Remarketing by the Numbers
Carlton Hoyt
We recently cited some newly released findings from the Boston Consulting Group (BCG) stating that “display retargeting from paid search ads can deliver a 40 percent reduction in CPA.” It was met with some hesitation from Mariano GuzmĂĄn of Laboratorios Conda, who stated:
“[…] when I have clicked on a [life science website] what I have experienced is a tremendous amount of retargeting for 1 month that I have not liked at all as an internet user, and I do not feel my clients would as well”
Being me, I like to answer questions with facts as much as possible, so I dug some up. This one’s for you, Mariano!
To directly address Mariano’s concern, I found some studies on people’s opinions on retargeting. A 2012 Pew Research Study found that 68% of people are “not okay with it” due to behavior tracking while 28% are “okay with it” because of more relevant ads and information (4% had no opinion). I’m a little skeptical of the Pew study because they were priming the audience with reasons to “be okay” or “not be okay” with remarketing. In a sense, these people are choosing between behavior tracking + more relevant ads vs. no behavior tracking + less relevant ads. However, when users actually see the ads the ads don’t say to the viewer “by the way, we’re tracking your behavior.” Are some users aware of this? Certainly. Might some think it consciously? On occasion, sure, but nowhere near 100% of the time. However, 100% of the Pew study respondents were aware of it.
A slightly more recent 2013 study commissioned by Androit Digital and performed by Toluna asked the qusestion in a much more neutral manner (see page three of the linked-to study). They found that 30% have a positive impression about a brand for which they see retargeting ads, only 11% have a negative impression, and 59% have a neutral impression.
The Pew study and the Androit Digital study did agree on one thing – remarketing ads get noticed. In both, almost 60% of respondents noticed ads that were related to previous sites visited or products viewed.
Now to the undeniably positive side… The gains a company stands to make from remarketing.
In addition to the 40% reduction in cost per action cited in the aforementioned BCG study, a 2014 report from BCG entitled “Adding Data, Boosting Impact: Improving Engagement and Performance in Digital Advertising” found that retargeting improves overall CPC by 10%.
A 2010 comScore study evaluated the change in branded search queries for different types of digital advertising and found retargeting had provided the largest increase: 1046%.
In a 2011 Wall Street Journal article, Sucharita Mulpuru, an analyst at Forrester Research, stated that retail conversion rates are 3% on PCs and 4% to 5% on tablets. According to the National Retail Federation, 8% of customers will return to make a purchase on their own. Retargeting increases that number more than three-fold, to 26%.
There are many more studies that sing the praises of remarketing, however I wanted to stay away from case studies that investigate only single companies as well as data collected and presented by advertising service providers.
Here are my thoughts on the matter: Do some customers view retargeting unfavorably? Certainly, but that’s the nature of advertising. No matter what form it takes, some people will object to it. Considering that there is nothing ethically wrong with retargeting, we can’t give up on something that is proven to be a highly effective tactic because some people have an objection to it. In the end, it’s our job as marketers to help create success for the organizations we serve.
