Have you ever been sat at work browsing a website for a particular product on your lunch break, only to find that same product make its way to you as an Instagram ad later that day when you’re at home? You might even see the same product on YouTube or Facebook later that evening. In fact, the chances are you will see this product again and again until you finally make the purchase or delete your cookies.
This is an issue that many feel frustrated by about digital advertising and it’s known as retargeting. To be followed around the internet by the same advert being nagged to by a product you showed interest in once feels invasive and intrusive.
To make matters worse, 87% of marketers don’t believe that this type of advertising is effective, with 57% of consumers saying these adverts didn’t impact their decision to purchase the product.
So what is retargeting and how does it work?
In this example let’s use a pair of Nike trainers. There’s a specific pair of Nike’s that you’ve been waiting to come out and decide to use Amazon as your retailer as you know they have some good deals. When you arrive on the site you find the pair of trainers you want and spend some time deliberating on whether to purchase them. In this case, you choose not to.
When you visit Amazon, in the back end it drops a cookie on your computer. Amazon has then registered that product to your cookie profile and knows you are interested in this product. Amazon also knows that you’ve purchased three previous pairs of trainers from them before.
When you later go to a website that has advertising units you are essentially put up for auction. Not you, Janet Jones from London, but your digital profile based on your cookies.
Let’s say you’ve recently visited Amazon and Skyscanner. The new site that you land on has an advertising slot waiting to serve you an ad. Both of these companies mentioned know that you’ve shown some interest in their products as you’ve already visited their sites.
So they enter a bidding war to show you their product. They are trying to “retarget” you, which essentially just means show you an ad from the product you viewed. The bidding war is based on information that these sites have about you.
For example, Skyscanner know you’ve been looking at flights to Budapest and they know you’re a frequent flyer. Because of this they are willing to pay £1.25 to show you their ad. Amazon on the other hand have your purchase history and know that you absolutely love Nike shoes having recently bought three pairs. So Amazon believe that they have enough data to suggest that you will make this purchase soon and are willing to pay £1.40, which beats Skyscanners bid.
The Nike shoes from Amazon are then shown to you on whatever site or app you’re browsing.
When you finally make this purchase you have entered the bottom of the funnel and have “converted”. A pixel in the Amazon cookie then knows that you’ve made it to the confirmation page and it’s only at this point that the ads will stop being shown to you.
The only other way to stop this from happening is to clear your cookies or install an adblocker!
The State Of Advertising is a weekly address that discusses the digital advertising landscape and the problems that lie within it, and how blockchain is helping to solve it. The weekly series is co-authored by Alex Libertas from the Daily Chain, and Reggie from Gath3r.
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