Myths and facts about multiple retargeting

In a time when almost all ecommerce players use retargeting as a way to multiply their revenue, the smarter your approach is, the better. In this highly competitive environment, marketers are shifting their focus on performance-based activities and are no longer engaging with just a single tech provider.

Today, more marketers know that running two to three campaigns with use of both “standard” and “professional” retargeting solutions can bring much better overall results. However, with a large number of retargeting engines out there, marketers frequently ask whether engaging with multiple retargeters is good for business and whether they will really see a difference.

To gain a better understanding on multiple retargeting, here are the most popular myths marketers should be aware of.

Myth 1: Using the same inventory supply will lead to worse results

Fact: A holistic approach will be more effective

No doubt different multiple retargeting tools achieve better results when they operate on separate ad inventories. For example, targeting inventories on Facebook versus another group of websites will definitely bring about positive results. Nevertheless, there is still a lot of confusion as to how multiple retargeters can work effectively within the same ad space, or if they even work at all.

While a single provider does bring results, the use of multiple retargeters is holistically more effective and can bring advertisers better results. How is this possible? Let’s visualise it:

On the first chart, the red line represents the return from retargeting activities on a single ad inventory.

However, marketers have bear in mind that the results delivered by each tech provider are not the same, as they utilise different methods. We can see this clearly on the second chart. The solid line drawn above both retargeters’ results shows the overall potential return. Therefore, in a typical scenario, each provider will win in some cases and lose in others. This means that each of them will generate fewer displays overall. In such situations, the total return from an advertiser’s point of view will be higher and each display more effective.

Myth 2: The same technology means the same results

Fact: Technological differences are key

There is a common misunderstanding that because all retargeting providers in general use comparable technology, the only thing they can offer is mirroring the same activations.

When we say every retargeting tool is “different,” it means that they may be using different sets of algorithms, user segmentations, unique creatives, and so on. This also means that different results are gathered from each retargeter. One tool may be better in reaching a certain group of users, while another will be more effective when appealing to another group of potential buyers. Although the way of using the technology may be similar, algorithms rule, so we can safely assume that using multiple retargeting approaches (or at least two) will ideally yield results that do not overlap.

Myth 3: More providers means more expensive ads

Fact: It’s all about high-value users

One of the common concerns with retargeting technology is the cannibalisation of ad space. A common argument is that when advertisers agree to cooperate with more than one retargeter, two providers will attempt to buy campaign impressions for the same user, and this can have the negative impact of raising the final price. Furthermore, retargeters attempt to bid less (to save their percentage margin) and in turn reduce the number of impressions that can eventually be bought. However, what are the overall consequences in practice?

Adding additional retargeters will surely change the RTB auction environment. The final margin on this particular impression can be lower. But let’s think about it this way: if these are “highly valuable users”—for instance, people who have just abandoned their shopping cart—there is therefore no possibility that an advertiser will lose them despite competing with more than one retargeter in auction-bidding for the customer. Marketers can be assured that they will not overpay for those users, as long as they use a final payment model with specific effective cost targets like the eCPO. The overall effect for the whole group will be the sum of specific subgroups of these highly valuable users. This also means that there is a very low probability of losing any of the relevant impressions in that group.

Implementing a multiple retargeting approach is in fact a reasonable approach and will increase chances of getting the message through to the most promising users.

Case study

Let’s take a look at an RTB House case study. The data show that using additional retargeting tools is a good strategy that can bring an up to 80% increase in the overall retargeted traffic.

Problem: A leading fashion retailer implemented a multiple-retargeting strategy to improve traffic volume and increase conversion rates among its returning users. The client expected that two different retargeters working simultaneously would present better results without breaking budgets.

Solution: The ad space of RTB House provided additional user targeting possibilities, strongly supplementing the primary campaign. It allowed for much better, conversion-focused results.

Results: After engaging the second retargeter, the fashion retailer gained 101% more conversions and up to a 76% traffic increase. Both results were achieved from the combined retargeting activities in comparison to the period when they used just one retargeter.

Conclusion

To create an edge over competitors, it is important for ecommerce brands and marketers to consider taking the multiple-retargeting approach. Marketers need not worry about “cannibalisation” as the impact is minimal when compared with the positive influence of achieving overall higher returns, one of the key goals to every business’ success. Using different tools in parallel while managing payment conditions with each one will help maximise overall returns and ensure high campaign performance.

Daniel Surmacz is COO at RTB House.