Have you ever done a search for a product or service and then seen ads for companies that deliver that product or service later on websites that have nothing to do with that product or service? For example, you might have done a search for lenders that handle commercial property loans and mezzanine financing. You clicked on the websites of a few of those lenders. Then later — hours, days or even weeks later — you did a totally unrelated search for hotels in Dallas for an upcoming conference and you saw an ad for a lender you perused earlier offering mezzanine financing on the hotel aggregator’s website. At first, you thought “coincidence.” Then you saw a similar ad for another lender when you searched for an upscale restaurant to dine at with your spouse and clicked on the Opentable.com site to make a reservation. You thought, “Strange.” Then you saw yet another ad for a commercial real estate lender when you checked accuweather.com for the weather forecast for your golf outing on Sunday. At that point, you felt like “Big Brother was watching.” How could such diverse and unrelated websites know you were looking for a commercial real estate lender? How could those lenders know to advertise on sites that you frequent? The answer is retargeting.
Behavioral retargeting (also known as behavioral remarketing, or simply, remarketing or retargeting) is a form of online targeted advertising in which online advertising is targeted to consumers based on their previous Internet actions, in situations where these actions did not result in a sale or conversion. This type of online advertising has been around for a few years and is highly effective and yet not widely used. That makes it a great tool for businesses that want to stand out in the crowd.
How does Retargeting Work?
When it comes to retargeting, it is all about cookies; but not the kind you bake and eat. For retargeting to work, a small, unobtrusive piece of code is placed on the advertiser’s own website. Sometimes referred to as a pixel, the code is unnoticeable to site visitors and won’t affect the site’s performance. This code creates a list of new people that have visited the website and places anonymous retargeting “cookies” in their browser. (Cookies are arbitrary pieces of data, usually chosen by the web server, and stored on the site visitor’s computer by the browser.) Later, when ‘cookied’ visitors browse the Web, the cookie will let the retargeting provider know when to serve up ads – based on the list. The list allows retargeting vendors, such as AdRoll, to display retargeting ads to potential customers as they visit other sites. Remarketing ads are served only to people who have previously visited the advertiser’s site but haven’t ‘purchased’. If a visitor deletes their cookies from their computer, then the retargeting doesn’t work. But most people do not delete their cookies. Those cookies continue to work for a long time.
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Why is retargeting needed if the individual is already familiar with the company or brand? That’s because a potential client’s journey to becoming a client is generally not linear. People do a search and visit a company’s website… then leave. A month later, they might then discover that company’s latest blog post. They might then decide to download the company’s eBook. A few days after that, they might receive the company’s eNewsletter. Maybe a week later, they might decide to get in touch with a salesperson, and it could possibly take several more weeks of meetings and discussions to come to a decision to do business. There are a lot of “might”, “maybe” and “possibly” in that sales funnel. It is an arbitrary process and depends a great deal on chance for that potential customer to finally do business with a particular vendor.
What retargeting does is to keep the company top-of-mind with that visitor in order to tighten and expedite the sales journey. It is effective because it focuses advertising spend on people who are already familiar with the company’s brand and have recently demonstrated an interest. Isn’t that ideally the potential customers every company would want to target most? That’s why companies that use retargeting see a higher ROI than from most other digital channels. Indeed, while only 2% of shoppers convert on the first visit to an online store, retargeting brings up to 60% of the remaining 98%. Retargeting works by keeping track of people who visit a company’s site and displays retargeting ads to them as they visit other sites online. In that way, retargeting converts window-shoppers into buyers. It is the digital equivalent of Bloomingdales or Barneys on Fifth Avenue in Manhattan being able to advertise to the people who browse the merchandise in their stores, except that it can be very specific. More about that later.
While retargeting is a fairly recent type of digital advertising, it is growing in popularity due to its effectiveness. Today, 90% of all marketers report that remarketing ads are as good as or better than email marketing and search ads as a marketing strategy. A survey of 1000 marketers conducted by AdRoll a year ago showed that 71% are spending between 10% and 50% of their digital marketing budget on retargarted ads. That’s because they know that retargeted customers are three times more likely to click on a retargeted ad (with a strong call to action) than people who have never interacted with that brand before, and retargeted customers are four times more likely to convert than new customers.
Retargeting Best Practices
While retargeting is a powerful branding and conversion optimization tool, it should not be used alone. It works best if it’s part of a larger digital strategy such as inbound and outbound marketing or demand generation. Why? Strategies involving content marketing (like eNewsletters, blogs and eblasts), AdWords (pay-per-click campaigns), and targeted display ads are great for driving traffic, but they don’t help optimize conversion. Conversely, retargeting helps increase conversions, but it doesn’t drive people to a company’s website. The best chance of success is using one or more tools to drive traffic and then use retargeting to get the most out of that traffic.
Also, retargeting is most effective when the company segments visitors (eg, people who looked at mezzanine financing vs. others who looked at subordinated debt, and then developed and delivered targeted ads for that particular product). Tailoring the retargeting ads shown to each group connects with what interested that visitor in the first place. Also, it is important not to retarget them at all if they converted, meaning they are already doing business with the advertiser.
In terms of the creativity of the ad, the best performing retargeting creative has a clear call-to-action and promotes an offer. One way that smart companies are using retargeting is by using videos and content on YouTube, LinkedIn, Facebook and other websites to drive traffic to the website, and then using remarketing ads to bring those audiences back later with an offer.
Case in point. One online jewelry store advertised engagement rings on Facebook. For all their website visitors who did not convert, which was the vast majority, they then did retargeting ads which encouraged visitors to return to the website to register for a 5 karat diamond engagement ring giveaway. Those who registered were then further nurtured with a drip email campaign showcasing engagement rings that were on sale. The campaign increased sales of engagement rings exponentially.
Timing is another factor. Different products warrant different retargeting time frames. For example, people shopping for a home mortgage or a home might be retargeted immediately and for a few months, whereas a real estate investor looking to purchase an office building can be retargeted over a longer span of time with related products.
Retargeted advertising is a great way for companies to target warm leads and deliver a well-crafted elevator pitch online. When ad budgets are tight (and when aren’t they?), companies need to use every marketing dollar wisely. Advertising to an audience that already showed an interest is, as they say, a no-brainer and probably one of the best ways to spend ad dollars. It allows companies to deliver tailored messages to optimal audiences with pinpoint accuracy. And given that 46% of online marketers think it is the most underutilized form of online advertising today, it means that companies that employ retargeting will be able to stand out in the crowd. That definitely hits the bulls-eye.
Quote of the Week
“It’s much easier to double your business by doubling your conversion rate than by doubling your traffic.” Jeff Eisenberg
© 2015, Written by Keren Peters-Atkinson, CMO, Madison Commercial Real Estate Services. All rights reserved.