will be used for retargeting.
Retargeting is a tactic with high conversion rates that enables marketers to deliver highly tailored messages to consumers based on previous interactions with a website that didn’t result in a conversion. It is now widespread, with 88% of marketers claiming to use this approach.
Part of the reason for this growth is that retargeting is tailor-made for ad exchanges. Retargeting was hard to do when only a few providers had sufficient reach but ad exchanges now provide access to users at scale, as well as an easy way to find previous website visitors.
So retargeting is big business and a large part of digital marketing budgets. But does it deserve to be? Here are some reasons marketers might want to rethink retargeting campaigns, as well as an explanation of why retargeting shouldn’t be the main focus of any marketing strategy.
1. Appearances can be deceptive. A simplistic attribution methodology – for example, last touch attribution where the final user interaction with the creative gets all the credit for the sale – artificially inflates the benefits of retargeting. After all, many of the sales attributed to retargeting would have happened anyway – perhaps as many as 95% in some instances – and once this is taken into account it dramatically changes the actual ROI of retargeting.
2. Check whether the ad was actually seen. It’s common for sales to be credited to retarget-ed ads that haven’t actually been viewed. As half or more ads may well be out of view, the actual retargeting ROI might be half as much as stated.
Marketers can avoid attributing sales from retargeting to impressions that weren’t seen by using viewability technology to identify which sales are associated with viewed impressions.
3. Avoid high frequency delivery. It might look good from an ROI perspective as users may click eventually, but high frequency delivery really just allows the retargeting company to spend more of the budget. And it is often counterproductive as it annoys web users, which can damage the brand and harm sales.
4. Change the message for users who have already purchased. Retargeting users after they have become customers is a complete waste of money. Instead, why not take the opportunity to talk to new customers and up-sell with other relevant products, or offer incentives for referring-a-friend or similar loyalty offers.
5. Don’t use one message and strategy for everyone. Some retargeting providers are lazy about their set-up – retargeting everyone with the same creative knowing that it will still look good in reports. Others use retargeting strategies that only focus on users close to purchase as this will often produce the best ROI – ignoring other valuable visitors.
Ideally visitors should be grouped according to intention – with example groups including home page visitors, product page visitors, those that have visited many times, those visiting store finders, and visitors who didn’t complete a check out. A retargeting strategy and budget priority should be developed for each group.
Done properly, retargeting can deliver great results, but concentrating marketing budgets on retargeting alone has one obvious drawback. By definition retargeting does not attract new visitors, so only people who have already visited a website are getting the message, and this can be a relatively small audience. It is vital that digital marketers lift their focus from the bottom of the sales funnel and talk to prospective new customers – the ones who haven’t visited their website yet.
New customers are the lifeblood of any business, so reaching in-market prospects and driving them to the website should be an essential part of every digital marketing plan. This involves using a DMP (Data Management Platform) to establish audience profiles and using these to deliver ads to large numbers of similar users in ad exchanges. Businesses that sell a range of products can even separate customers into product groups and develop different profiles for each, substantially improving the performance of prospecting campaigns.
One extremely successful trick that prospecting can take from retargeting is to use dynamic creative to create personalised messaging that is relevant to the user. This can significantly increase the number of visitors to a site, at which point retargeting strategies can take over.
The build quality of dynamic creative must be good – otherwise dynamic creative can look ugly – and it should be created in HTML5 to ensure that potential customers see it at its best on all screens including tablets and smartphones. Dynamic creative works particularly well in verticals with a lot of different products, such as retail and travel.
Essentially digital marketers need to get back to core marketing. The idea of finding new leads and hot prospects then messaging them is nothing new – activities such as direct mail and email marketing are both established direct response practices and retargeting is no different.
Yes, retargeting is simple and produces results, but the funnel also needs to be fed with prospecting strategies. By actively experimenting with different retargeting and prospecting strategies, by segmenting audiences, and by using dynamic creative, brands can arrive at a balance of activity that delivers the ultimate ROI for their digital marketing budgets.
Robert Webster is the chief product officer at Crimtan.