Digital Advertising Gets Personal

Right on (Re)Target

While real-time advertising becomes increasingly prevalent, retargeting remains one of the most prominent trends in personalized advertising. Its advocates stress that behavioral retargeting, which involves serving an ad to people after they've visited a particular advertiser's Web site and browsed for items, has the highest conversion rates of any form of ad display by far. "t shows intent, which is the most important element for advertisers," Delug says.

Companies such as ReTargeter specialize in providing clients with the tools they need to reach the most specific demographic possible and advertise to the people most interested in the product—an incredibly helpful approach if the product has a vast potential audience.

Online cookie-treat brand Smiley Cookie, for example, faced challenges as it struggled to appeal to a large target audience that, without retargeting, was difficult to segment and reach effectively. Once Smiley Cookie implemented ReTargeter's approach by retargeting its search, email marketing, pay per click, social, and comparison shopping engine traffic, the company was able to reach its benchmark of five times its current ROI, with 42 retargeted conversions almost immediately after deploying ReTargeter's solution. Within a month, Smiley Cookie was able to double its conversion goal, and triple it a month after that, by continually building its segment pool, developing new creative, and consistently A/B testing its landing page.

"For a product like ours, retargeting has proven to be instrumental in following up with our customers and generating additional sales," Adam Golomb, director of e-commerce at Smiley Cookie, says.

But retargeting isn't only beneficial for companies that cast very wide audience nets. The University of Florida's Hough School of Business, for instance, has used ReTargeter to keep its messages in front of prospective students. In two months, the university was able to serve 3.3 million impressions, receiving a .31 percent click-through rate.

Nathan Lowery, creative director of Lipof Advertising, which handles the University of Florida's marketing, has found retargeting to be an effective way to recapture interest and ultimately drive conversions.

Prior to launching the retargeting campaign, Lipof had focused the lion's share of the university's budget on driving new traffic to the Web site, largely via direct ad buys on premium sites. However, while they were able to successfully drive new traffic to the UF site, getting that traffic to convert proved a challenge. Retargeting brought qualified prospects back to the site, resulting in 59 closed leads over two months.

"[Retargeting] has worked as a great tool to communicate with prospects that we may not have captured the first time they visited our client's Web site. We spend a lot of effort initially pulling prospects to the UF site, and in the past we had no way to get our message in front of them again unless they specifically requested more information," Lowery says.

Knowing More than Your Name

Despite its popularity, retargeting definitely has its share of critics. According to Jeff Zwelling, CEO of advertising and marketing attribution provider Convertro, a vocal minority is responsible for most of the complaints. While some see a high level of real-time personalization and retargeting as an invasion of online privacy, Zwelling doesn't see anything inherently wrong with the practices, and most consumers agree. According to a BizRate study done last year, 85 percent of consumers have a neutral or positive opinion of personalized advertising, of whom 60 percent are neutral and 25 percent like it. Only 15 percent are bothered by the practice.

"Personalization means different things to different people. From the advertisers' perspective, one part of personalization that's becoming important is knowing when to stop advertising. Knowing who's not going to buy is often more powerful because you want to know who not to waste money on. It's a form of personalization to say this person is not going to buy, or has already bought," Zwelling says.

"When people think of personalization, they think of customized ads, which say 'Hi, Jeff,' or something to that extent, which might be inherently creepy. But this is different than personalization," he adds. "Personalization simply means knowing who the customer is. For example, not targeting a person because you know they're not going to buy is a type of personalization as well, and that's not creepy at all."

Barring privacy concerns, critics of retargeting specifically say that more needs to be done about what Delug calls the shoes-that-follow-you-around-the-Internet phenomenon. This typically occurs when a potential customer looks at a product online, considers purchasing it, but ultimately leaves the site before actually completing the sale. Subsequently, an ad for the product he looked at appears on nearly every other Web page he opens, and essentially "follows" the customer anywhere he browses.

"This becomes a problem if the customer is obviously not interested in purchasing this product. Or perhaps they've already purchased it. If either of these scenarios is the case, the advertiser is just wasting money. They're working to mitigate this. It's still a work in progress, and one of the biggest challenges that personalization faces," Delug says.

"Advertisers have to set reasonable frequency caps, and they have to do suppression in real time because it's completely useless to show an ad for a product that someone has already purchased. This is why real-time bidding and retargeting need to work hand in hand to deliver personalization. Because you've got to know quickly, in real time, that this person has already made a certain purchase, and then quickly use retargeting to show them something else—a complementary product, perhaps. This is the future of personalized advertising," explains Charles Nicholls, founder and chief strategy officer at SeeWhy.

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