Why Retargeting Is Huge Waste Of Money

Retargeting is a marketing version of “spray and pray” strategy.

Retargeting can be the biggest waste of money in your marketing budget.

Retargeting makes marketers look good and even more technical than we really are. In no way do I want to say that retargeting can’t be used effectively. However, most companies do it wrong.

The concept of retargeting itself does sound sexy and compelling — show ads across the web to people who visited your website or whose email you have in your database, and you’ll see them buying from you at some point. (Just kidding — it’s more likely they will just get annoyed with your company.)

Retargeting is a marketing version of “spray and pray” strategy.
Website visits and signups alone are not good triggers for a retargeting ad campaign. Neither of those actions identify a visitor as part of your target audience.

You have probably noticed that after visiting a website that has nothing to do with your job or your interests, you start seeing their ads in your Facebook feed. How does that impact your view of the company? Does it make you want to buy their product?

I visit at least 100 new websites every week as part of a research, education, curiosity or just by pure accident. 95% of these products and services aren’t interesting to me in any way and for most of them, I’m not their target customer. But week after week, I keep seeing the same banner ads all over my browsing path.

Why did a website visit become a trigger for retargeting ads? I’m not sure what the answer is, but if you use this visit as sole parameter for your retargeting, consider how much money you just spent on targeting your own employees who use multiple devices at work and at home.

When you meet someone at an event, how often do you check out the website of the company they work for? What are the chances you are part of their target audience?

The same goes for signups. A new article or PR about new series of funding can cause an influx of new signups, but how many of these signups match your target customer profile? What is the point of spending your marketing budget following an audience that isn’t likely to buy from you anyway?

Retargeting ads can be effective but only when you can clearly identify the prospects match your target customer profile. What are some triggers that can be helpful in this process?

Here are three approaches that are helpful in identifying whether a prospect qualifies for a retargeting ad campaign.

  1. An email indicates that the prospect comes from a company that is part of your target account list

When a signup comes from a list of domains that are part of your list of targeted accounts, retargeting ads can be very effective.

If your organization focuses on an account-based selling strategy where your sales reps have a list of very targeted prospects to go after, you can add all of these domain to your retargeting pool. Every time a new signup comes from these domains,unleash retargeting ads on them.

2. Social media login indicates a match

In a similar approach, if you use LinkedIn or Facebook logins, you can, in many cases, identify the prospect’s company and title and see whether they match your customer profile.

3. Visitor performed an action inside of your product that identifies that he/she is a target customer

This is the more common scenario. Not many prospects use their work email to signup for a free trial or to download a case study or another marketing asset, such as a whitepaper.

Hunt for trigger actions inside of your app, which indicate that the prospect is a part of the target customer profile. Look for actions that lead toward user activation.

Take, for example, Appodeal, a programmatic ad mediation solution for publishers. The action toward user activation, which hints that the prospect is part of the target audience is adding an app in the dashboard. This is the first step in the process of getting the SDK installed. Showing an ad to someone who has added an mobile app but hasn’t yet installed the SDK can be an effective strategy.

All other scenarios in retargeting ads are a waste of money. If you can prove otherwise with numbers,you are welcome to respond in comments.

Before we leave this topic, let me make a couple of final points.

Even if your retargeting strategy is based on more sound triggers versus just website visits or signups, you will do yourself a huge favor if your ads don’t go to a signup page or another generic landing page. Lead them to the content that will nudge them into the next step, whether it’s adding the SDK or getting a product demo.

Second, even if you use qualifying triggers while running your retargeting ads it does not always prevent you from low marketing ROI. Why? Because you are “hammering with repetitive ads desperately trying to intercept a purchase and earn some credit for something that was going to happen anyway.”

Don’t waste your precious marketing dollars on retargeting, but if you do, make an effort to improve your chances of higher returns with strategic prospect identification strategies.

UPDATE 5/16/16: Reddit isn’t buying my arguments — discussion is here.

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