Why You Need to Know about Remarketing

Blog Categories:  Internet Marketing  

Say you're an electronics company trying to boost the sale of flat-screen TVs. Which do you think would be more effective: advertising a "25% Off Televisions" sale to all Web users, anywhere; or, advertising the same "25% Off Televisions" sale only to those users who have clicked through the flat-screen TV page of your website in the last three months?

You guessed it: the latter. And that, in a nutshell, is why you need to know about remarketing.

What is Remarketing?

Simply put, remarketing is Internet advertising to people who have visited your website but haven't converted. It puts ads in front of unconverted website visitors in order to entice them back to your site to complete some action—be it donating funds, signing up for a membership or finishing a purchase.

How Does Remarketing Work?

What remarketing does is build a relationship with potential clients beyond their initial visits to your site, amplifying their impressions and sense of your brand. Also called retargeting, remarketing gives businesses a way to reconnect with users who came to their site and left without taking action. It targets ads directly to these tagged users, making advertising highly relevant and potentially more effective.  And because it’s specially targeted to people more likely to be converted, remarketing has great potential to not only make your advertising more noticed but also more effective—increasing conversions and boosting business.

Here’s how it works: A consumer comes to your site and his or her browser gets tagged —- which just means that the small text files known as cookies, specific to each particular computer, get added to your advertising list. As the individual continues surfing the web, clicking on various sites, your ads get displayed on their particular browser. Your ads are only shown to these consumers who have visited your site, which means you’re only advertising to people who already have some interest in your company, and the user is seeing ads for products and companies relevant to their interests. So essentially, remarketing targets relevant consumers and reinforces their exposure to your site.

When an article about remarketing was published last year in The New York Times, this advertising tool was already being used by retailers such as Art.com, B&H Photo, Diapers.com, eBags.com and the Discovery Channel store, with ads frequently appearing on major sites like YouTube, Facebook, MySpace or Realtor.com.

“The overwhelming response has been positive,” Aaron Magness, senior director for brand marketing and business development at Zappos, a unit of Amazon.com, had said in that article.

Today, remarketing as an advertising tool is being utilized by brands as big as Google, which has integrated remarketing into its Adwords Program as an additional resource for its users. Remarketing has the potential to streamline advertising efforts, increase a company’s return on investment and improve overall marketing results by customizing audiences and targeting ads.

Example of Remarketing at Work:

Think of this scenario: Midwesterners looking for a ski weekend in Geneva, Wisconsin, visit the site of a popular Geneva hotel, browsing through its page of room rates. Some visitors leave without booking any accommodations. If the hotel decides to use remarketing, it targets those unconverted consumers by adding them to a browser list and then relevant ads, say offering discounted rates, are displayed to those users as they continue surfing online. This gives the hotel the opportunity to build a relationship with these potential guests, reaching out to them with a clear call to action or special offer that might entice them to make a purchase.

How Does Remarketing Compare with Traditional Paid Search Advertising?

Remarketing is a form of Internet-based advertising, as is traditional paid search advertising. Both display ads to targeted web users. But while remarketing targets users who have already visited a site, traditional paid search advertising targets users in order to get them to come to a site.

Paid search advertising works like this: A company selects key search terms related to its business -- for a bank in Naperville, Illinois, that could be “Naperville bank” or “Southwest Chicago bank” or “Chicago community banking,” for example -- and when web users, from any location and any computer, search for those terms, the bank’s advertisements appear. Search advertising is designed to focus on attracting interested consumers to your site, right when they’re already hunting online for services you offer. It’s made to increase awareness of your brand and extend your user reach.

But while search advertising is about getting interested customers to come to your site; remarketing is about reaching out to customers who have already come to your site so you can find a way to close to deal with them.

Are There Downsides to Remarketing? What are the Pitfalls?

As powerful and effective as remarketing can be, it is not without its disadvantages. The fact is, not all web users can be won back through repeated exposure to ads about your site -- some may have come to your site by accident or were never interested. And some, when they start seeing ads targeted to their viewing history, might even be upset.

The New York Times article on remarketing told of the reaction from Montreal blogger Julie Matlin, for example, who, after noticing several targeted ads on her browser, began getting promotions for a dieting program she’d once used: “They are still following me around,” Matlin said. “And it makes me feel fat.”

To some consumers like Matlin, remarketing can feel like an invasion of privacy—as if companies are watching over their shoulders without their permission. In response to the phenomenon, there’s even a Facebook group called “Stop the Creepy Targeted Ads,” which was formed, as it says in its online description, as a statement of how “it’s a little bit creepy how well [advertisers] know us.”

Google has responded to these concerns with its new “transparency” feature, which gives consumers an explanation of why they’re seeing certain ads, believing that when individuals know ads are being catered to them for their own good, they’ll be less likely to feel uncomfortable.

Other consumers aware of what retargeting does actually notice benefits. Take Libby Jacobson, of the Independent Women’s Forum, for example, who recently pointed out what she likes about ad targeting: “[R]ather than seeing ads for ‘Hot single women in your area’ or links for other male-centric websites like AskMen (where I can learn how to tell if my boyfriend thinks I’m too fat), I’ll instead see ads for clothing from a shop I frequently buy from.” This kind of targeting, Jacobson notes, is not only helpful but also smart business—no different than the fact that there are usually beer commercials during the Superbowl. It’s a simple case of advertising to those who are interested.

Remarketing: The Bottom Line

With its ability to target unconverted web visitors for companies, remarketing has been shown to deliver strong results, even boosting conversions by 50% or more. That makes remarketing even more than a second chance to sell—it makes it a powerful tool for increasing business.

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