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Retargeting – When is it effective? |
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Written by Sachin Devand
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Monday, 18 May 2009 |
Definition
What is the best way of targeting the users on the web? There are theories after theories about what the best way is and how other theories are incorrect. I would say - target the users who have the maximum propensity to buy your product and you are in business. The question is how do you find such users? One low hanging fruit to targeting users who might be interested in your product is to retarget them. This simply means that you target these users based on the fact that you have ‘seen’ them somewhere before and you can infer something about them based on where and when you saw them before. For example, if a user was ‘seen’ on a business related site in the morning they might be interested in business related products and offerings. Another example could be that a user was ‘seen’ on Apple’s online store configuring a MacBook, this user did not eventually complete the transaction and exited the site. Yet another example could be of a user who partially completed a credit card application and then exited the site. If you have ‘seen’ these users before, you can target them again on the web and you have a pool of users which are more likely to buy something from you then the rest of the users online. Anecdotally speaking, retargeting comprises of 80% of performance for most campaigns.
How is it done?
So now that we agree re-targeting is crucial, let’s see how it is done. The most common way it is accomplished is using cookies. When you see a user whom you want to retarget, all you do is drop a cookie on the user’s browser. This cookie has information that you would like to reference later. This information consist of the category of the page the user was on, the type of laptop the user was trying to configure or what stage of credit card application the user was at before quitting. When the user is ‘seen’ again on the advertiser’s network, this information can be read and appropriate offers can be shown.
When is it effective?
Now that we know how retargeting works, we can conclude that it should works for all campaigns and that we should do it all the time. Only if life was that simple! Here is the twist in the story – yes targeting a user about whom you have some additional information is critical for the success of a campaign, the type of site the user is on is equally important. The same user might behave differently when they are on different site. Your ad might not engage them as well on one site as it might on the other. Here is an analogy; suppose you are cruising down the freeway at 70 mph and you go past a billboard. A couple of miles down the road you hit backup traffic because of an accident. Now you are stuck in a bumper-to-bumper stop-and-go traffic. You go past another billboard. Suppose both the billboards were showing the same ad and it is an ad of something you would really buy, which one of the two billboards will be able to successfully get your attention? Obviously, the second one. The same argument holds in the online world – the same user might engage (click or convert) on your ad when they are on a longer well structured article than when they are on a photo sharing site, for example.
What this means is that you cannot blindly retarget users because you know something more about them. You also need to be sure that such users will engage with your ad on the sites where you are showing the ads. Remember retargeting is more expensive, you might be better off without retargeting on sites where retargeting might not be effective.
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Last Updated ( Monday, 18 May 2009 )
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Written by Sachin Devand
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Tuesday, 08 April 2008 |
What is ROS (Run of Site) or RON (Run of Network)? Definition Run of site (ROS) is a phrase used to define inventory (page loads) that publishers are unable to forecast ahead of time. As a result of this they don’t have advertiser spending lined up. This causes them to dump such inventory at dirt cheap prices. Another form of ROS inventory is inventory coming from some sections of publisher site which cannot be sold as premium inventory. For a newspaper site, such sections could include, job postings, obituaries, personals etc. Such sections have very low value for an advertiser and are thus given up as ROS inventory. A lot of ad networks buy ROS inventory from publishers and try to make a profit by either reselling it or running direct response or branding campaigns on them. Such a collection of ROS inventory on an ad network is called Run of network (RON). Typically ROS/RON inventory is prices quite cheap compared to premium inventory. As a result it is expected that it will perform poorly compared to premium inventory. Why this happens? Pages that do not have good content cannot be sold as premium inventory. There is nothing much one can do about such pages. They will end up as ROS inventory. A bigger problem for the publisher or an ad network is when they have a surplus of impressions for a given month and no advertisers lined up to serve ads. Such a case can happen either when a publisher does not make accurate forecasting about their future traffic or there is a spike in the traffic coming to the publisher. As a result the sales team sells only what was forecasted. If the publisher receives more traffic than forecasted then it will end up wasting those extra impressions. Since media buys are done weeks if not months ahead of time, any changes in inventory cannot be sold immediately. A balance is met when another ad network or advertiser steps in and offers to buy such inventory. The catch is that the advertiser will not pay premium price for such inventory. They will just buy it at ROS price. This lets publishers dump their surplus inventory at whatever price they can get and advertisers get a steal deal. The only catch for advertisers is that they can potentially end up with a mixture of ROS surplus inventory and real ROS inventory. There is a big difference in the prices of premium and ROS inventory. For example, the CPM price of premium inventory might be $10.00 while ROS might be as low as $1.00. This is the reason why forecasting is one crucial aspect of publishers’ ad operations.
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Last Updated ( Tuesday, 08 April 2008 )
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