Is Retargeting Overrated?

There’s little doubt that ad retargeting is hot right now. Marketers, by all indications, are addicted to the solid success numbers of campaigns.

Yet it’s easy to question whether ad campaigns that simply retarget site visitors who didn’t convert are really all that effective. After all, someone who left a shopping cart might easily have gone back anyway. What’s more, there are clearly times that site retargeters are doing little more than “cookie stuffing,” showing tons of cheap ads in the hopes of getting credit for a conversion they actually had little to do with. There’s a sense that compared to other work of actually generating demand, retargeting is more an extension of site optimization — and can’t even be compared with other marketing activities.

David Smith, CEO of media shop Mediasmith, warned at Digiday Target in Los Angeles last week that “there are many times when it just does not pay.” He added that from a consumer standpoint, the constant come-ons with a product previously viewed is tantamount to “stalking.”

There’s little doubt that some marketers are extremely aggressive in retargeting users. For the past month plus, I’ve been pursued, so far fruitlessly, by men’s retailer Bonobos. I used a Gilt Groupe voucher there but neglected to check out. Eventually, I will. In the meantime, I’ve been bombarded with Bonobos ads, to the point that I have a negative view of the brand. I asked on Twitter whether the marketer measures the possible brand downside of such aggressive tactics. Adam said it was a different group that handled such direct-response tactics. That appears a problem.

Josh McFarland, CEO of TellApart, believes these instances are a combination of bad practices and the immaturity of the medium. Too many clients, for instance, work with more than one provider, all of which have their own frequency caps. Still, there’s no debating its effectiveness with click rates of about .8 percent, far above regular banner ads. But again, Dax Hamman, chief revenue officer with seach retargeter Chango, questioned why those rates shouldn’t be so high considering the hard work has already been done to get the consumer to the site and get a product into a shopping cart.

After all, as investment banker once told me, the entire retargeting industry is built off failure. It’s odd that marketers would fall in love with paying for the opportunity to claw back visitors they lost in the first place. Maybe they should spend more on improving their sites and checkout processes to not lose so many customers in the first place.

For a full discussion of the merits and challenges of ad retargeting, see the video from the Digiday Target session on the topic.

Watch live streaming video from digiday at livestream.com

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