How Retargeting Can Jeopardize Revenue, Brand Trust And User Satisfaction

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timmayerupdated“Data-Driven Thinking" is written by members of the media community and contains fresh ideas on the digital revolution in media.

Today’s column is written by Tim Mayer, chief marketing officer at Trueffect.

Retargeting is a great way to engage with consumers who have already demonstrated interest in your product or service and have entered the consideration phase of your purchase funnel.

Many marketers view retargeting as an opportunity to get a user back to their websites where they will move down the funnel, but retargeting is more complex than recapturing a wayward user. Fine-tuning is required. Often, there are cases in retargeting that lead to lost revenue, diminishing customer satisfaction and damaged user trust.

Here are three common use cases where retargeting can lower your potential:

Case No. 1: A user books a rental car directly through the rental car company’s website, then visits Facebook. In the right-hand column of Facebook, the user is retargeted with a promotional ad that offers 20% off their next booking at the same rental car company. The user clicks on the ad, which goes to the website, cancels the existing booking and then books the same car rental with the 20% off certificate code. The result: lost revenue.

Case No. 2: A subscription service company displays an acquisition ad for a bundle of services to a visitor. The visitor is an existing subscriber and the offer price is lower than their existing monthly fee. The subscriber calls the service company’s support line in an attempt to lower her monthly service fee. The customer service representative informs her that she is not eligible for the new customer offer. The user is dissatisfied as a result and has a terrible customer experience. The result: lower customer satisfaction.

Case No. 3: A user visits a retail sports company’s website and visits a SKU-level page. The user decides not to purchase the product because he is not in the market for it. When the user visits Facebook, an ad for this product is displayed. In this case, the user distrusts the brand because he gets the creepy feeling that he is being watched, followed and targeted for a product in which he simply is not interested. Result: damaged trust.

When retargeting, we cannot withdraw the ad from the user after the impression is purchased. But we can optimize the creative decisioning process and make sure that we instead display a better-targeted offer to the user.

Here are alternate creative decisioning options for each of these three use cases that will improve business outcomes for the advertiser:

To solve for lost revenue, if you drop a cookie on the “thank you” page and see the cookie later, offer the user an upsell or cross-sell, such as an upgrade to the reservation for a certain fee. This would ensure that no money is lost to already converted users, and could potentially improve the return by converting any users with upsells to larger or premium cars. Another often underused technique is suppression, which entails dropping a cookie for converted users so they are not retargeted at all.

To address the lower customer satisfaction case, you can look for a set of cookies that would alert you to existing subscribers with a certain service set, providing the opportunity to either display an upsell offer or give them the highest price offer available for their existing portfolio of products. This would lead to improved customer satisfaction, as well as lowered customer call volumes and fewer calls with irate customers. The advertiser could also see some additional revenue in upsells. The suppression technique may also be used in this case.

To solve for damaged user trust, move from a SKU-level retargeting to category-level retargeting or a similar product retargeting initiative to encourage the consumer to engage with the brand’s website. Using an offer with a discount code, or displaying compelling content, such as the “Top 10 men’s running shoes,” would be a powerful way both to get the user back to the site in the right frame of mind and to develop a high level of trust between the brand and the user. Another technique that might prove useful in this case is to lower the frequency capping so that exposure to these ads would not be as prevalent on a per-user basis.

Many marketers look at retargeting as a no-brainer way to bring lower-funnel users back to the site to convert. The business metrics show a low cost per conversion and a high volume of conversions from this channel. But retargeting has many uses that can be optimized to improve revenue, retain user satisfaction and trust. Don’t look at retargeting in isolation. Instead, consider retargeting in a more comprehensive and broad manner across display prospecting and retargeting or, better yet, across the entire marketing portfolio.

Looking at remarketing in this broader context of marketing can help analyze how incremental the impact of retargeting is in the marketing mix so we can better understand which conversions would have been achieved anyway without the efforts of retargeting.

Follow Tim Mayer (@timmayer), Trueffect (@Trueffect_Tweet) and AdExchanger (@adexchanger) on Twitter.

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