Monday, February 26, 2018

Why your re-targeting is not as effective as could be

According to a latest report by Merkle Inc. advertisers spend 33% of their advertising budget on Retargeting efforts.  That is a huge chunk of the budget!

According to another study, the average Click Through Rate for Display ads is 0.07%, while those for Retargeting is ten times that number i.e. 0.7%, . However, that is still dismal.  Why?  Because of the way most organizations retarget, and obviously, their approach is wrong. 

There are three major types of retargeting processes which companies perform;

  1. Retarget everybody who visited your site.  
  2. Retarget those who did not convert.
  3. Retarget only those who left items in shopping cart.

However, all these approaches still result in very low CTRs and conversions. Of course, they are better than general display ads but still dismal - unless you consider 0.7% as great CTR!

So, what is the problem?

Let’s take the three retargeting scenarios above one by one.

  1. Retarget all your visitors – You are just using spray and pray here.  There is no strategy, no intelligence used.  I have seen this in past, where agencies, on behalf of their clients, use this technique to show how good their targeting is. They do mass display advertising, which produces dismal results and then retarget those who came to the site. Of course you are now going to get better CTR because you are targeting those who have already shown interest.  But the result is still incredibly low.
  2. Retarget those who did not convert – Better than targeting everybody but not much.  You are still targeting those who had no intention to convert. No matter how many times you chase them they just are not interested; you are not selling what they want, and they may have just landed on your site accidentally.  To make matter worse, companies will continue to retarget them to death, and thus tarnishing their brand value. 
  3. Retarget only those who left items in the shopping cart – much better than the first two cases. Now, you are only targeting those who have taken at least some action to show that they were interested, even if they did not convert. However, there are still two problems with this approach;
    1. You don’t know the reason why someone did not convert – most companies will just show the products left in the cart in their retargeting ads.
    2. You are leaving out all those visitors who were willing to convert but did not start the checkout process.

What’s the Solution?

A few years ago, when I started with Retargeting, the approaches I mentioned above were “correct” as they were the only reasonably practical ones to implement.  But now, with new technology available, we don’t need to continue to waste ad impressions and dollars.  Machine Learning can tell us the factors that drive conversion, so we can Retarget in an intelligent manner, using relevant messages sent to visitors who are most likely to convert, and we can avoid chasing (and annoying!) those who have no intention of converting.

Now here comes the sales pitch:

I am working with one such company, DXI. Our technology allows you to do just what I described above. If you are interested, let me know and we will be happy to run a no-obligation pilot for you. Best of all, you don’t need to do make technology or process changes.  Just give us access to your Google Analytics data and we will do the rest.  Visit DXI at


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