IRCE: Retargeting Yields Increased Revenues for Build.com, Tommy Hilfiger

p { margin-bottom: 0.08in; }

A somewhat controversial but successful marketing strategy generating a lot of buzz these days is retargeting. This is the practice of targeting display ads to consumers based on their prior online browsing behavior. So if you're looking at handbags on Coach.com but don't make a purchase, you'd be served up a display ad on another site promoting Coach's handbags. The whole goal is to bring back these shoppers to the retailer's website to complete a purchase. In a session yesterday at the Internet Retailer Conference & Exhibition in San Diego, Brandon Proctor, vice president of marketing at Build.com, and Jared Blank, vice president of e-commerce at Tommy Hilfiger, discussed how their brands have benefited from retargeting.

“Consumers are easily distracted and oftentimes can't remember the site they were shopping on earlier in the day,” said Proctor. “We remind them with display ads to help close the sale that day. Don't risk the competitor doing another search and buying from a competitor.”

Build.com attributes retargeting for a significant spike in its website conversion rate. The company's retargeted display ads are consistently seeing clickthrough rates of 2 percent to 3 percent, much higher than previous standard display ad campaigns. Retargeting, whether measuring it by last click or linear allocation, moves the ROI needle for the retailer, said Proctor. And more sales today means more budget tomorrow for additional marketing initiatives, he added.

For Tommy Hilfiger, retargeting's ROI is on par with its search program (search does lead to more sales volume). The apparel retailer views retargeting as an insurance policy — it's willing to pay the $6 to $7 cost per action to have a consumer come back to its site to make a purchase. As Blank noted, it costs money to get consumers to convert.

Making it Less Creepy
The controversy surrounding retargeting is the Big Brother feel to it. How does a banner ad on Yahoo know that I was just looking at running sneakers on Nike.com? The retail industry is well aware of the Do Not Track legislation that's currently being debated in Congress and the implications its passage could have on their businesses. The doomsday scenario for retailers? Consumers have to opt in for any behavioral tracking, said John Kelly, vice president of sales at Criteo, who moderated the session.

Improved creative and multiple product recommendations in addition to the product that the consumer was last looking at within the display ads have made retargeting “less creepy,” said Blank.

Consumers are reacting to behavioral retargeting because it's weird to them that they're getting relevant ads, theorized Proctor. It's “light stalking,” he joked, but consumers are ultimately asking for this. “We're giving the consumer what they actually want — relevant messaging.”

Getting Started With Retargeting
Proctor and Blank wrapped up the session by offering some best practices to using retargeted display ads effectively. They included the following:

• Make sure you have people on your team who can build a product data feed, Blank said. And if you don't, look for outside help.
• Get request for proposals from all retargeting providers, then narrow the list down by who is best able to meet your brand's needs, advised Proctor.
• Talk to your offline marketing department and legal team before launching any retargeting campaigns, said Blank. Issues can and will most likely arise, he added.
• Go with the shortest cookie time window possible (e.g., 14 days) when tracking browsing behavior, said Proctor. This will ensure your brand is top of mind with the consumer when they view a retargeted display ad from you. Also, cookies should expire upon purchase. For example, a customer who's just bought a toilet from Build.com shouldn't be retargeted with a display ad for toilets for a very long time, Proctor said.