A guide to ad retargeting responsibly

Browse any website with ads, then load up your favorite mobile game and you might see advertisements from the searches you did on the website you were just on, now inside your game! How is this possible? It's called ad retargeting, or behavioral retargeting, and it's gone wild everywhere digital.

How does ad retargeting work?

There are actually a few methods of knowing how to retarget users with branded ads, but in a nutshell it has to do with collecting as much data as possible from what you are doing on the Internet, or inside a mobile app that uses an Internet connection, then using that data to call out to ad servers and say "hey, give me some relevant ads based on this criteria or a particular fingerprint".

Some key information advertisers look for to retarget ads to you include:

1. Your IP address, and IP address history (from routers, or your device connection)
2. Your GEO location from LAT and LON GPS data
3. What websites you have visited, and what search queries you have performed (cookies)
4. Specific information about your hobbies, likes, and activities from publicly shared social media profiles
5. Your age, and sex (male / female)
6. What computer, browser, and operating system you are using (from agent strings)
7. HTTP Referrers (where you just came from)
8. Countless other sources...

Overall, remember that nothing you do on the Internet is private. Sure, you can mask yourself behind a VPN, with cookieless browsing, ad blockers, and other utilities - but you are still out there and the weakest point of entry is always a window into who you are.

I get why retargeting is important but there are obvious ramifications to the user's experience, especially if one set of particular ads keep showing up for me over and over, no matter where I go on the web. It seems invasive, and well...spying.

Boaz Cohen, Chief Product Officer of Clinch, has some interesting things to say about retargeting so he lent us a few moments to gain his insight from some tough questions we posed, mostly centered around why some companies are abusing the ability to target and profile a user.

ADM: What is the difference between personalization and retargeting?

Cohen: Retargeting is a subset of Personalization. When marketers talk about personalization, they mean taking the creative and adding elements that make the creative more relatable to the viewer. For example, an automotive brand can dynamically add the location of the nearest dealership to the ad or a lease offer (vs. a buy offer) to someone who’s more interested in leasing than buying a car.

Retargeting is one way to personalize creative - by showing specific products that the user was looking at on the site. By doing this the consumer is more likely to notice the ad and buy the product.

ADM: When does it make sense to use each?

Cohen: Marketers should always personalize their creative - in the world of short attention spans, multiple media channels, and brands competing for the users’ attention, personalization is the way to get an edge on your competitors. Just think, when was the last time you saw an ad that was wildly irrelevant to you?

ADM: What sectors have the most success with retargeting and/or personalization?

Cohen: E-commerce and travel companies are the heaviest users of retargeting. They often retarget and personalize at the product-level. However, nowadays almost every website retargets visitors to their site, from automotive to retail to B-to-B companies.

ADM: 90% of consumers report seeing ads for products they have already purchased. Why does this happen?

Cohen: There are two separate reasons depending on verticals:

Offline purchase - there is a lag between the time a consumer purchases something offline and the time the digital retargeting company gets that info. During this period a consumer may be retargeted.

Online purchase - Sometimes data may not be synced across devices. This means that when someone purchases something on their desktop, the data might not sync right away and they may get retargeted on their mobile device.

Also, retargeting companies are disincentivized to be efficient. Brands often pay their retargeting tech provider per impression, so there is zero financial incentive for the retargeting provider to stop, even if the person has purchased the product. 

ADM: When it comes to retargeting what are brands doing wrong?

Cohen: Brands make mistakes by using separate providers for display, video and social. This causes a disconnect as these providers aren’t sharing data and creative strategy with each other. Instead, they are blowing through frequency caps (the number of times a consumer is supposed to see an ad) and reaching the same user, with the same message, just through a different medium. Consolidation and creating a unified data and creative strategy will lead to better outcomes.

ADM: Are there privacy concerns when it comes to retargeting?

Cohen: No, in general consumers are retargeting in anonymized and aggregated ways. However, if a consumer does not want to be retargeted they can opt out of interest-based advertising through various platforms like The NAI, Google, and Facebook.

ADM: Which social platforms perform the best retargeting results?

Cohen: Facebook with their DPA is leading the platforms with best lower funnel/DR results. However, with the increase of brands advertising on Facebook, especially after Facebook changed their news-feed algorithm early this year, ad costs on Facebook have gone up, and therefore performance went down. Interestingly enough, it’s Instagram that is replacing Facebook in performance and cost efficiency, and we see advertisers shifting performance budget there.

ADM: How do you avoid inundating consumers with a brand's retargeting ads (frequency capping)?

Cohen: Brands need to treat consumers in the way they want to be treated this means:

Creating frequency caps. Brands need to determine that optimal number of times a consumer needs to see an ad to make a decision and to avoid brand fatigue.

Creative. Good creative can make the difference between developing strong consumer connections and turning off consumers completely.

Be selective. This means selecting the right product that will resonate with consumers if retargeted.