Marketers have been trying (and succeeding) to up-sell consumers for years-- it's hardly an idea that began with the internet. The era of online media, though, has brought a unique twist on this old concept: instead of trying to get consumers who made purchases in the past to buy again, what about getting consumers who didn't convert to buy for the first time? Marketers are often paying to bring web users to their websites -- through paid search listings or other advertising -- and bringing back those who don't convert could be a lucrative way to recoup an otherwise loss.
This idea has led to the growth of retargeting (sometimes also referred to as "behavioral retargeting" or "behavioral search retargeting"). There are a few different models, but the basic idea is that by visiting a website, a consumer is demonstrating that s/he is interested in that website's products or services. Retargeting uses a website visit -- or a search ad that led a web user to a website -- as a targetable behavior. This behavior can then be used to serve ads to the web user after s/he leaves the advertiser's website.
A number of online marketing firms have started offering retargeting to their clients. Some retargeting is strictly based on the previous website visit (as in the case of SpecificMEDIA); some retargeting combines past website visits with other web browsing information (EchoTarget, or Advertising.com); and some involves using the search keywords that brought the user to the website to begin with (Revenue Science, Did-it Search Marketing). Some organizations, such as AlmondNet, have also been offering ad targeting based on keyword searches, if not the subsequent website visits (disclosure: AlmondNet is a client of Chapell & Associates). Although the data used to segment users and target ads may vary somewhat, the basic idea remains the same-- to target non-converting users across a network of websites until they return.
SpecificMEDIA even provides a spiffy animated explanation of how this whole process works. In their example, a consumer goes to an online shoe retailer, only to leave the site without making a purchase. The pitch is that by using retargeting, the shoe retailer can catch the consumer (when he's visiting a news site, perhaps) before he makes a purchase at another online retailer. "By visiting a site," Tim Vanderhook, CEO of SpecificMEDIA told me, "a consumer has let that site know they have a need. Retargeting helps an advertiser convince the consumer that their product or service fulfills that need."
Different data, still behavioral targeting
Targeting users based on their online behaviors isn't unique to retargeting-- in fact, this is the underlying concept for all of behavioral targeting (BT). And although there a number of variations, retargeting would appear to follow the same basic structure: data is collected about consumers, which is then used to serve them more relevant advertising. The real difference between retargeting and other forms of BT has more to do with how the information is collected rather than with what is done with it.
Ad networks have often positioned BT as a way for advertisers to leverage the information web publishers have about their audiences-- what pages they've visited, what products they've looked at, and so on. So the relationship is one of publishers providing data to advertisers. With retargeting, this relationship is reversed. Advertisers are now supplying information to publishers, in order that the consumers who have visited the advertiser's website can be targeted while browsing the publisher sites.
Sounds promising, right? And for advertisers looking to make the most of the money they pay for search ad clicks (as well as other ways of driving traffic), retargeting may seem a promising option.
Possible speed bumps?
Retargeting bears functional similarity to many other forms of behavioral targeting-- and as a result is likely to confront some of the same challenges. Much of the current excitement around retargeting centers on the benefits for advertisers-- but there are issues that could potentially slow down the growth of retargeting. As things stand, I think there are two possible speed bumps worth mentioning:
1) Frequency Capping: Most descriptions of retargeting emphasize the idea of targeting non-converting web visitors repeatedly over a short period of time. The idea seems to be that the "consideration phase" may be relatively short, and advertisers want to remind visitors about available products as much as possible. Some advocates of retargeting have actually advocated not using any at all.
Perhaps it's just me, but I tend to be very uncomfortable with online advertising techniques that don't embrace frequency capping. As most of us know by now, "too many ads can make baby go blind." In other words, even over a short period of time, consumers can still end up tuning out ads if they start to feel inundated.
2) Consumer Opt-Out: Since retargeting is functionally similar to other forms of behavioral targeting, many of the same privacy principles should apply. Many websites that serve behaviorally targeted ads (via third party networks) disclose their data collection and ad serving practices in their privacy policies. The ad networks, moreover, often provide a way for consumers to opt-out of the data collection and ad targeting-- such as that advocated and provided by the NAI.
As more companies -- who may or may not have been previously working in the BT space -- begin to offer retargeting services, I hope we'll see these organizations embrace some fair information practices, including a robust opt-out standard. For the moment, there are retargeting services that don't have an opt-out mechanism, and that's a bit concerning. While some of these organizations may question the value of providing a tool only a small minority of users will use, privacy is often a matter of catering to the zealous.
Moreover, there seem clear long-term benefits in providing this service. Simply allowing consumers to opt-out of retargeting can help to improve the chances of consumer acceptance. The idea of banners that "follow consumers around the web" and keep presenting them with an ad for a site they recently visited is just the sort of behavior that makes some consumers a little skittish. Making it optional helps to allay those fears-- whether they use the option or not.
A few questions to ask
With these issues in mind, I think advertisers who are looking to use retargeting (in any form) in their marketing campaigns should be asking a few questions. Specifically, does the retargeting provider:
- Adequately disclose the data collection and retargeting to website visitors?
- Provide to these visitors an effective way of opting out of the retargeting?
- Limit the overall number of ad impressions based on frequency capping?
As more companies -- both from the search marketing and ad network space -- begin offering retargeting services, these issues will only become more pertinent. We've been shown the rewards that retargeting promises. We might also want to take a look at any possible risks.
Isaac Scarborough is manager of market intelligence at Chapell Associates. Read full bio.