Why Your Company Should Be Using Display Retargeting
Five years ago, display advertising was considered a lost cause. Users were bombarded with untargeted banners across the web, and they simply screened them out of their conceptual radar. In the past two years to three years, however, we've been witnessing an impressive comeback. Display's portion of the online marketing pie has exploded. In fact, eMarketer predicts display will overtake search as the No. 1 online marketing channel by 2015.
One of the main "culprits" in the renaissance of display is personalized retargeting and the significant return on investment lift it generates.
Despite a proven track record, most advertisers have yet to leverage the power of personalized dynamic retargeting. After heavily investing in untargeted media to bring traffic to their websites, users browse their sites, leaving precious purchase intent data behind. All too often, however, this data is then abandoned.
Reconnecting with lost prospects to boost ROI. Many studies have shown that almost 98 percent of visitors to e-commerce sites end their session without completing a purchase. There's no reason, however, that they should be treated as lost prospects. Leveraging their purchase intent data to reconnect with them by showing them a personalized, relevant banner ad makes all the difference.
A small additional investment can generate a ROI of up to 30 times! (A 15 times lift is commonplace.) Buying additional retargeting media will slightly increase the overall cost per action, but will return the entire investment in a user and much more.
For retailers in the market for a certain product or service, personalized retargeting will ensure optimal brand presence (frequency and recency cappings are closely monitored). Consumers will see your brand and your message but, more importantly, they won't see your competitors. Isn't that valuable ROI on its own merit?
Proving incremental value. In an overcrowded display advertising ecosystem, all providers claim their solutions produce real benefit, but marketers are often at a loss. Some maintain that despite countless campaigns that prove the value of retargeting, allocating ad spend to users who have already demonstrated purchase intent is wasteful, claiming those users would end up buying without being exposed to retargeting banners.
To prove that's not the case, an A/B test can be used to show definitive lift trends. In this context, it's important to point out that an A/B test should be viewed as a market research study, NOT a model by which payment should be measured (perhaps this will be viable in the future, when the issues of cookie deletion, cross-device integration and other industry challenges are solved).
For example, a recent A/B test we ran for a major retailer showed 40 percent lift among over 10 million unique users who had been targeted. This test was done as a way to strengthen our relationship, not as a basis for payment on views, clicks or even conversions. The goal was to create a win-win type of partnership. We gained their trust in us and our product and they gained validation for their ad spend and our solution.
Maximizing value of existing customers. Another powerful method to achieve incremental sales and ROI lift with retargeting is achieved by maximizing the value of existing customers. This is done by encouraging repeat buys in addition to increased average order values and lifetime values. Machine-learning product recommendation algorithms — programmed to maximize up/cross-sell opportunities — actually divide the revenue pie in a way that a majority of the sales are attributed to new products that users didn't previously see.
Display advertising in general and personalized retargeting in particular have made giant leaps as of late thanks to disruptive technological advancements (not to mention greater emphasis on creating stunning creatives, but that will be covered in a future post). You can test value of retargeting via display ads by allocating a small percentage of your ads pend towards running a personalized retargeting campaign. The ROI lift will be hard to miss.
Harel Amir is the vice president of performance at myThings, a provider of conversion-driven personalized display advertising solutions.