I [Love|Hate] Retargeting! How to Know if Retargeting Works for You

Soren Ryherd, President, Working Planet #smx #34C

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About Working Planet

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Image property of FollowYu, Inc.

Greatest Thing Ever!

Money-Sucking Pit of Despair! “I love retargeting. It sounds cliche, but I

really do. I’ve seen it work time and time again and I geek out on performance marketing.” – Lauren Vaccarello, co-Author “The Retargeting Playbook”

“I hate retargeting with a passion. I run subscription services and what I find is that my own regular customers are just using ads from random websites to get back to my site to use their account. After just a few clicks I've already spent their entire monthly subscription.”

– In-House Internet Marketer

Retargeting: Good or Evil?

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Why the Debate?

Answer: Retargeting works (or does not work) based on core financial metrics, which differ radically from company to company

Retargeting? WTH?

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How Advertising Works

Cost of Media

Engagement Value Created

Feel free to apply this everywhere…

Basic Equation for Success

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Channel Leads CPL

Google 450 $125 Bing 50 $85 Organic 113 $22 Retargeting 215 $130 Facebook 35 $725 Billboards who knows…

Classic Channel Centrism

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Retargeting is NOT a channel! It is an add-on cost that is potentially justified by an increase in conversion Assessing retargeting as a channel is wrong, but very common given channel-centric tools

Really, just stop.

Not a Channel!

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How Advertising Works with Retargeting

Cost of Media

Engagement Value Created

Add-On Cost of Retargeting

Add-On Conversion from Retargeting

?

Doing the Math

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Retargeting is an attribution issue, but a really easy one to address and understand.

Non-Brand Search

Brand Search

Brand Search

Direct Conversion!

The “A” Word and User Behavior

Non-Brand Search

Brand Search

Non-Brand Search

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Retargeting ads increase awareness that can accelerate and increase conversion.

Non-Brand Search

Brand Search

Direct Conversion!

The “A” Word and User Behavior

Non-Brand Search

Brand Search

Non-Brand Search

R R

R

Conversion!

R

R

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Example Metrics (Bear With Me)

But wait.…

Retarg. True True

Channel Cost Leads CPL Conv Cost Leads CPL LIFT CR Leads CPL CPL ImprGoogle $56,250 450 $125 2.15% $17,290 133 $163 45% 1.48% 310 $181 $17.83

Bing $4,250 50 $85 2.45% $2,990 23 $145 56% 1.57% 32 $133 ($12.03)Organic $2,486 113 $22 4.88% $4,160 32 $59 35% 3.61% 84 $30 ($29.11)

Facebook $25,375 35 $725 0.35% $910 7 $751 110% 0.17% 17 $1,523 $771.50Pandora $5,625 45 $125 1.12% $2,600 20 $183 48% 0.76% 30 $185 $2.22Direct $0 135 $0 5.45% $5,590 43 $41 54% 3.54% 88 $0 ($41.41)Total: $93,986 828 $114 2.06% $33,540 258 $154 40% 1.44% 561 $168 $28

If No Retargeting

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Example Metrics (Part Deux)

The good stuff…

True TRUE

Channel Cost Leads CPL Conv No Retarg. w/ Retarg. No Retarg. w/ Retarg.Google $73,540 450 $163 2.15% ($9,698) ($6,040) $409,267 $601,460

Bing $7,240 50 $145 2.45% $552 $260 $43,765 $67,760Organic $6,646 113 $59 4.88% $10,070 $10,304 $123,070 $162,854

Facebook $26,285 35 $751 0.35% ($22,875) ($21,035) ($375) $26,215Pandora $8,225 45 $183 1.12% ($1,064) ($1,475) $39,983 $59,275Direct $5,590 135 $41 5.45% $13,149 $14,660 $131,494 $196,910Total: $127,526 828 $154 2.06% ($9,867) ($3,326) $747,204 $1,114,474

$1500 Value Per Lead$150 Value Per Lead

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Why is Retargeting an “Easy” Attribution Issue? Because we can easily test to understand the performance if retargeting didn’t exist in order to value it correctly.

Yay

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Lift is the gain in conversion from retargeting over the naturally occurring conversion of that audience.

How to Understand LIFT

Retargeting Segment

Retargeted Ad

PSA

3.31% Conv

2.47% Conv

34% Lift

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Case Study of Client with Great Results

•  138% Lift •  $1,943 Value Per Sale

Case Study: All Good

Results: +$184k in post-marketing revenue 412% ROI on retargeting investment

Take Home: High Lift + High Customer Value = Big Win

Retarg. True

Channel Cost Sales CPL Conv Cost Sales CPL No Retarg. w/ Retarg.Google $79,476 243 $327 1.82% $44,744 113 $511 $118,906 $347,929

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Case Study of Client with Poor Initial Results

•  14% Lift •  $273 Value Per Lead

Case Study: Optimizable

Results: Moved Retargeting from Hindrance to Help Take Home: Audience Segmentation Can Turn Numbers Around * Normalized for extrapolated equal spend

•  14% Lift •  $313 Value Per Lead

Retarg. True Channel Cost Leads CPL Conv Cost Leads CPL No Retarg. w/ Retarg.Google $45,476 590 $77 4.12% $22,113 410 $115 $95,813 $93,481

Retarg. True Channel Cost Leads CPL Conv Cost Leads CPL No Retarg. w/ Retarg.Google $45,476 511 $89 3.83% $12,113 257 $113 $94,825 $102,354

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Case Study of Client: “It’ll Never Work”

•  11% Lift •  $14 Value Per Sale

Case Study: Bleah

Results: $13k loss by adding retargeting Take Home: Reduced Opportunity to Segment + Lower Value = Hard Problem

Retarg. True Cost Leads CPL Conv Cost Leads CPL No Retarg. w/ Retarg.

$115,491 13,392 $9 6.76% $31,878 9871 $11 $53,417 $40,119

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•  Retargeting CANNOT be treated as a channel

•  Retargeting is, by definition, an attribution issue

•  Do the right math to calculate profitability

•  Low financial targets make it harder to do everything, and that includes retargeting

•  Test! Results vary widely by company and retargeting strategy

Summary

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Thank you Soren Ryherd soren@workingplanet.com @sorenryherd

WorkingPlanet.com 401-383-3600 @workingplanet

Thank You