Consumers and the Re-targeted Ad

 

Have you ever abandoned a shopping cart online but ads for that site began to appear on other websites as you surfed the web? For example, you visited a retailer like Forever 21, and the same shoes you clicked on showed up on your Facebook feed a day later. This technique is called retargeting marketing, an advertising technique purposed to get consumers to convert on purchases. Companies implement a tracking pixel or a list of codes into their sites to identify and mark the users who download certain pages. This stores a cookie in consumers’ browsers, which communicates to advertising systems on Facebook and Google. These platforms then display ads that firms bid for to offer relevant products to returning consumers, redisplay items consumers previously viewed, and offer special discounts and sales to returning costumers.

Consumers need to visit a site 5-8 times before making a purchase according to the American Marketing Association. In addition, about 75% of consumers who add a product to a cart will not purchase it. Through retargeted marketing, firms can redraw consumers’ attention and change their interest to conversion. 26% of cart abandoners who are retargeted with display ads will convert on purchases according to E-Marketer,.

However, effective retargeting requires more than just redisplaying product banners after viewers click on a product. Segmentation helps marketers build a lists of offers and information unique and relevant to specific consumers. For example, in 2014, Luxury watch retailer, Watchfinder identified that less than 1% of customers converted on first site visits.  As a result, the company partnered with Google Analytics to create a highly focused list of 20 visitors defined by location, language, on-site behavior, and internet service providers. Watchfinder then created tailored adds for each segment, which in six months increased average order value by 13%.

The success of firms who use retargeted marketing is clear, but have consumers caught on to retargeting? In a 2013 survey of consumers’ online shopping behaviors during the holiday season conducted by Marketing Land, 75% of consumers said they noticed being retargeted. Security and privacy become magnified issues as many consumers are uncomfortable being tracked from site to site as they browse the web. In a Familiarity, Frequency and Fine Lines report conducted across 1,600 people aged 20 to 60 in the UK in 2014, 55% of put off buying, and 53% were irritated after seeing a repeated ad; while only 10% made a purchase after seeing a repeated add. In addition, the ethics of consumer behavior come into play as companies lure consumers to convert through cunning discounts and low-stock warnings. However, more and more people crave connection and convenience, blurring the line between desire for personalization and trust, privacy, and protection of vulnerable groups.

In my report, I aim to further understand consumer perceptions and opinions of retargeting in e-commerce where consumer privacy and data protection remain contentious issues. Have you noticed retargeting? Were you ever scared by an advertisement? Do you think it is an effective and justified advertising tactic?

By: Shannon Skibicki

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