If you are in the digital advertising space, chances are you have come across a very interesting recent study conducted by comScore and ValueClick entitled “When Money Moves to Digital, Where Should It Go.” Heck, we’ve referenced it twice already on this blog, and here I am bringing it up again!
The report does a great job of comparing view-through performance across a variety of display targeting strategies. But its primary thesis is that retargeting is the best targeting strategy to generate advertising “lift.” The report as a whole presents a lot of great data, but I can’t entirely agree with them on the efficacy of retargeting.
My contention is with the word “lift.”
It’s all well and good to say, as the study does, that retargeting has a 726% site visitation lift. But without context around what the lift was calculated against, that number is misleading. In this case, the 726% lift was calculated against a comScore panel representative of the entire U.S. Internet population. I have no doubt that the design of the experiment was exemplary, but what I am questioning is the appropriateness of comparing site visits from a pool of people who have already been to your site to those from a random pool, and then declaring a high retargeting “lift” as an advertising triumph.
To put it more plainly, I go to gap.com often enough on my own. I even have my billing information saved to ease the checkout process. I can guarantee that I am going back to make purchases on the site again soon, whether they serve me an ad or not. I am in the “retargeting” pool. My dad, who uses e-commerce solely to buy an endless supply of tech gadgets, is in the “random” pool. So when someone runs a study that shows retargeting generated a 726% higher site visit rate than random, I have to wonder how impressive that number really is considering that a chunk of those visits were going to come to the website anyway. The real question is how do we tease out the true incremental impact of just the advertising?
The best way to answer that question is to run a simple A/B test where you start with the retargeting pool — people who have already been to a brand’s website — and split them into two groups. The first group would be exposed to the marketer’s ads and the second group would not. The increase in site visitation of the group who saw the ads versus the group that didn’t represents the true “lift” or incremental value of the strategy.
At Media6Degrees we sometimes run tests like this to help marketers understand the true incremental value of our Social Targeting technology versus a pure retargeting strategy. As you would expect, especially given the comScore/Value Click study, retargeting typically renders a high raw conversion rate. However, things get much more interesting when we look at the incremental conversion rate. That is, the additional conversions beyond what the marketer could have gotten by doing nothing. Time and time again we see that the incremental lift of the retargeting pool is either the same or actually lower than the incremental lift of a pool built through Social Targeting. In fact, the most recent test we ran showed an incremental lift of 6% for the retargeting pool and an incremental lift of 76% for the Social Targeting pool.
Although this belies the findings of studies that look only at raw conversion rate, it is a much better barometer of advertising success that has the benefit of making a lot of intuitive sense. People who have been to your site in the past are likely to come back on their own without the help of marketing. So if you are a marketer interested in the bottom line, you want to spend your energy driving incremental sales rather than sales that would come in on their own anyways.
At Media6Degrees, we make this a priority with all our clients to make sure we are using the right mix of Social Targeting and retargeting to generate maximum incremental lift. And with an 80% renewal rate — we think it’s working!