I was exposed to my first retargeting ad a few years ago. I was searching for hotels, mainly just browsing through my options with no intent of booking for another month. A few days later while I was online looking at something completely unrelated to traveling, I started noticing the same ads following me around. Confusion turned into worrying: How did the advertiser know I was planning a trip to New York City and needed a place to stay in mid-town?
I had just been retargeted.
So what does this exactly mean? For advertisers, it means putting messages in front of lost prospects who left a website in order to attract them back and convert. For users like me, it can get pretty darn annoying if I'm just on a site doing research but have no intention to buy.
This concept is nothing new to today's marketers, but with consumers all the more wiser now, does retargeting really work? Or will it just be annoying and fall prey to banner blindness?
When Does Retargeting Work?
Retargeting uses behavioral data. Companies know that their ads are being seen by people who have previously shown interest in a product or service. This allows them to target to a highly relevant audience.
For companies that offer many products, such as Amazon, they can take advantage of the data and use it to create opportunities to cross-sell.
We are bombarded by all sorts of ads and distractions online, so retargeting is a way to reel back customers who may not buy today but may decide to buy later. Think of retargeting as a reminder or an opportunity to add on value or offer incentives. For my hotel example, I started seeing ads for 20 percent off if I booked now.
People also spend a lot of time online, so there is the assumption the brand will gain more traction and recognition the more the consumer sees the retargeting ads. It’s a great strategy to stay top of mind.
When Does Retargeting Not Work?
No one likes to be stalked! Companies can create bad will and annoy their audience by not leaving them alone.
When someone makes a purchase or a competitor’s site, there is no way for an advertiser to know this. So they may end up continuously spending money to show ads that won't convert.
Retargeting doesn't work if cookies are disabled or cleared. It also doesn't work as effectively if one uses multiple devices. For example, if someone does a search at the office, the ad won't follow him on his home computer.
So, did I end up booking the hotel on that site? Yes, I did!
If done at the right time, with the right frequency and the right messaging, retargeting can be really effective.
According to AdRoll, 2 percent of shoppers convert on the first visit to an online store, and retargeting brings back the other 98 percent.
Create A Successful Retargeting Campaign Using These 6 Steps
Retargeting should be done selectively and not throughout all phases of the marketing strategy. People don't need to be reminded every day that they've been on your site and should buy your product or signup for your service.
Depending on the buying cycle, I recommend setting a frequency cap of 20 to 25 ads per visitor each month to start. It's better to increase frequency than creep out a potential customer right from the onset. Be mindful that the longer the buying cycle is, the more the ads should be spread out to avoid fatigue.
Timing is also key. Doing it too early (within one to four hours after someone visits a site) could potentially create bad will for your brand. On the contrary, waiting too long is also ineffective. The sweet spot to re-market seems to be between 15 and 30 hours.
If a customer makes a purchase, remove the person from the campaign. If someone doesn't make a purchase within 30 days, he likely won't be making one, so maintaining a clean list is important to success.
Once a person has made a purchase, take him off the re-targeting list and instead offer him relevant products and services based on his past behavior. In my case, after I booked the hotel, I started seeing ads for car rentals.
Think of retargeting as a way to get window shoppers into your store and ultimately buy something. Some people like browsing for a long time, so rotate and test using different and compelling copy and creative. Dynamic tailored ads perform much better than generic ones. Include specific cities, products and promotions you know your potential customer is interested in, and segment by demographics like gender.