How do Consumers Perceive Retargeting Ads?

How do Consumers Perceive Retargeting Ads?

This brief provides information showing that retargeting ads is an effective marketing tool that can create positive consumer perceptions and response behavior. Retargeting ads increase the probability of users returning to a company’s website and engaging more with the website. There is about 43% chance visitors to a company’s website who are retargeted to become customers and there is a 70% chance that they’ll purchase a company’s product.

Research Findings by Navdeep Sahni and Others

  • A study conducted by Navdeep Sahni of Stanford University and others showed that retargeting ads increase the probability of users returning to a company’s website and engaging more with the website.
  • The study revealed that the impact of retargeting ads is highest during the first week after a user has visited the website and that the impact of retargeting ads in the second week is highest if there was a retargeting in the first week.
  • Navdeep S. Sahni and colleagues suggest that it is particularly important to retarget ads in the first week after a consumer visits a company’s website and that retargeting later may not have a significant impact.

Findings by Christoffer Johansson and Patrik Wengberg of Uppsala University

  • Christoffer Johansson and Patrik Wengberg of Uppsala University reported that retargeting ads and especially dynamic retargeting had a positive impact on consumer engagement and purchase behavior.
  • According to Christoffer Johansson and Patrik Wengberg, retargeting that is done immediately after a user has visited a company’s website achieved about 3.4% higher banner click-through rate and the conversion rate was about 13% higher.
  • Companies that do retargeting ads are likely to produce a return on investment (ROI) that is about 62 times higher than for companies that do not retarget.
  • The retargeting technology should be designed to recognize users across different devices because about 72% of buyers used about 2 devices and switched about 3 times before purchasing.

CXL Case Studies

  • CXL provides several case studies on companies that used retargeting to attract clients to their offerings, including World First, Myfix Cycles, Total Wine, Mazda, and WatchFinder.
  • World First reported that by retargeting ads, it reduced the cost of customer acquisition by about 99% and increased full account sign-ups in Australia by about 105%.
  • Myfix Cycles realized that retargeting frequency of between five and seven times had the best effect on customer acquisition.
  • Total Wine indicates that as a result of retargeting ads, it realized a yearly revenue increase of about 21%, a lifetime return of 6:1 on ad spend, and about 50% rise in reach annually.
  • Watch Finder reported that by using retargeting, it realized a return on investment of about 1,300% in six months, and its mean order value increased by about 13%.

Spiralytics’ Statistics

  • Spiralytics reports that only about 2% of buyers convert on the first visit to a company’s website and retargeting enables companies to bring back the remaining 98%.
  • About 25% of website visitors are happy to see retargeted ads because the ads make it possible for them to gain a better understanding of a company’s products and services.
  • There is about 43% chance visitors to a company’s website who are retargeted to become customers and there is a 70% chance that they’ll purchase a company’s product.
  • Studies indicate that the click-through rate of a retargeted ad is about 10 times higher than the click-through rate of a conventional display ad.

Meazy’s Report

  • According to Meazy, retargeting ads will benefit a company in various ways, including enhanced brand recognition, providing an opportunity for a company to make multiple impressions to a customer, and creating a platform for cross-selling.
  • Retargeting makes it possible for a company to set its campaigns to focus on a specific audience from among the users who visited its website. This specific audience is then retargeted with relevant ads.

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