First things first: 'What is ad retargeting?'. Simply put, it's advertising targeted specifically at you, based on things you have already shown an interest in, but not bought. Say, for example, you were mulling over a lovely pair of socks on your favourite sock retailer's website but navigated away without purchasing said pair of socks. The chances are, you will suddenly notice adverts appearing on websites you visit later on that day as if you were being hounded by some kind of relentless electronic sock salesman (an RESS, as it's known in the industry). Coincidence? No. You've been retargeted.
This sort of advertising is set to start happening a lot more in the coming year. Some of the major retailers are investing heavily in ad retargeting, making it one of their key online marketing strategies for 2011. The reason they’re switching investment to this area: it works. All Saints (the clothing retailer, not the girl band), say they generated a return of £21 for every £1 spent on retargeting ads in the last two months of 2010. Struq, a specialist retargeting company, claim they are generating conversions of up to 640% for their top ten clients. So, you can clearly see why it’s appealing to online retailers. But how is sitting with the consumers?
Joseph Turow, a professor from the University of Pennsylvania and a specialist in online advertising, thinks that people really don’t like it once they learn how it’s happening. Whereas to others, perhaps, it’s not quite as bad as full-on behavioural advertising because you know why these adverts keep following you around. But what if you don’t want your shopping interests to follow you around the internet? You left the site because you decided not to buy the product, now it’s appearing on every other site just to torment you. Worse yet, you might find products being targeted at people who you share your computer with, products that you really don’t want to be brought to their attention. There are some companies, such as Criteo, that provide an opt-out option at the bottom of their retargeted ads but unfortunately this is not a universal principle followed by all advertisers. A better solution may be appearing as browser firms are working on integrated 'do not track' systems, like the recently released Keep My Opt Out extension for Google Chrome which keeps opt-out settings even if your cookies get cleared.
The rise in retargeted advertising is not going unnoticed. The Institute of Practitioners in Advertising has called for immediate research and the formulation of best practice around its use. Although this is borne of a fear that there will eventually be a backlash from unhappy consumers, it is a positive nevertheless. This is an issue our friends at the Internet Advertising Bureau are tackling by including it in their EU self-regulatory good practice framework. As highlighted in our preview of the 2011, online privacy is a hot topic at the moment. If the issue of retargeted advertising is not developed with consumer control and transparency in mind, there could well be an eventual uproar from consumers. What’s more, if left to develop freely, along with personalised behavioural advertising, what’s next? Personalised biometric advertising, Minority Report-style?
Consumers may not be totally adverse to retargeted advertising: there are circumstances where it could be truly useful – where it’s used not just to readvertise something to you but if it’s remarketed in a different way. That pair of socks you decided not to purchase may have been because you thought the price was too high so you went to look somewhere else. If, later on, an advert for those socks reappeared on a different site telling you they had been reduced by 50%, you might be extremely happy and praise the ingenuity of those clever retargeting advertisers. On the other hand, you may have already bought another pair of socks and therefore the retargeted advert serves as more of a kick in the teeth than anything else. The key really lies in the proper implementation of sensible guidelines. Hopefully in 2011 that is exactly what we will see.