Retargeting campaigns are found in every online marketers toolbox and it’s no wonder why. Using stored cookies, retargeting allows marketers to target an audience that has previously visited their site or expressed interest in their product. This type of personalized advertising makes marketers happy. Why? Simply because it drives conversions and generates positive ROI. 9.9 out of 10 marketers are using some kind of retargeting. While retargeting is not a new marketing tactic, it needs to be executed correctly in order to be successful. We have found that many retargeting ad budgets are wasted due to critical oversights in campaign strategies. It’s time to get a leg up by being smarter and delivering more sophisticated retargeting campaigns.
The question is how? The first step to answering this question is to define and understand the mistakes marketers make when implementing their retargeting campaigns.
Why Retargeting Campaigns Fail
Skimping on CPM
Most retargeting campaign rates are based on CPM (cost per thousand impressions) or CPC (cost-per-click). These common metrics used by solution providers refer to ads bought on the basis of impressions or clicks on the ad. While a cheaper CPM or CPC rates may be enticing, we see over and over again that retargeting campaigns do not hit the mark when it comes to reaching valuable prospects. In our analysis of retargeting campaigns, we have found that over 70% of campaigns do not attain the necessary reach required for their retargeting ads to be viewed against audiences with highest conversion potential. Why is this the case? It all comes down to real-time bidding.
Losing the Bidding War
Retargeting uses real-time ad-inventory. In the time it takes a webpage to load, a real-time auction happens behind the scenes. Whether through Facebook, mobile, or banner ads, these inventories are bid on by millions of advertisers at any given time. In this auction landscape, advertisers are all bidding at different rates for each impression and a low CPM will not win against higher bidders who are targeting the same user. While you will occasionally win a placement, most likely you will win at less opportune times or for lower priority potential customers. The most effective way to combat this problem is a more aggressive CPM.
Targeting Useless Prospective Customers
Winning the auction isn’t everything. It is essential to make sure that you are bidding on the right consumer. Of course one cannot assume that all users who have searched for your product are prospective lifetime buyers. Take for example a husband shopping for handbag for his wife’s birthday. While it may beneficial to retarget this user for the next few weeks, it is important to distinguish this man’s life span as short and purchase driven. Spamming this user with “Tory Burch” ads for the next three years, is not only a waste of advertising budget, but also has the ability to turn a prospective customer off from your product.
How To Optimize Retargeting Campaigns
So how do you avoid these common retargeting mistakes and take your retargeting campaign to a more advanced and sophisticated level? It all comes down to implementing retargeting with effective user-segmentation and data modeling. Using these strategies, your site and conversion data is enhanced through audience data overlays and is used to identify patterns in user behavior, profiles and demographics. With these optimized audience segments and a clearly identified retargeting cookie pool, your campaign can deliver highly sophisticated buys and messaging.
The next step to an optimized campaign is to use this user data to make intelligent messaging decisions. Let’s say you have an identified retargeting audience segment that has shown a conversion latency where a common behavior is a purchase in the range of 30-40 days. Wouldn’t it make sense to lay low until a few days prior this period starts, and begin your messaging when the user of this segment is ready to make a purchase? With a refined audience grouping approach, you are able to message the right audience segments at the right time and ultimately drive conversions.
Retargeting is an essential and practical tool in digital marketing– and everyone knows it. So how do you get ahead of the game? Focus on vendors with the necessary technology to convert audience behavior into sophisticated user segmentation strategies. This type of data-driven approach will go far beyond basic retargeting and deliver a highly optimized campaign destined to drive conversions.