Marketing TechnologyDigital AdvertisingRetargeting gets credit for sales that would have happened organically, say 83% of marketers

Retargeting gets credit for sales that would have happened organically, say 83% of marketers

Consumers generally hate retargeting, which they associate with the worst of it—the ads that follow them around the Internet—yet marketers seem to love the strategy. Except they actually don't, according to Nanigans research.

With today’s customer journey being more complicated than ever, it’s rare for the first touchpoint to result in a sale. Retargeting makes sense as a solution to that, designed to convert online window shoppers. The problem is, there’s so much bad retargeting out there. The repetitive ads that follow you all around the Internet have made the strategy unpopular with consumers. And yet, marketers still love it. Or do they?

Performance advertising software company Nanigans surveyed 100 retail marketing executives who collectively spent $16.7 million on performance media last year. When asked if they believe retargeting ads have taken credit for sales that would have happened regardless, 83% said yes.

But 75% don’t even have a way to measure if sales attributed to retargeting would have occurred organically, so they don’t know for sure. Many marketers continue to retarget the same way, just because they always have.

Nanigans retargeting stat

“Attribution is a hard thing to solve because we have these disconnected actions. We’re not logging everything somebody does; all your data isn’t in some central repository. We can only infer things,” says Adam Helfgott, CEO of decentralized ad-tech ecosystem MAD Network. “There’s a lot of spray-and-pray and retargeting sometimes gets credit because it’s the last man standing. Is anyone really going to take away their retargeting budget to test to see if sales go down?”

The root of retargeting problems

In addition to the retail executives, Nanigans surveyed 1,000 consumers. One-third of them believe retailers need to realize when consumers are no longer interested in a product and adjust their retargeting accordingly.

More than three-quarters (77%) think they see too much retargeting from the same retailers. And even more (88%) reported seeing retargeted ads for products they’ve already purchased.

Retargeting for products already purchased

“If you constantly see a Michael Kors bag following you around, you might be less prone to buy one,” says Helfgott. “Everything is optimized for creating as much revenue as possible now—not necessarily for the brand, but the media dollar.

Retargeting alternatives

Marketers can take retargeting in-house to have more control. According to Advertiser Perceptions, 32% of brands already do. Helfgott offers an “I don’t like this” button similar to those on social media ads as an alternative, while Patrick Reinhart, Senior Director of Digital Strategies at SEO platform Conductor, suggests more experiential digital marketing. He points out that his son is a big Pokémon fan who loves the brand’s on-site search engine, Pokedex.

“It’s not saying, ‘Come buy this deck of cards,’ says Reinhart. “My kid likes the experience of learning about the different creatures, which ultimately gets you to the next phase: Buy a deck of cards. I’ve never been a believer in display. People spend hundreds of thousands on it and can’t tell if they made a nickel. I think content like that is a much better form of advertising.”

Indeed, Nanigans’ survey found that 55% of retail marketers consider “measuring the true business impact of advertising” to be their biggest challenge. Reinhart also names Madison Reed, a hair color brand that doesn’t overtly try to sell products to consumers. Instead, when you go on madison-reed.com, you’re immediately greeted with a questionnaire designed to help you find your perfect shade.

Madison Reed

“They present you with products that make sense to you,” he says. “The website is starting to become like a salesperson asking you questions.”

This ultimately brings a human touch to online shopping, creating the kind of omnichannel shopping experience consumers crave.

Retargeting and the GDPR

In 2015, the Interactive Advertising Bureau (IAB) launched a LEAN Ads program, an acronym for light, encrypted, ad choice supported and non-invasive ads. It was developed in response to rampant ad blocking and covers, among numerous other things, frequency capping and appropriate targeting on retargeting.

While that’s not actually regulated, marketers’ data practices are, now that the General Data Protection Regulation (GDPR) has gone into effect. But depending on the language used in a company’s privacy policy, consumers may unknowingly consent to allow marketers to continue using their data. Surveying 2,000 American consumers in November, Deloitte found that 91% of people—and 97% of those between 18 and 34—blindly accept legal terms.

Deloitte consumer privacy infographic

Still, Reinhart thinks marketers will become better at retargeting, even if it’s out of self-preservation. The regulation’s staggering fines start at €20 million (or $22 million).

“GDPR throws a huge white hot wrench into a lot of companies’ ad campaigns because they’re going to be spooked by the thought of big lawsuits,” says Reinhart. “The Internet is still too much like the wild west, but I think within a year or two, those regulations will be global.”

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