Retargeted Advertising: Measure, Mix and Move (Fast)!
2. Continuously measure and test. Famously, half the money spent on advertising is wasted. The challenge, so said John Wannamaker, a marketing pioneer, is understanding which half. Given the way that the ad industry has traditionally attributed revenue, this is as true today as it was for John in 1900.
The advertising industry has historically been a bit opaque about measurement. Since digital advertising is easier to measure, the ad industry seems to think that clickthrough attributions are an accurate measure of effectiveness. They're wrong.
Click-based attribution doesn't take into account any other marketing interactions that occurred within that period of time (e.g., email campaigns, promotions, social media, etc.). This isn't measurement. At best, it's an overly optimistic estimate.
For remarketing, the answer is to use an A/B test to set up a control audience where a portion of the traffic gets no treatment, but you still measure the effect. This enables you to measure what happened over the same time period when no ads where shown, and to compare with the ad campaign. The test enables you to measure the precise lift of the campaign. You'll know when you're making money and when you're not. Best practice is to run a control test on an ongoing basis so that your revenue reports are showing you measured lift.
3. Mix and match channels. Retargeted advertising is an expensive medium, costing 100 times more on average per recovered sale compared with a recovery generated via an email. Therefore, the key in retargeting is to focus your retargeted ad budget on one, unidentified visitors, where no email can be sent and, two, high-value identified visitors where an email plus ad treatment has been shown to drive incremental revenue compared with an email-only approach.
This requires coordination between channels and testing to measure how to generate the maximum revenue. When combined in this way, email and retargeted advertising can be very effective, driving a 30 percent increase in recoveries (compared with a nonintegrated approach) and in excess of a 200 percent increase in return on advertising spend.