Retargeting is a blessing for advertisers and a curse for data protection. For years, we observed an increase in the advertising market of so-called retargeting advertising.
The easiest way to explain re-targeting is to use the well known websites eBay and Amazon. Basically if you search both of them for a book on “lie detection”, you may find a few and have a look, but they may get distracted by a DVD that helps you detect lies. You may buy one or neither, or simply stop surfing. You will notice that when you next go to eBay or Amazon, you will see little ad’s for stuff that you looked at last time. This reminds you that you were looking to buy a certain thing, and (kind of) asks you if you still want it. They will also show adverts for similar products too. In the case of Play.com they will say, “if you liked this then you will love that!”. They will even have offers that go with combining purchases of frequently “bought together” items. That is the process of retargeting. It shows you what you want (even if you bought it already - in some cases) and shows you what you might want based on your browsing behavior.
The use of cookies is the condition needed for retargeting experiments. Once stored in your web browser, a cookie records certain information about your surfing behavior. Have you visited a shop and become interested in a book, for example, this information is stored in the cookie (including which books, how many you looked at and for how long). Go to a different site, however, that has the advertising from the same ad server, and this information is easily read from the cookie. If this is the case then you will see adverts that relate to your previous buying or browsing behavior.
If one believes current statistics, then the marketing business is actually seeing profit from this type of re-targeting. Looking at different target groups, we come to the conclusion that personalized advertising really matters. The click rates are much higher compared with conventional banner ads.
Since advertising on websites is still a red flag for many users, it is now perhaps clear why the advertising industry relies so much on re-targeting. It allows you to advertise much closer to the mentality of the individual customer. The success of a re-targeting campaign is also (with the help of certain tools) is clearly measurable.
There are three points that I should add to this:
Point 1 - Customers are more likely to buy via re-targeting, from websites that they trust. Picking up on the eBay example again, let’s say I have bought books from eBay previously, and now am looking for details on solar powered battery chargers, and whilst browsing a website, I see an advert for a cheap charger on eBay. I am more likely to respond to that advert, than a retargeted one from another website (even though both adverts are equally targeted and relevant).
Point 2 - Multiple users on a PC will distort re-targeting. So if my sister searches for panty liners, and then I (as a male) search for “blood soaked pc games”, I will not respond to a panty liner advert (even if they both involve the keyword “blood” or “soaked”).
Point 3 - Clever web surfers will delete their cookies regularly, because it can slow down your PC. Also, there are web security programs such as Norton Antivirus that will quarantine cookies with as little as a quick scan.
Of course there is also a reverse side, because retargeting is nothing more than spying on its citizens by large corporations (a bit like a Nectar card or Tesco Club card). The other side is represented strongly by prominent consumer and privacy advocates, who have already won a small victory in making sure that “good” websites (such as HSBC for example) will advertise their use of cookies on their websites.
The search engines will benefit more than any other company, because it increases clicks on their Adwords/ PPC campaigns. Google's main argument is always the anonymity of all data collected. Where will re-targeting go from here? Who knows.
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