Top Considerations for Retargeting by Channel

Retargeting has become a staple ingredient to most marketing strategies today. When evaluating your choices of retargeting across channels, be sure to keep these considerations in mind.

Top Considerations for Retargeting by Channel

When retargeting first hit the scene, its effectiveness was undeniable. This audience of site visitors, who browse your site and leave without transacting, has an extremely high likelihood of transacting, if gently reminded of the product they browsed. Today’s retargeting technology allows for advertisers to retarget to consumers across multiple channels: online, email and direct mail. Each channel offers distinct advantages and disadvantages. How do they stack up against each other and which is right for your business?

Online:  Digital retargeting was our first introduction to retargeting. It provided advertisers the ability to put a relevant display ad in front of a consumer regardless of where they were browsing online. The formats of the ads were varied and evolving (static, dynamic, text, images, sound and video) and this, along with the immediacy and relevancy of the outreach, led to strong performance. As the usage of this highly effective solution grew, so did the challenges.

• More and more online real estate was used for these display ads and they began to lose their effectiveness.
• In addition to the fact that 50% of display ads fall below the fold (the consumer has to scroll in order to see the ad), many consumers became aware of this practice and have actually conditioned themselves to tune them out.
• The flexibility of this program (turn it on or off upon request) also became a challenge as pausing a program, even for just a day, causes the algorithm to reset. This “reset” will cause an initial negative impact to performance when the program is turned back on.
• Budgeting has also become challenging as advertisers are competing for the attention of the same consumers and the bidding for that same ad space.

Email: Email is an integral part of daily life. Nearly 76% of US adults use email, each having 1.75 email addresses on average per person, making it a broad reaching channel for marketing.  Advertisers utilize a variety of techniques to grow their email database and create this robust source for retargeting. Once a consumer has provided their email address, the cost to then market through email is zero. Emails are also timely and relevant as they are able to be personalized by customer and customer segment. Similar to how retargeting via display proved effective but eventually led to a desensitization of consumers, email retargeting has the same challenges. 

• As more and more consumers use this channel, more and more advertisers use this channel. And, after spending all day in work email, coming home to a crowded personal email inbox eventually caused performance of email marketing to decline.
• CAN-SPAM regulation created challenges for advertisers as well, giving recipients the right to have you stop emailing them and it spells out tough penalties for violations.
• The more an advertiser takes advantage of this “free” channel, the greater the risk of opt-outs. The biggest challenge: it is simply too easy to hit delete and clean out your inbox without ever having read the email. Overusing email retargeting can lead to a high unsubscribe rate.

Direct Mail: In 2015, new technology allowed advertisers to bridge the gap between online and offline marketing and retarget website visitors via direct mail. Consumer intent is known through their browsing activity and individualized content can be sent to consumers within 48 hours of that site visit via the most responsive channel, direct mail. Ultimately, it all comes down to the fact that our brains are still wired to process physical items more efficiently than we process digital ones. According to writer and researcher Roger Dooley, direct mail is “easier to process mentally” and uses “21% less cognitive effort” than digital advertising.

Targeted audiences, no pop-up ad blockers or spam folders, and stable costs are driving a strong return on ad spend (ROAS); in many instances stronger than digital channels. But it is not without its challenges as well.

• Consumers can opt of programs like this both by setting controls on their computer and by registering on the National Do Not Mail (DNM) list.
• Younger consumers, with growing purchasing power, have not historically been targeted through direct mail, creating the perception that this channel is for an older demographic.
• Impact on consumer privacy, environmental responsibility and the simple fact that the internet provided instant gratification, made “snail mail” unacceptable.

Cost to Retarget

The cost to retarget via different channels will also come into play.  While execution of an email campaign is essentially free, think about the cost associated with getting consumers to give you their email address. If you have had to provide a purchase discount to secure that email, perhaps the program is not really “free”. Digital impressions are also relatively inexpensive, so you’ll want to consider how many impressions need to be served to drive the click through and conversion rates you need. Unarguably, on a piece by piece basis, direct mail is the most expensive, if you are sending first class mail. Regardless of the cost, you will have to complete the ROAS calculation to make sure the return on that ad spend is where you need it to be. Free is only good if the response is there. Costly is only bad if the response is not.

Retargeting in 2020

As you evaluate your retargeting strategy, think about all these pros and cons. With a mere 2% of site visitors actually transacting during their initial visit to your website, retargeting works to drive conversions from the rest.

Consider which channel drives the timeliness, the relevancy, the flexibility and the conversion rate you need in exchange for the associated risks. And remember, it doesn’t have to be one or the other. The greatest success will be had by figuring out how to incorporate each of these programs into an integrated cross-channel marketing program.