I’ve personally ran over 100 Retargeting Campaigns. Here’s what I’ve learned.
I learned a lot about Retargeting in my two years at AdRoll.
From cold calling workshops to product launches to client meetings I was completely ingrained in the world of programmatic advertising.
One of the recurring themes during my time at AdRoll was the amount of misinformation advertisers and businesses had around Retargeting. I hope this article will shed some light on the how to build a successful campaign from the ground up.
I cover a lot here so if you have any specific questions please feel free to reach out to me and I will gladly answer them!
1. Hone in on your KPIs and stick to them
I’ve taken hundreds of new business calls and have seen many of them through to high performing campaigns.
The most important determinant of a successful campaign is an advertiser’s ability to identify a realistic KPI and stick to it when evaluating campaign performance.
How do we go about this?
First, let’s define a few basic KPI’s that are used to evaluate performance:
- ROI (Return in Investment)- Attributed Revenue / Campaign Cost. Many advertisers seek to use this is an indicator for success but are often surprised when campaigns don’t perform as well as expected. Why? It’s hard to scale. See this article for context. While the strategies are effective for achieving an ROI, they aren’t as effective for reaching all of your users. It can be good for the short term but hinders your ability to grow your business in the long term.
- CTR (Click Through Rate)- Impressions Served / Clicks to Website. There continues to be an obsession with CTR in the digital marketing world even though it doesn’t align with the relationship that individuals have with display ads. Many CMO’s and more senior marketers got their start in a world where Search was everything. What’s the best way to evaluate Search ads? Clicks. When somebody is searching on Google their intention is to clicks on ads. However, is their intention to click on a display ad? CTR for display ads (and Retargeting) are abysmal when compared to Search. Take this into account when evaluating performance.
- CPA (Cost Per Acquisition)- Campaign Cost / Attributed Number of Conversions. This is a very helpful KPI for lead generation sites that have data on how many leads turn into a conversion and then can reverse engineer a number that will keep them profitable. Similar with ROI, having a low CPA goal can hinder your ability to scale. However, it is a simple metric to pay attention to.
- CPM (Cost per Thousand Impressions)- This is a great indicator of brand awareness. However, many advertisers do not use this as their main KPI. It is important to pay attention to when your other metrics aren’t up to par. One thing to keep in mind- your CPM can be a reflection of the quality of the audience you are bidding on. You can expect to pay a higher CPM for low hanging fruit (like cart abandoners) than you would for somebody who has never visited your site.
Taking a SMART goal approach to determining your main KPI is beneficial because it gives you peace of mind. You won’t be stressing about your campaign performance 24/7.
If you aren’t familiar with SMART goals check out this short video to learn more. Let’s apply it to Retargeting!
SMART Goal- Maintain a 2X ROI Goal for the month of April.
This goal is specific, measurable, achievable, realistic, and time-bound.
Just like looking at the stock market every day, paying too much attention to campaign performance can be stressful and unnecessary. Using a proven framework and taking a methodical approach is the way to go.
2. Determining an Optimal Budget
As an Account Manager at AdRoll my salary was directly based on my ability to grow my book of business. A major part of that was creatively up-selling clients and finding hidden budget (I got pretty good at this).
While scaling your campaign can certainly make sense for your business, there are a few simple ideas to keep in mind when determining a Retargeting Budget.
- Audience Size- Retargeting existing site visitors is very different than targeting prospects that have never been to your site. Why? Because there are a finite amount of people visiting your site. Your audience is clearly defined. If your budget is too high you will be sending way too many ads to a small subset of users and your performance will suffer. If your budget is too low you will only be bidding on high intent users and ignoring valuable site visitors that aren’t as deep in your funnel. Your goal is to find a happy medium.
- Your KPI- Many advertisers are only concerned with a high ROI- and this makes sense. The thing to understand here is that Retargeting can certainly achieve this but it will be to the detriment of long term growth. The bidding software will effectively avoid showing impressions to prospects if it doesn’t immediately result in a conversion. If you want to scale campaigns and run an effective full funnel strategy you should reevaluate your KPI when it doesn’t align with this goal.
- Frequency Capping- This helps set a limit on the amount of times an individual prospect will see an ad. For those unfamiliar AdHawk has a great article on it. For the most part we wouldn’t recommend Frequency Capping and would tell clients to let our bidding engine do it’s thing. However, this can be extremely helpful for businesses that have a large amount of traffic and a budget that can’t effectively target them all.
TLDR- Your budget should be a reflection of your long term goals and leave room for scaling. The best marketers will start with a baseline that allows them to hit their KPI realistically and then scale when performance exceeds expectations.
Many people don’t know this but the world of digital marketing is like one big stock market. There are buyers (you the business owners, and you are spending a LOT of money) and sellers (FaceBook, Google, Publishers, Bloggers, Apps).
Companies like AdRoll have invested millions of dollars into building complex bidding machines that take in thousands of intent signals to determine the optimal price to pay to show a customer an ad.
Here are just a few intent signals that are used to make this calculation
- Time Spent on Site
- Number of Pages Viewed
- Specific Pages Viewed
- Sites Visited after leaving the Website
- Duration since Last Visit
- Items Purchased in the past
One of my favorite scenes in The Patriot is when the British are trying to find out as much information about Benjamin Martin as possible.
His neighbor ends up being a traitor and tells the British Soldier “I could tell you the size of his boot”.
Online advertising isn’t there yet- but it’s getting close.
The takeaway for business owners looking to leverage these tools is to optimize your strategy so that the bidding technology can shine.
How do you do this? By understanding that the more information the bidder has to take into account the better it will perform. This is counterintuitive as many advertisers will recommend running very specific niche campaigns.
Start simple and then optimize once your data begins to tell a story.
There’s a reason that AdRoll has an entire team dedicated to Ad Operations. Programmatic is complicated, and I wouldn’t have survived without the help of my ad ops specialist (shout out to Lisa. She’s a boss).
Google and FaceBook have best practices on Campaign Segmentation and AdRoll does as well. The way your campaigns are segmented will impact where your budget goes and how your campaign performs.
You can have a great KPI and an effective budget but if your spend isn’t going in the right places you will lose.
I worked with advertisers that were spending upwards of $50,000 a month on Retargeting. These were folks that had sites that were getting millions of visitors and had very complicated segmentation strategies in place.
If you are just getting started a simple strategy would be to segment your Retargeting campaign like so:
- Low Intent- Individuals coming to your website for the first time or that have viewed 1–3 pages
- Mid Intent- Individuals coming to your site that have visited 3 or more pages
- High Intent- Individuals coming to your site that have visited 3 or more pages, visited a specific product page, or put an item in their cart
Your KPI, Budget, and Bidding Strategy will determine how your budget is allocated.
Remember what I said about ROI before? If you have an unrealistic ROI goal all of your spend will go to High Intent.
This matters. The goal of Retargeting should continuously moving customers down funnel.
I’ve said this before but it continues to remain true:
If you are spending all your money on the cart abandoners, you will eventually run out of cart abandoners.
“Creativity is the variable of success”- Gary Vaynerchuk
What would an article written by me without a Gary Vaynerchuk reference be? Sorry- it’s a recurring theme :/
This is the way to think about it:
A customer has visited your site multiple times and is now hopelessly scrolling on FaceBook (as you do). What’s the message you want to share with them?
A couple things to keep in mind:
- You may want to show different creative to upper funnel visitors compared to bucket abandoners. Throwing out a discount code to those low hanging fruit could be the ammunition you need to close the sale.
- Dynamic Retargeting. You can leverage specific products or pages your customers have viewed and show them ads based on this data. It makes sense that somebody who looked at a specific shoe should be shown that shoe. What also makes sense is that somebody who recently bought a shoe could be shown some shoe laces.
- Image matters. Copy matters. Inventory Matters. This isn’t a one size fits all model. People behave differently while scrolling on Instagram on their phone than they do when they are reading an article on their Laptop. Act accordingly.
The basic concepts of running a Retargeting campaign have remained stable over time.
However, the opportunities to show ads in more places are continuing to grow. Static Ads, Video Ads, Chat Bots, VR. There will more and more places to interact with prospective customers.
Your responsibility as a marketer is to stay top of mind with your potential customers while respecting the experience they are having online.
Inform, but don’t annoy. Remind, but don’t interrupt.
By far the most complicated part of digital advertising today.
No one seems to understand it and the majority of the top companies of the world continue to run antiquated models that don’t reflect the current media landscape.
If you aren’t familiar with all of the different models The Next Web has an article that gives a great overview.
It can get complicated very fast and this article is about what I learned so that you don’t have to. That being the case- let me break it down.
Your attribution model determines which marketing efforts led to a purchase. The prevailing model in digital marketing today is Last Click but it is dying a very very slow death.
The most effective way to evaluate Retargeting marketing is to take both views and clicks into consideration.
Why? people don’t click on ads.
In fact, a study done in 2008 showed that 6% of the online population accounts for 50% of all display ads clicked on.
There hasn’t been any significant research done since then, but there doesn’t have to be.
Try to think about how many ads you see in a day. When’s the last time you clicked? It’s probably been a while. What’s more important is the ad that influenced you to buy. Can you remember the last ad you saw that led you to make a purchase?
Your attribution model is going to determine how your CPA and ROI is calculated. If you are a small business, take a common sense approach and align your model with the way customers interact with display ads.
Optimizing for individuals who click and then purchase is ignoring over 90% of your potential customers. Don’t make that mistake.
7. Evaluating Performance and Making Optimizations
Let’s take a second to review.
*You’ve determined a KPI that fits within the SMART goal framework
*You have a budget that your comfortable with and allows for some wiggle room
*You’re segmentation strategy is set up so that your users are bucketed properly and
*Creative is top notch. You took everything into consideration to make sure you stay top of mind and show your customers beautiful, engaging ads.
Your campaign has started. Now what?
Just like a Doctor asking a patient for their symptoms, bad performing metrics are symptoms that an experienced marketer takes into account to make a prognosis.
- If your CTR is low there could be a problem with your creative
- If your CPM is high your audience could be too small
- If your ROI isn’t what it should be there could be a problem with your landing page
Conversely, good performing metrics can also be a cause for concern (or an opportunity to scale)
- A very high CTR indicates that you are targeting a very specific audience and have the opportunity to scale
- A low CPM could indicate a low quality audience (and could be cause for concern if you aren’t seeing a lot of conversions)
- A very high ROI could mean that there is a problem with your attribution or that your budget isn’t big enough
There are always plenty of optimizations to make (again why Ad Ops are all start and have saved my life).
Regardless, spending too much time in the data can torment you.
Choosing a framework from which to evaluate your campaign and checking in intermittently (not every 10 minutes) will lead you to success and help you to make better decisions.
Rig the game so you can win. Allow the campaigns to do their thing and have regular check ins. When fires arise, put them out.
If one day of bad performance or no conversions is the end of the world you are probably spending too much money anyway.
Retargeting remains one of the most effective marketing strategies to convert low hanging fruit and more marketers (especially small businesses) should understand it.
The principles that work in other marketing channels (full funnel, great creative, landing page optimization) all apply to Retargeting. If you understand a few key things you can run a successful campaign.
You’ve come this far, so allow me to lead you with a few quotes that can help to inform you strategy:
“Patience and perseverance have a magical effect before which difficulties disappear and obstacles vanish.”- John Quincy Adams
In a crowded marketplace, fitting in is a failure. In a busy marketplace, not standing out is the same as being invisible.”- Seth Godin
Happy Marketing :)