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New Survey Points to Retargeting's Successes and Growing Pains

  |  May 28, 2014   |  Comments

If social media ad exchanges continue to push mobile retargeting forward, the industry is poised for rapid expansion.

Retargeting has been a growing phenomenon for years now. But a new Chango/Digiday survey reveals that the industry could be poised for another growth spurt if it can overcome the technical obstacles surrounding mobile retargeting.

The survey asked 400 media buyers, agency executives, and brand executives about a wide range of topics involved in retargeting, including the fundamental question of which types of retargeting are now possible. Not surprisingly, site retargeting came out on top (88 percent), but search retargeting (65 percent) wasn't all that far behind. Interestingly, and perhaps a reflection of the emergence of native advertising, the survey found that creative retargeting is on the rise. Some 33 percent of agencies and 22 percent of brands now use the technique.

Another fundamental question for the industry, of course, is how success is measured, and the survey shed some interesting new light on the matter. More than half of respondents (57 percent) revealed that they're now using a combination of click-through and view-through attribution. (View-through measures the number of users who convert after being exposed to an online ad, regardless of whether they click.)

That view-through has joined click-through as standard practice is a strong sign that the industry is capable of overcoming challenges. But now the retargeting industry faces an even bigger challenge: how to make retargeting work on mobile. While plenty of brands have already jumped into the mobile experiment, thus far the results have been somewhat mixed: While 45 percent of respondents said their mobile retargeting campaigns were "somewhat successful" and 29 percent indicated they were "successful," only 8 percent of respondents said "very successful."

It's, perhaps, not surprising that many brands and agencies are still trying to figure out mobile retargeting. The challenge with mobile retargeting is that the simple but critical technology that sits at the heart of desktop retargeting, the cookie, is often of little use on mobile, as users move from device to device and in and out of apps.

The more surprising news is that a solution to the mobile retargeting dilemma is beginning to emerge in the form of social media ad exchanges. The social media exchanges avoid the cookie and cross-device problem, as users will often be logged into the given social network on all of their devices. That helps explain why, according to the survey, 67 percent of buyers now rely on Facebook's FBX exchange for retargeting. Twitter's Tailored Audiences, which launched late last year - more than a year after FBX - is now exploding onto the scene as well: An impressive 38 percent of buyers have already retargeted Twitter users via Tailored Audiences.

If the rise of social media exchanges is great news for the industry as it tackles mobile, perhaps the best news of all is simply that the industry is continuing to grow. The survey found that retargeting budgets are still expanding and still becoming a larger portion of the money spent on online advertising.

As for where that money is coming from, some 68 percent of agencies and 49 percent of brands are funding their retargeting with dollars previously slated for display. But, in some cases, retargeting is now so fundamental a part of the digital strategy that it has earned its own budget. According to the survey, 9 percent of brands and 10 percent of agencies have formed these separate retargeting budgets.

We can expect that trend to continue as the industry continues to expand. And we can expect the industry to expand rapidly if social media ad exchanges continue to push mobile retargeting forward.

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ABOUT THE AUTHOR

Ben Plomion

Ben is Vice President of Marketing at Chango, where he heads up all marketing and communications initiatives. Prior to joining Chango, Ben worked with GE Capital for four years to establish and lead the digital media practice. This led to the development of GE Capital's digital value proposition and its execution worldwide.

Ben graduated from GE's Experienced Commercial Leadership program after completing his MBA at McGill University. Before GE, Ben held a variety of marketing and business development roles in the e-payments industry, while working at Gemalto in London.

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