Behavioral marketing has become a staple in today's online media plans, with spending estimated to reach $1.2 billion this year, up 30 percent from 2005 and exceeding the 24.7 percent growth rate of overall online advertising (eMarketer). According to a 2005 iMedia/Ponemon Institute study, behaviorally targeted advertising is expected to comprise nearly 21 percent of all online media purchases in 2006-- more than double that in 2005. As marketers embrace the concept, they are beginning to explore creative strategies within the behavioral marketing discipline. One approach that is winning a lot of fans is retargeting.
How does retargeting work?
Retargeting works by anonymously observing consumers' behaviors while they are visiting your website. Targeted messages are delivered to those consumers after they leave-- based on whether or not they completed a desired action. While behavioral marketing in general uses online actions to identify, reach and convert good prospects, retargeting focuses on consumers who have actually been to your site.
Online consumers do homework before making a purchase. Even if they are interested in your products, they will likely take some time to think about the purchase or shop around before closing the deal. With a retargeting strategy, you can expose that consumer to specific ads as they surf and shop outside the walls of your site. For products with a longer purchase cycle, retargeting leverages sequential advertising to reinforce your message as the consumer goes through the research and consideration process prior to completing a purchase.
By combining retargeting with traffic-driving solutions, such as search and web marketing, you can build a large population of consumers to retarget. In fact, retargeting is the perfect complement to a search campaign as it enables you to convert interested consumers who specifically searched for your products but did not immediately complete your desired action.
Ad networks make retargeting especially potent, because they enable you to retarget your site visitors as they visit hundreds of sites, whether they are simply surfing or actively researching before making a purchase. By reaching them with a custom message based on specific site interaction -- such as cart abandonment -- you can convince that consumer to come back and complete your desired action.
The value of retargeting is high and campaigns are even more cost effective because they require fewer impressions to produce significantly higher response rates. A recent Advertising.com campaign (promoting subscriptions for a leading newspaper) generated a retargeting conversion rate nearly 10 times that of a run-of-network campaign-- and it required 1/20th the total impressions to achieve nearly the same volume of subscriptions. For another Advertising.com retargeting campaign (driving configurations of a new car), retargeting resulted in 12 times the number of conversions and 23 times the number of information requests as demographic targeting.
Retargeting can effectively optimize value across all your marketing efforts. You paid a lot for that TV spot or online ad that brought the consumer to your door; retargeting helps ensure those dollars turn into revenue.
Making the most of it
Retargeting can be leveraged at virtually every phase of the consumer lifecycle, from building awareness to increasing favorability, to driving purchases and customer loyalty.
Perhaps the greatest benefit of retargeting is its ability to build and retain customer interest during the consideration phase. Online consumers rarely click and make an immediate purchase. Retargeting is the most effective way to prevent your offer from losing steam during this consideration phase.
With that in mind, it's important to understand how long the consideration process is for your product or service. Higher priced, durable items tend to have a longer purchase cycle. Therefore, your message must do two things: 1) reach prospective consumers as quickly as possible before they buy from a competitor, and 2) target them repeatedly throughout the consideration phase. If it typically takes three weeks for a consumer to buy high-end stereo speakers, don't stop serving ads after one day.
In addition, you should customize your creatives based on the consumer's specific activities on your site: where the online session was abandoned or which product they explored.
Finally, retargeting is ideally executed across a network that has the size and diversity of websites to reach your consumer virtually anywhere. The broader the reach, the faster you'll hit your target again-- especially critical if your product or service has a short window of opportunity. That being said, even on the largest networks, you'll need to be persistent to ensure your message finds its way back to your target consumer.
In the universe of behavioral marketing strategies, retargeting is a great way to cost efficiently capitalize on each and every site visitor. Your search marketing, banner ads and offline efforts will do some of the work, while retargeting will finish the job-- converting browsers into buyers, buyers into repeat buyers and repeat buyers into life-long, loyal customers.