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Online retailers are increasingly retargeting consumers on other websites when they have browsed on their own web properties but left without buying anything. 

I've been asking three retargeting providers about how it works, why they think online retailers should adopt the tactic, and how they deal with consumers' concerns about privacy. 

For an example of retargeting in action, head over to the Early Learning Centre or Office website, browse through a few items, then go to the Guardian. An ad to the right of the page (by Criteo) shows some of the items I looked at on the site:

Criteo retargeting Guardian

What is the single most important reason why brands and advertisers should get into retargeting?

Struq CEO Sam Barnett: Retargeting is a way to convert the 98% of traffic that leaves your site without buying. We can drive the lowest cost of sale for advertisers using personalised retargeting.

We target only those users that are most likely to click and buy. In addition, the ads served through our platform are personalised, so they are truly relevant to the customer. This creates a positive perception of the brand; encouraging customer engagement and driving post click sales.

myThings UK MD David Kiashek: The single most important reason to get into retargeting is that it works.

Retargeting is an incredibly efficient method to generate incremental sales and minimize unrealized ROI. Despite large marketing investments, 98% of retailing website visitors leave the site without converting. Personalised retargeting enables retailers to recoup their marketing investment by reaching those users with uniquely tailored ads which convert.

A recent comScore study demonstrated that retargeting outperformed other online advertising vehicles, including contextual and audience targeting with over 1000% increase in website visitations and brand searches.

Criteo MD Micheal Steckler:  Since January 2008, the average online conversion rate of retailers has been falling, from 6% in 2008, to 4.5% during 2009 and 3.6% to date in 2010 (IMRG Capgemini Index). The decline suggests that consumers’ online behaviour is changing from that of a linear transactional nature to browsing and researching products extensively before purchasing either online or on the high street.   

The ramifications of this type of casual shopping and the distractions that draw potential shoppers away from their purchase are that advertiser investments are often not delivering the optimal return on ad spend or sales from existing site visitors. 

Retargeting can be leveraged at virtually every phase of the consumer lifecycle, from building awareness to driving purchases and customer loyalty. The greatest benefit of retargeting however is its ability to convert browsers into buyers at the right time - during the purchase consideration phase.  

What do you have to say about consumers who feel that privacy is being compromised by retargeting? 

SB:Consumers can rest assured that their privacy is never compromised by Struq. All data used in the personalisation process is completely anonymous. Users who do not want to be retargeted with personalised ads can opt out at anytime from receiving ads served by our technology, through just a few simple clicks of the mouse.

Retargeting has received some bad press in recent times, with users feeling they were being stalked or spammed with ads from sites they had visited before. It is in our interest to only serve ads to those people who are most likely to buy. We monitor this process – anonymously – so that we stop serving ads to users who are clearly not in the market for the advertisers' products.   

DK: Retargeting via myThings personalised retargeting solution is one of the more privacy-friendly online advertising options available. We do not store any user data whatsoever on our servers. Any data used by myThings is stored within the end-user’s cookie and does not involve any personally identifiable information. We can never associate a targeted user with an actual person. The only information we know is that an anonymous user has browsed product and category pages on a retailer website

Having said that, any user that so chooses is entitled to opt-out from our campaigns. 

MS: Criteo takes privacy of web users very seriously and respects everyone’s right to privacy. We fundamentally believe every consumer should understand the following with regards to online advertising in general and retargeting in particular: why am I receiving this ad, what kind of information was used to tailor the ad to me, and if I want to, how can I stop receiving ads and others like it? 

The data gathered is completely anonymous and is used for statistical purposes only, and there is no way for us to identify a specific internet user. No data is shared with advertisers or publishers and no third-party data is used for targeting purposes.  

Do customers need to be 'educated' about how retargeting works? 

SB:Yes, they do. Retargeting enables a relevant and useful consumer experience by bringing products and offers right to consumers’ desktops as they browse and compare before they buy.

However, there is some scare mongering in the media about privacy, so that issue is something we as an industry have to tackle together through educating consumers. By highlighting the benefit to their experience and informing them how they can be, and are, in control of how they want to be targeted.

DK: We firmly believe that customers need to be informed about online advertising in general and retargeting in particular, to be able to make an informed decision about their online advertising choices.

To this end, each of our banners features a disclosure icon that informs customers how the retargeting service works and how they may opt-out of the service.

MS: Most consumers are already familiar with and react positively to personalisation, whether it be sharing their location on a mobile device or interacting on a social network.  

For most of us, the issue is simple. We want the right information at the right point in our decision making process.  As more consumers have a personalised web experience (from content to social media) their expectation is that the advertising experience should complement this. 

As well as our clear privacy policy, there have been good steps taken by trade bodies such as the IAB in the UK as well as the NAI in the U.S which we are part of and regularly co-operate with.  

Which kinds of retargeted ad formats are most effective? 

SB:The answer is: whatever works best for their users. All our ads are dynamically created on the fly based on users’ browsing behaviour, so we work to find the most relevant ad for that user. As we are able to customise infinite elements of the ad, we test and see what works in a real-time environment to get the highest response rates.

DK: Personalised retargeting is all about bringing precision to advertising and indeed, it is in our experience that the more granular the banner, the better it performs: 

  • Banners that feature product offerings outperform those that feature only category level offerings and generic messages (like those used in traditional retargeting).
  • Ads that include specific pricing, promotions and sales usually provide a stronger call for action that results in greater conversion rates.
  • Ads that show rich product content – prominent product images and brand names –appeal more to users resulting in greater conversion rates.

MS: Whilst we can serve basic and segmented retargeting, the real benefit for clients is in personalised retargeting. With the level of one-to-one communication that personalised retargeting allows, we typically see click through rates increase by up to 600% from standard display advertising and conversion rates are well above industry average.  

The reason so many advertisers are comfortable with search marketing is because of the specificity enabled through bidding on exact words they wish to associate with their brand – rather than a very broad and competitive category such as a generic audience.

Graham Charlton

Published 1 December, 2010 by Graham Charlton

Graham Charlton is the former Editor-in-Chief at Econsultancy. Follow him on Twitter or connect via Linkedin or Google+

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Keith

I don't think any of the retargeting advertisers get the privacy thing. I understand how the technology works and I understand there is no personally identifiable information, I work in (incentive based) affiliate marketing so I’ve had to address these concerns with people. The issue is what is displayed on your screen, there may not be a privacy problem with businesses knowing what you have looked at but what about other people who use your computer, they can see the kind of things you have been looking at, or worse see something and assume you have been looking at similar things. I can give a personal example of something similar with youtube, at work I manage our digital marketing, we have a youtube channel, shortly after I started I logged into the account. I was shocked to see the videos it had recommended me, all related to an adult video called ‘two girls one cup’ (I wouldn’t recommend looking at it). YouTube tells you what video it is which triggered the suggestion, the video which did was actually a TV advert which had been put on YouTube which was work related. At first I assumed the person who used the account before me had been looking at adult material but it turns out it was this advert I had watched. Fortunately no one else in the office saw this but I could see people in a similar situation at risk of losing their job as a result of something like this. I have since turned the suggestions off YouTube on the account, but I can see many people being accused of looking at inappropriate material, how many people know to opt out of these things. In short consumers don’t want it, ask yourself, have you EVER heard someone say, I wish I had more targeted adverts? (unless they are involved in the online industry of course)

over 5 years ago

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Bob

In response to Keiths comments, the retargeting providers are offering an opt out funtionality and clear explanation to why you are receiving this ad. They will also be unlikely to sign up a advertiser which would offend, for the reasons you explained. I think they fully understand the privacy issue, and are very clear about it. I also do not understand your arguement about sharing computers, anyone using my computer today would be thinking I am about to get my teeth whitened, make a call on my new phone,  and take a holiday. None of which I am, and none of which I can opt out of!

over 5 years ago

Chris Brinkworth

Chris Brinkworth, EVP Americas at TagMan

I think there are some (deliberate?) serious omissions here on what marketers need to know about re-targeting.    

It's called 're-targeting' for a reason.  It's not called 'new user-targeting'.

It needs to be seen at the holistic level, rather than just stealing the last click/view.  

Don't ignore the first upper funnel impression-view, click, email, catalogue, seo.  - that got them to a qualified destination to get a 'RE-targeting' cookie on them in the first place.    

TagMan's attribution reports (or other more complex solutions that show every channel in the path to conversion) consistently shows marketers  that 'yes, retargeting is great' - but also identifies that it's NOT solely driving incremental activity - and that is dangerous to omit. 

You need to see all paths, to make the true analysis - and marketers are missing this trick considerably - and should read up on it (luckily, we have some white papers on our site - but also, drop me a note for some 'client X' results where some retargeting methods are over-rewarded by 600%)

Dont get me wrong, I think re-targeting is great, and when used properly - will steal a lot of budget from Paid brand search terms etc; but - let's get that money the right way and show the correct results/use - rather than just claim this is a panacea. 

over 5 years ago

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Joe

Does it really matter. Someone will only buy your product if it follows the marketing mix. If the shopper has left your site and not purchased anything, then I think there is a huge assumption in thinking that shoving the product one again down their throat will lead to better promotion and eventual purchase. I visit many sites looking at things to purchase, at the end of the day price is king when on the web, because it is so easy to shop around. Short of price fixing I don't think that re advertising a product, or re target does nothing. I would spend my money in looking at the customer and why they failed to convert, more than the promotion.  

over 5 years ago

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Ross Bradley

.... In a point made on my InstaBlog and directed at Nancy Hill, President-CEO of the 4A's (who advises that that [a] the new system will provide a very strong case for self-regulation and consumer protection), I wrote that ............ I too feel (and have written, of such), that [a] the new system can provide a strong case for consumer protection. ,,,,, So, why has it been the case that 'every man and his dog' (almost), have so blatantly been agressively abusing the privileges of the use of cookies (and, that includes a possible misuse of power from premium player/s re; the IP 'addy'), when (ultimately), there really are those .... so 'much bigger fish, to fry'?

http://seekingalpha.com/instablog/36191-lookingconfident/117313-ftc-wants-do-not-track-says-ad-industry-not-helping-adexchanger-com?source=new_post

.

over 5 years ago

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Depesh Mandalia, Head of Digital Marketing at Lost My Name

Can't say I've personally been in the position of being stalked by a pair of pink anything I've looked at online; however the far worse consequence is where a computer is also used by minors

Regardless of what floats your boat when shopping online, your kids shouldn't find out and it is this example which underlines the EU Privacy Directive on tracking cookies... if BondageMaster.com had prompted you with a cookie and stated it may target you when you leave the site you no doubt will have rejected it...

almost 5 years ago

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Depesh Mandalia, Head of Digital Marketing at Lost My Name

ignore the last comment, wrong article!

almost 5 years ago

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