Retargeted Advertising: Measure, Mix and Move (Fast)!
On average, 97 percent of website visitors don't buy, and of those who leave without making a purchase, only 8 percent will return to buy later. If you can nudge those that don't buy and get them back to the site, however, they're nine times more likely to make a purchase than a first-time visitor.
This is compelling math that shows why remarketing works so well. Nudge those who don't buy and get them to return. The more they return, the more likely they are to buy.
The most widely used remarketing tactic is retargeted display advertising, where brand ads follow you around the web. However, making retargeted advertising work well requires a deeper understanding of buyer behavior. A visitor who adds an item to a shopping cart is showing clear intent. But within 12 hours, three-quarters of those visitors will have lost interest, never to return and purchase.
This rapid decay of intent underscores that in all aspects of remarketing, timing is critical. You need to reach these prospects fast, while their interest in your brand and products remains high. In advertising terms, it means you have only a few hours to find your visitor on other websites. This is why real-time bidding (RTB) is key to retargeted display advertising. RTB allows you to buy only those ads when you've found your visitor on the web. You only pay for the media impressions that you really want, focusing your budget on finding the highest value right when visitors are most likely to buy.
Here are three best practices to make retargeted advertising really fly:
1. Find them fast, hit them hard. Time is of the essence when you want to recover and convert visitors. The secret is to find the highest quality prospects as quickly as possible, and hit them hard. RTB enables you to do exactly this, but is only part of the answer. Finding your visitor fast also means that you need maximum reach. You need to be "listening" on as many of the major ad exchange bidding streams as possible. This gives a secondary benefit of being able to pick and choose which impressions you want to bid on since you now have choice across a broad number of publishers.
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.
Retargeted advertising, when done right, is a highly impactful and measurable medium for driving consumers back to your website. Converting those shoppers who have abandoned can be achieved when you initiate ads in real time and in a one-to-one way that reflects the shopper's behavior and interests. It's all about being relevant and timely with retargeting, as well as understanding which half of your ad budget is being wasted.