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This article was published in the Sunday Business Post on the 22nd of February 2015
Steve Dempsey: Only a tiny fraction of a website’s users convert to it, but retargeting can help to zero in on the rest of them
Retargeting is one of the smarter ways in which online advertisers can remind consumers that they exist. It can raise conversion rates, whether you’re trying to drive sales or email sign-ups; it can drive brand awareness; it can give brands a sense of online ubiquity; and it can turn online tyre-kickers into customers.
Typically, only 2 per cent of a website’s visitors convert. Retargeting can help bring back the other 98 per cent. Here’s how it works: when someone checks out a site that’s using retargeting, a cookie is stored on their browser. That cookie is then used to let the retargeting provider know when to serve ads on subsequent sites, pushing targeting messages only to people who have previously visited the site that the cookie came from.
Marin Software, a digital ad management platform, recently surveyed more than 200 online marketers to find out what they make of retargeting. The resulting report, snappily entitled “The Performance Marketer’s Retargeting Guide”, gives an interesting snapshot of advertisers’ attitudes to the practice.
Marin found that 88 per cent of those they surveyed were using some form of retargeting to re-engage users that they had failed to convert in their initial visit. However, they also found that retargeting budgets were relatively small. Some 51 per cent of marketers said they spent 10 per cent or less of their monthly marketing budget on retargeting. This money is often carved out of existing marketing spend.
But that may well change. A total of 62 per cent of respondents said they would be increasing their spend in the coming year, with emerging channels like mobile and video retargeting regularly cited. Only 3 per cent of respondents said they’d be spending less on retargeting in the next 12 months.
Display ads accounted for 81 per cent of all retargeting ads according to Marin’s research. Search ranked a close second, at 77 per cent. Social accounted for 48 per cent and mobile brought up the rear, clocking up 32 per cent.
According to Marin, Google has used its position in the market to drive retargeting adoption across its display and search properties. But social channels are fighting back. Marin points to the premium, high-engagement, cross-device inventory that’s become increasingly available on Facebook and Twitter.
AdRoll, a retargeting firm with offices in Dublin, recently published its own research based on an analysis campaign data from nearly 4,000 European advertisers. It found that 88 per cent of European marketers thought retargeting outperformed search. They also earmarked mobile retargeting as the next big thing.
According to AdRoll, 56 per cent of European marketers are retargeting on mobile. This, they said, was on the low side. The reasons marketers gave for not embracing mobile retargeting included brands’ lack of apps, mobile sites and, above all, a poor impression of mobile advertising.
But clearly some marketers are missing a trick. Adroll recently found that marketers which added options for mobile ad sizes to Facebook retargeting campaigns saw an average of 29 per cent more clicks, 15 per cent more conversions and 4 per cent more impressions.
So what do Irish marketers think of retargeting? We’re a little behind the curve, according to Shane Murphy, AdRoll’s EMEA marketing director.
“Here in Ireland, we generally lag behind when it comes to adopting online tactics compared to our counterparts in Britain and the US,” he said. “Only 57 per cent of Irish companies have invested in online and only 6 per cent of Irish sales are made online. Irish firms need to increase their investment in this area to keep up with a world where the internet is tearing down borders.
“IAB Ireland valued digital advertising spend at €130 million for the first half of 2014, with mobile ad-spend representing 29 per cent of total digital spend, at €37 million. Retargeting is one of the effective tactics businesses can deploy to see a return on that investment.
What tips and tricks can Murphy offer brands that want to get going with retargeting? “Frequency capping is an important part of any campaign,” he said.
“We recommend that all brands implement a frequency cap which limits the number of times any individual consumer sees your ad. Similarly, duration limits are an important way to ensure your ad conversion rate remains high. The beauty of retargeting is that your campaigns start to target customers when they are at their most likely to convert. Finally, compelling creative and copy are absolutely critical to drive conversions.”
So, while retargeting is an excellent online option, it’s worth remembering that advertising fundamentals still apply. Behind all the digital terminology and technological jiggery-pokery, it’s still the creative execution that has to do the heavy lifting and capture the imagination and interest of the consumer.
