The Display Game Changes: AdWords Adds Retargeting

Google AdWordsToday, Google announced that it is enabling Google AdWords advertisers to remarket to its users by letting them cookie their users, and then buy display ad inventory that match those user cookies on the Google Content Network. Read the announcement by Google Product Manager Aitan Weinberg on the AdWords blog.

Hello? Anyone there? This is BIG for display advertising! Publishers CPMs through AdSense are about to go up as advertisers bid higher for your audience because it’s their audience, too. And for advertisers….

Dear 1 million+ advertisers on AdWords: You are now going to taste the low-hanging fruit of retargeting (or remarketing) as users who obviously like your content or products – intenders of all shades – are going to see your ads elsewhere and actually (potentially) be happy to see your ad because, after all, they just checked out your site. This is a bottom of the funnel opportunity limited to the scale of your own site.

Google confirms that the DoubleClick For Publishers (DFP) inventory on the DoubleClick Ad Exchange will also be available be for retargeting/remarketing (they’re the same thing) purposes through Google AdWords which means not only will you get the Long Tail, you’ll get the short one, too, as many of the world’s biggest publishers currently put inventory on the DoubleClick Ad Exchange.

AdWords advertisers also will be allowed to frequency cap and block content types (even URLs) for retargeting.

More notes:

  • Chris Dixon tweets that this new feature is going to freak a lot of people out in addition to being effective. When he says “freaky” I assume he means that seeing an ad for a site you just visited will lead people to wonder why they’re suddenly seeing ads from that site. Maybe. Remarketing has been done by big marketers for quite a while now. Still, freakiness is definitely possible especially when you have a retargeting campaign with uncapped frequency run by a less sophisticated marketer suddenly tracking your every move across inventory on the DoubleClick Ad Exchange (DFP and Google Content Network).
  • This move by Google will raise the profile of behavioral targeting which will lead to advancing the conversation – hopefully beyond “behavioral is bad.” Given the effectiveness of retargeting, for advertisers new to the feature, they will definitely be supportive of behavioral targeting. Perhaps they can join the charge to both protect consumers and enable cookie tracking through responsible self-regulation.
  • This is great for Google GCN margins. Buyers of Google Content Network through the exchange are buying display impressions via GCN’s blackbox publisher margins. More competition means higher prices and presumably better margin flexibility ($$$) for Google.
  • This (all AdWords advertisers) is more competition for the DSPs or Certified Ad Networks currently buying through the DoubleClick Ad Exchange. This speaks to the importance of finding cost-effective audience beyond just the DoubleClick Ad Exchange.
  • The need for effective attribution will become more acute as search marketing and display converge. Retargeting is a search-like, bottom of the funnel opportunity. How does a marketer know if Search or Display drove the conversion beyond the last click? Better attribution models will help.

By John Ebbert

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  1. J. McFarland

    Nice analysis — agree there are lots of winners with this announcement. Publishers will also be able to create inventory-extension packages by retargeting their own users off-site. For niche B2B pubs like AdExchanger, this could be huge.

    Who stands to lose? Immediately, all of the low-end retargeting providers (many of whom were just booking the same buys on Google via the interface while it was in closed Beta anyway.) The bar on performance just got significantly raised, as now companies have an easy and viable in-house alternative.

    When Google releases search query-retargeting, my bet is that it will be checkbox-simple. As in, “check this box to begin retargeting the keywords already in your AdWords account” and “check this box to retarget relevant keyword clusters, as you do with AdSense contextual targeting.” That, too, will decimate a lot of the folks who are arbitraging the keyword retargeting space: Permuto, Magnetic, et al.

  2. We all saw that coming. Is it the end for other retargeting startups? Probably not.

  3. I think the announcement is good news for both advertisers and consumers alike. Sure, there may be a certain level of concern about privacy with retargeting, but once advertisers learn to manage their campaigns properly by using frequency caps so as not to bombard their audience, that concern will no longer be valid. Consumers benefit in the long run because they’ll now be presented with discounts and promotions for products they’re actually interested in and can use.

    I think it’s important to note, also, that retargeting isn’t something new. The fact that Google is now implimenting it, however, only serves to validate this useful marketing tool and proves what other companies have been capitalizing on for a while now.

  4. It’s very interesting indeed and of course it was only a matter of time for Google to have their own re-targeting product. What is scary is that Google already has so much data on users’ behavior, referring URL’s that took a consumer from to the #1 organic listing for any search term. For that I think it will be hard for other “search retargeting” companies like AdRocket and to have as much aggregate data as Google. And now search re-targeting and BT / re-marketing companies are all blending together (Audience Science, Fetchback, Permuto, Criteo, AppNexus, Dotami). There continues to be a bunch of clutter, but like everything else, I think the cream will rise to the top.