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.
