by Adit Abhyankar, executive director at Visual IQ
One in five marketers now have a dedicated retargeting budget, indicating that it’s a tactic believed to be responsible for driving a significant volume of conversions. But marketers who are basing budget allocation decisions on last click attribution may be misled about the true effectiveness of their retargeting efforts.
Retargeting platforms operate by serving an ad to a user after they have identified themselves as having a higher intent to purchase. For example, those users who come to a brands’ website directly or load items into their basket. These platforms can ‘find’ users as they surf the Web, and therefore stand the best chance of being the last media touchpoint before a conversion event and given the majority of attribution credit. But the question is, how many of the users retargeted by a platform would have converted regardless?
There are a number of ways that marketers can determine whether or not retargeting is truly driving incremental conversions. One approach is to look at the users who could have been retargeted but were not, either because the marketer’s retargeting platform could not find that user again, or because spending caps were reached on the retargeting platform, so the user was no longer served ads. By comparing the conversion rates between users that could have been retargeted but weren’t, with those that were retargeted, marketers gain a high-level view of the incremental value of their retargeting efforts.
Another way to measure the incremental lift of retargeting is to consider the conversion funnel For a company where the path to conversion is fraught with obstacles, retargeting may be the only way to encourage potential customers that abandoned their journey to conversion back into the process. The financial services sector is a good example, since applying for financial products online often involves filling out many different forms and sharing personal information. This process can be daunting for prospective customers and may cause them to abandon the conversion process half-way, especially when a brand is still trying to build trust. In these instances, retargeting could be driving highly incremental conversions.
Moreover, the level to which retargeting drives incremental conversions could also be a barometer of the efficiency of a brand’s site or business processes in driving a visitor down the conversion funnel. Marketers who can truly measure the incremental value of their retargeting efforts can not only tell if they are making money or wasting money on retargeting, but can also determine whether their site is doing a good or poor job of converting high-propensity visitors.
By using tactics such as those outlined above together with advanced cross channel attribution, marketers can ensure they are capable of discerning exactly how much retargeting is incremental and how much is not. As a result, marketers not only save money, but can also quantify exactly how much growth they’re leaving on the table because of a broken conversion process.
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