An online advertising strategy that features retargeting enables companies to repeat their marketing messages at low cost to highly qualified prospects. Retargeting also makes smaller businesses seem like major corporations.
With retargeting, also called remarketing, you pay to advertise only to individuals who have already visited your website, but didn’t make a purchase. The goal of retargeting is to repeat your marketing message to someone who has already indicated interest in your product.
How Retargeting Works
Here’s how retargeting works. When someone visits a company’s web page, the site places a cookie, on the visitor’s browser. The cookie is a small bit of code that triggers placement of an online display advertisement on a publishing or social media website. The company creates an online display advertisement and hires an ad network to place the ad on web sites. Whenever the browser with the cookie visits one of the websites represented by the ad network, the cookie triggers placement of the company’s display ad.
Here’s an analogy: It’s as if a customer enters a store and leaves without making a purchase. A sales rep of the store follows the person down the street and continues to make a sales pitch to get the person back in the store. Later, the sales rep pops up at the individual’s home every once in a while to mention the store and its products.
Ad networks place display advertising on many of the major national publications and social networks. They also make ad placements in trade journals. Customers may be impressed when they see your ads on major websites like CNN. They don’t realize the ads are targeted to a relatively small number of potential customers. Since online display advertising is priced on a cost per thousand basis, the ad cost is quite low because the number of impressions is limited by the number of individuals who have visited the advertiser’s website. Remarketing, therefore, can be very effective for B2B businesses with smaller target markets and for local businesses.
“It gives you the ability to punch above your weight,” said Serge Salager, CEO of Visualping and AdLinks, in a Business 2 Community webinar.
Small Companies Can Also Retarget
Most retargeting advertisers are huge companies, but smaller businesses can also employ the technique. While the advertising budget for retargeting depends on your website traffic and number of cookies added to visitors’ browsers, the minimum budget is only $100 a month, Salager explained. That’s far less than most smaller businesses now devote to online advertising.
Remarketing enables businesses to overcome the limitations of some innate human behavior: “No one kisses at first date. Website visitors don’t typically purchase on their first visit,” Salager said. Even if consumers don’t click on the banner ads – and most don’t – the ads help people remember the business and search for its name.
Click-through rates for remarketing ads are typically in the range of 0.30 per cent, but even that low rate can produce superb conversion rates and substantial increases in sales. With the cookies, ad services can track individuals and report views, clicks and conversions, including those individuals who converted without clicking on the ads. The ROI of remarketing usually exceeds other types of online display advertising.
Some marketers are concerned that consumers may consider remarketing ads to be creepy since the ads follow the individual around the web. Most customers don’t mind the ads, Salager said. One survey found that 59% of respondents feel neither positive nor negative about remarketing ads; 22% feel positive about them, and only 6% feel negative. On the other hand, 58% noticed the ads – exactly what advertisers want. Customers can stop the ads by deleting the cookie.
Ad Flexibility
Retargeting offers ad flexibility. Geo fencing tells the ad network to target only certain geographical locations. Business can display their ads during certain times of the day, on only specific online publications, or only to consumers who visited their site for minimum time periods, such as 30 or 60 seconds.
Frequency caps limit the number of times ads are displayed to people, typically to a maximum of nine ads per day and 20 per cookie for a campaign. Consumers generally see an ad several times before purchasing, but showing ads too many times may annoy people and squander advertising dollars on uninterested customers.
Businesses can also tag consumers for remarketing with short links on Twitter and emails.
Recommended Practices
When designing ads for retargeting, keep in mind that the goal is to catch attention and convey the brand’s message, Salager said. Use images and backgrounds with bright colors. Faces, as well as babies and cats, attract attention. Keep text short and include the brand name and a call to action. Simplicity and humor are often successful strategies.
Christopher Ratcliff, deputy editor at Econsultancy, recommends these best practices:
Don’t retarget customers who already purchased the product.
Tailor ads to individual customers through segmentation. Target consumers with specific products they viewed.
Don’t hit customers with the same ad over and over for weeks on end. If that customer hasn’t returned to your site after a few reminders, they probably never will. They may begin to perceive your brand negatively.
Provide a clear call-to-action button in the ad, and take the user who clicks on it to a relevant landing page or product page, not just the homepage.
“I’ve read from numerous sources that only 2% of web traffic converts on its first visit,” Ratcliff says. “Retargeting is the tool companies use to reach the other 98%.”
Bottom Line: Done correctly, retargeting converts consumers who have visited your website but left without completing a purchase. Strategies that segment customers and ads designed to attract attention and convey a brand message are most likely to succeed.
William J. Comcowich founded and served as CEO of CyberAlert LLC, the predecessor of Glean.info. He is currently serving as Interim CEO and member of the Board of Directors. Glean.info provides customized media monitoring, media measurement and analytics solutions across all types of traditional and social media.
Indeed, retargeting is a cost-effective marketing tool and it’s mandatory that brands use it in 2016 in order to increase conversion rate.