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The modern consumer takes full advantage of the plentiful, and often distracting, amount of online shopping options. More often than not, consumers browse a retailer’s site, add some products to their shopping cart, and eventually leave the site before the most important step – clicking “Purchase.”
In fact, more than 95 percent of visitors who browse a retailer’s site do not complete a transaction on their visit. Their attention is pulled elsewhere, to another corner of the Internet (often a competitor’s site), and the advertiser’s acquisition efforts are wasted.
To counter these casual shopping tendencies, marketers have developed online advertising strategies to recapture and re-engage consumers who expressed interest in their products, but left the site prior to completing a transaction. A prominent technique in the display banner advertising world is retargeting — a solution that has been around since the early days of e-commerce but has recently reached new levels of sophistication and success.
Retargeting allows retailers to find previous website visitors across the internet and display relevant banners to drive those site visitors back to the retailer’s website to complete a transaction. For example, if a consumer looked at a baby stroller on the retailer’s web site, the consumer might see the same product in a banner advertisement while reading an article in their favorite online publication. The goal is to reengage the consumer that has left the retailer’s e-commerce site to click back to the retailer’s web site to complete a transaction.
What started as a fairly inert tactic to recapture visitors has evolved into a dynamic marketing solution, now offering scalability, interactivity and detailed levels of personalization which drive greater ROI than ever before.
While early forms of retargeting (then referred to as remarketing) offered only slightly improved returns compared to other branding techniques, the modern version of personalized retargeting drives tremendous incremental revenue for retailer advertisers and offers more relevant advertisements for publishers to display to their site visitors.
The numbers are impressive: According to a recent study by Criteo, retargeted consumers are nearly 70 percent more likely to complete a purchase as compared to non-retargeted consumers. What’s more, retargeted customers spend, on average, 50 percent more than those served with non-retargeted banner ads.
Additionally, Criteo research shows that personalized retargeted ads perform 6X better than generic banners and 4X better than basic retargeted ads. And, under Criteo’s pay-for-performance (PPC) model, advertisers only pay for the actual, certifiable clicks that steer potential customers directly back to the products they were interested in earlier. Online advertisers are reaping serious benefits from personalized PPC retargeting, resulting in the lowest risk and highest potential of any retargeting model. The statistics are encouraging to advertisers.
Online consumers also benefit from dynamic personalized retargeting. A recent study conducted by PreferenceCentral found that a majority of online consumers prefer personalized ads, which are tailored to their individual preferences, in exchange for access to free quality content. Modern consumers want quality online content, including relevant ads that ensure continued free access to their favorite online publications.
Customer acquisition techniques such as search engine marketing (SEM) and search engine optimization (SEO) still command the majority of total online ad spend. However advertisers, publishers and the media have taken notice as retargeting banner advertising evolves from a niche solution to a critical part of advertisers’ performance marketing strategy. Fortunately for retail and e-commerce advertisers, the future of online advertising is here with retargeting, which allows them to drive tremendous ROI and extend the effectiveness of their online ad spend.
