Explainer: Retargeting

What is It: About 98 percent of people leave websites without converting into consumers. Behavior-based ad retargeting provides an ad serving platform with real-time data that lets an advertiser show an ad to people who visited their site.

Why It Matters: Retargeting campaigns typically convert at a high rate. Audience segments that don’t convert shouldn’t be lost, they should become the focus of an adaptive strategy. A teenaged boy on a video gaming site looking for information on a new release is already engaged with the brand and is a ripe target for an ad that lures him to a purchase based on that explicit behavior. A retargeted ad might include offering discounts, freebies or social interactions around that consumer’s perceived interest. Retargeted ads follow potential consumers throughout the Internet, reminding them of a brand’s products and content, while offering opportunities to view special offers or receive relevant information.

Who’s Doing It: Most companies that use display advertising use some form of behavioral retargeting. It might be as subtle as a banner ad offering a 50 percent off coupon for subscribing right now appearing on a magazine site that a consumer is browsing, or a 90s style full-page takeover screaming, “stop- do you really want to leave?” Although retargeting has become an increasingly popular feature of demand-side platforms (DSPs), which serve ads and often work with multiple ad exchanges, some behavioral and search retargeting companies, like Magnetic and Buysight, work with multiple DSPs to provide clients with access to users who have not visited a client’s website, but searched for a specific keyword.

Assessment: Retargeting definitely works, particularly for ecommerce sites. Users looking for information on a brand have already been seduced to the site, so they are the best focal point for brand messages. Retargeting works better than simply offering a one-size-fits-all display that reiterates identical messages to potential consumers, brand enthusiasts and casual browsers. There are two problems with it, however. The method is dependent on visitors to an advertiser’s site, making the sample comparatively small. Other methods like lookalike targeting can expand the pool, although that might lower effectiveness. The other wild card is pending privacy legislation, which could mandate increased disclosure and opt-out options for consumers who are retargeted. While it lasts in its current form, retargeting is a no-brainer to maximize ROI from real-time data.