How AdWords Re-Targeting Works
Some business owners have the mistaken notion that the goal of online marketing is to simply drive traffic to a website. While increased traffic to a website is certainly a goal worth pursuing, at the end of the day, your ultimate goal should be to sell.
While many online marketing platforms can deliver in terms of generating website traffic, the results, in terms of conversion, tell an entirely different story. What this means is that a significant number of website visitors do not go through the complete sales process and leave the website without making a purchase. Some studies even suggest that as much as 98 percent of a website’s visitors leave without buying anything, while only two percent actually buy something upon first visiting a website.
But all is not lost. To a great extent, you have made serious gains in reaching out to that 98 percent and you can still take advantage of the idea that these website visitors know who you are and what you have to offer to them. How? Through AdWords Re-targeting.
What is Re-Targeting?
Rather than coming up with my own definition, here’s Wikipedia’s definition that I believe explains it very clearly:
Personalized re-targeting is a display advertising technique used by online advertisers to recapture consumers who visit a retailer’s site and leave without making a purchase. It functions as a complement to search, SEO and other marketing campaign tactics.
Re-targeting techniques focus on people who have visited your website and deliver ads to them as they visit other websites. Think of it as a way of keeping your products or services in their minds until they visit your website again.
But why invest your time, money and effort toward re-targeting?
Re-targeting can help bolster your sales by letting your products or services stay on top of the minds of window shoppers. The more that they see your ads in the different websites they visit, the more recognition your brand gets.
Of course, the larger your audience the more effective your re-targeting campaign will be. If you don’t have much traffic on your own website, you will not get much re-targeted traffic either. In all cases, it is always recommended to build traffic first and add re-targeting after that.
When you set up your campaign, you can select which websites you want to show your ads on, very much like you would do with a regular display ad media buy.
The very cool feature is that once a person from the audience converts (clicks on the re-targeting ad) a “burn pixel” is triggered which removes them from the audience. In some cases, a re-targeting campaign also allows you to show a different banner to those converted visitors. It can actually get quite sophisticated.
How Do I Measure Results?
Re-targeting agencies typically employ a variety of pricing models to charge advertisers for the ads viewed by visitors. The most commonly used tracking methods are:
- CPM (cost per thousand)
- CPC (cost per click)
- CPA (cost per action)
Cost per Impression (CPM) is a common metric used in the online advertising industry to charge advertisers for inventory based on a set price per thousand page impressions. An impression is defined as any time a banner ad loads on an individual’s web browser.
Pay per Click (PPC) also referred to as Click-Through Conversion, charges advertisers for every verifiable click that leads consumers back to your website. Unlike the CPM model, which charges advertisers a flat rate, advertisers working under the PPC model are only charged when a visitor actually clicks on an ad.
Cost per Action (CPA) is a pricing model in which advertisers are charged based on pre-arranged action (a purchase, a view through, etc.), although a completed sale is the most common action used under the CPA model.
As you can see, re-targeting actually gives credit to both click-though, and view-through conversions. Your ad agency will be able to report to you all of the above actions and based on your budget, you can adjust your campaign as needed to obtain the desired results.
Is Re-targeting Effective?
The simple answer is YES. Everyone in sales already knows that you can close a lot more sales when you get a second opportunity to sell to a particular prospect, or when you get that prospect to come to you for a second meeting. Re-targeting accomplishes just that, albeit in the Internet arena. That’s what makes re-targeting one of the most effective ways to close a sale by targeting a visitor that has already been exposed to your brand. If that visitor happens to be “on the fence” re-targeting will be a sure method to entice that visitor once again and convince him or her to buy your product.
Ok, so now that we all have a basic understanding of how re-targeting works, here are a few tips to ensure that your campaign is not just a waste of money or a misused channel.
In our experience, re-targeting works best when you already have some type of pay-per-click campaign in place, like AdWords. The reason for this is because the way to really convert your visitors into buyers is to have properly designed and optimized landing pages that have been tested (A/B, etc.) and proven to work well through your existing AdWords campaign. We all know that a truly effective AdWords campaign takes a lot of work, research, testing, adjusting, etc. Re-targeting is no different. However, if you use your existing findings from your PPC campaign and complement it with a re-targeting campaign, your conversion rate should improve.
All banners are not created equal. Re-purposing banners for your re-targeting campaign may not always work. Re-targeting display ads work better when they are a bit more personal and direct. A general display ad does a good job advertising your brand and your offer, but a re-targeting banner needs to go beyond that. It’s like the difference when you are introduced to a person for the first time or when you run into the same person a second time. The first time, you’re more formal. The second time, you can be more casual and spontaneous. Apply the same formula to your re-targeting banners.
Don’t Overdo It. Like everything else, too much of a good thing can really fire back on you. People in general and your “audience” as we described it above in particular, doesn’t like to be followed. Seeing a few display ads from you will be effective, but being constantly exposed and bombarded with your banners everywhere they go will ultimately irate them and it will give them negative feelings about your brand. It is better to spread your budget over time rather than add a ton of money to a condensed time frame.
Long Term is Better. Just like AdWords campaigns work better over a longer period of time, simply because it allows you to optimize your campaign and fine tune your ads to the point that they convert at higher rates while costing you less per click, you will want to run your re-targeting campaign for a few months at a time. Reason number one is that over a longer period of time you will be able to build a larger audience. Remember, “audience” in your case are the visitors that previously visited your site and received the cookie. Secondly, like I said in the above point, you will want to spread your efforts over a longer period of time so that your exposure is not too condensed into say, a 30 day period, and your audience gets annoyed by your ads.
In sum, re-targeting can be extremely effective, but there’s no shortcut to it. Those who put some serious time into their ad campaigns will be the ones that also benefit the most from PPC and re-targeting working in tandem. If you’re just in for the magic pill expecting immediate results, I will tell you right now that you’re in for a great disappointment. Our team at MGR Consulting Group can help you determine if a Re-targeting campaign will work for you.
Let me know what you think. Have you had any experience with re-targeting campaigns? If not, is it something that you would consider in the future? Feel free to add your comments below or contact me directly with your questions.
Thank you for reading. Until next time, this is Manuel Gil del Real (MGR) – MGR Consulting Group