Category Archives: retargeting

Why marketers know if you’ve been naughty or nice

santa watching

There is a story about a jolly old elf who tracks your behavioral data carefully, spies on you even when you’re sleeping, and runs algorithms to assess whether your actions are more positive or negative than social norms. Based on his calculation, the elf will reward you with financial gain in the form of material goods or will deduct from your status by tricking you with what looks like material goods but in reality turns out to be lumps of coal. The system is extensive, including a database of every youth in the world, and is updated annually. If you don’t like this surveillance, good luck: The elf’s privacy policy is unpublished, the observational data cannot be accessed by individuals, and your only recourse to correct misinformation is to send handwritten postal mail to the elf’s address at the North Pole.

Perhaps these childhood stories are why people often freak out about data. The legends of people recording others’ actions, especially those of children, as a form of behavioral modification have been with us for millennium. In Bavaria, the Santa myth is actually split into two figures, a Saint Nicholas who rewards good children with gifts and a devilish, horned Krampus who punishes bad children. Japan has a similar tradition, with an Namahage figure played by men wearing huge, ugly masks, who knock on doors and warn children not to misbehave. Religion is filled with data tracking, starting with God watching Adam and Eve’s naughty apple-biting in Eden, moving on to the widespread but vague idea that somehow all of your actions in your lifetime are being observed for a final post-death judgment. In our deepest beliefs, we perceive there is a connection between what we do, how others record it, and how we will be rewarded.

Which brings us to marketing surveillance 

If you collect enough data to form a baseline for comparing people, you end up with a “database” — and this idea has been around for at least 400 years.  In America in the 1600s, clergy tracked births, marriages and deaths; officials called “tythingmen” would also enter homes to inspect families for observed moral behavior. The first consumer database in the United States was set up in Massachusetts in 1629 to track property ownership. As data expanded, intrusions did too. In the early 1700s, U.S. postal mail was opened regularly to spy on message content.

And then marketers figured out they could make money from all of this information. Database marketing started in the 1940s, first driven by direct-mail marketers (who needed target lists of consumers to mail things to and then calculations to see what worked), later by credit-card companies and banks (who rapidly learned that not all consumers have the same credit risk), and then in the 1990s by Internet marketers who realized they could measure a treasure trove of consumers’ online behavior. While the basic approaches are the same — identify potential customers, differentiate by their value to you and what they need from you, continue to gather more information through interactions, and then customize your response — the cycle time of data marketing increased. Direct mail list updates used to take months; if you purchased a pair of boots at a store in December, it might be March before another company’s boot catalog showed up in your mail. But the Internet enabled a cycle time of identification, differentiation, interaction and customization within days, hours, and now even seconds. Visit zappos.com, look at shoes, don’t buy them, and you’ll see ads for similar shoes on other web sites within seconds. The prevalence of such digital “retargeting” has gotten so rapid that many consumers are beginning to freak out.

The systems are growing ever-more sophisticated. Digital media vendor Rocket Fuel has begun testing device fingerprinting to track consumers by their individual mobile phones; in a recent campaign for Brooks running shoes, it identified the mobile devices of everyone standing along the running route of the New York City marathon, and then later served ads to those devices for running equipment long after the crowds had dispersed to Baltimore, California or even foreign nations. Digital marketers can pick up the IP address of a home’s Wi-Fi connection, and then retarget multiple devices — based on a trigger of one person’s behavior — across the many iPhones, tablets and computers residing in a household. Creative-based retargeting is another digital approach in which banner ads or online videos can be retargeted based on a single ad appearing on any web page, whether or not a consumer clicks on it; for marketers, this provides the advantage of being able to “lift” a publisher’s audience, such as a reader of WSJ.com, and chase that individual around the web later with a pretty good idea of their demographic profile based on the original reading material.

Consumers are rebelling, so what is the balance?

Not everyone is happy about this. Early in 2014, a survey by Truste, a global data management company, found that 74% of Internet users had increasing worries about the use of online data. While only 38% expressed worry about government surveillance, 58% said they had concerns about business use of their personal information. Beyond simple consumer annoyance, the growing use of online data may actually be harming marketing results. 83% of survey respondents said they were less likely to click on an online ad due to privacy concerns. In a deeply ironic circle, the data collection sophistication used to make online marketing work better may actually be depressing response rates.

Smart marketers are recognizing this and beginning to tone down the creep-factor of retargeting, using tactics such as impression caps, dayparting, ad creative versioning, and opt-out options to allow Internet users more breathing room before they are inundated with braying offers.

Data tracking will not ago away, because it is how all of us assess the outside world to calibrate our actions. Marketing in particular is all about treating different customers differently, as the great Don Peppers once wrote — after all, if you have unique needs, you should receive messaging about products or ideas that appeal to your interests, and marketers who play this right will gain greater results from their advertising investments. Just as parents and Santa Claus watch over children to assess behavior, other people will always be watching you too. The practice isn’t creepy in and of itself; what has gotten scary is the instant cycle time it takes someone else to pass their judgment. For our clients, we recommend looking beyond just response and conversion rates to also assess the real end customer experience. You’re trying to share information that benefits the customer, so pace yourselves, people. Everyone likes an elf who brings presents, but we all get nervous if he’s watching us too much.

Why Facebook should sell ads outside of Facebook


Back in January I noted Facebook has a frequency problem — the basic fact that every Like happens only once, and one touch is not enough to spur consumers to action. In advertising, frequency is the number of times you reach a person with a message, and in study after study a frequency of 3 to 4 ad impressions per week is required to break through resistance to get people to respond. This typically maximizes the “response rate curve,” as shown above. So the basic problem with Facebook “Likes,” the one click of a human saying she digs your product, is that it is only one real impression. What happens next?

Which brings me to the solution — Facebook should sell retargeted advertising outside its Facebook ecosystem. This wouldn’t be hard to do; Facebook would simply tag the computer of any user who “Likes” something with a cookie, and then via partnerships with ad networks or direct bids into ad exchanges, Facebook would enable the serving of downstream ads against that user.

This would provide an incredibly powerful new ad format, combining social media engagement (one Like) with multiple followup contacts (banner ads served across the Internet to maximize frequency) to drive real response (which is not a silly “Like,” but rather when someone actually buys your product).

But it would mean Facebook would have to admit users do things outside the Facebook ecosystem.

The downside is this would remove the perceived brand imperative that you must build response mechanisms inside Facebook, just as 10 years ago you had to have keywords inside AOL. Sad. Because Facebook serving retargeted ads outside of Facebook would work beautifully. What do you say, Facebook, want to give integrated advertising a try?

Ben Kunz is vice president of strategic planning at Mediassociates, an advertising media planning and buying agency, and co-founder of its digital trading desk eEffective.


Out of context: Google’s new ad retargeting


Google has launched advertising retargeting. So what does it mean?

The new ad program, like most Google innovations, is deceivingly simple. Now when you search for a term at Google.com, say “golf equipment,” you’ll not only see text ads for golf stuff next to your immediate Google search results, but hours later Google will continue to serve you golf-related ads when you surf over to news sites far from the Google search window.

The path of consumers responding to ads is very fragmented, and Google appears to realize it’s often more than search-click-buy. While Google is best known for its AdWords “sponsored link” ads that drive billions in revenue by popping up next to search results, it also runs an AdSense program that places similar text ads on web sites based on the editorial material in the copy. AdSense is a way for web publishers to make a little money, but has always been the ugly stepchild next to AdWords, largely because contextual placement is difficult for any computer algorithm to get right. An article on “raging fires sweep through California” could attract context ads for “hot hotel deals in Los Angeles.” Contextual advertising often misfires so badly that some bloggers call it madness.

But by tapping data from the user’s recent searches, Google can make contextual ads far more relevant. Now, it doesn’t matter as much what material is inside the article; what counts is your recent interest in a specific series of products. A cynic might say this is Google’s way of admitting contextual ads don’t work. Marketers may rejoice as these ads start getting better results. Either way, be careful what you search for … because Google is watching and will remember.

Image: Gin Able

Retargeting Crazy Heart


Two days ago we clicked on a New York Times review for Crazy Heart, the Jeff Bridges film gaining huge Oscar buzz. Soon banner ads for Crazy Heart started following us everywhere. It’s possible that Fox Searchlight Pictures has launched a massive online media buy, so everyone is seeing lots of banners, but far more likely we’re being retargeted.

Retargeting is a simple online trick in which banner ads are served to users who are previously identified as interested in a product. You can launch them in several ways: (1) if someone visits a web site, you cookie their computer; (2) or, more interesting, if someone only sees a banner ad — and doesn’t even click on it — the banner can still tag that user’s computer so that he or she gets served additional banners elsewhere. The second approach is called “media retargeting” and is a bit surreal for the user experience; after all, you don’t even have to touch the original banner ad to be tagged and chased with followup messaging. So in this case, we suspect:

– Fox Searchlight bought banners to be placed next to the online New York Times’ film review.
– Fox Searchlight then included an invisible pixel in the animated banner that tagged our computer when we read the review.
– Now knowing that we have interest in the film, Fox Searchlight serves us additional banners when we enter other web sites such as Salon.com by buying into an ad network (ad inventory on a vast collection of other web sites).

Retargeting risk vs. reward

Retargeting is clever (and honestly, we’ve recommended retargeting for our own clients using ad networks such as Value Click and Fetchback). It essentially lowers online ad costs by 50% or more, because the cost of subsequent impressions is much less than the original expensive media buy on a top site that kicks off the sequence.

But retargeting also carries risks. If rules are not set up to limit the number of impressions given to the user, the vibe becomes one of stalking — OMG, that product is following us everywhere! The second risk is it’s still easy to chase the wrong computers. A year ago we researched nursing homes for an aging relative and began receiving ads for Viagra and wrinkle cream, and laughed ’cause we’re not there yet. The third risk is for publishers, who may lose their value as online marketers learn how to “steal” their audiences for future ad impressions on other web properties; after all, why spend big bucks to advertise on a marquee site such as NYTimes.com if you can serve the same ad to the same audience later, via retargeting, on a less-expensive site?

As online media and Internet gadgets continue to fragment, we expect to see such individual targeting continue. Just be careful not to stalk customers too far; if they pick up they’re being watched, they could go crazy.

How online publishers can stop ad revenue from crumbling


A day after the Associated Press practically accused Google of stealing its content, Google CEO Eric Schmidt stepped before the Newspaper Association of America to explain his vision for the future of journalism. Yes, advertising will still work, Eric predicted, but the internet will continue to break down some ad models that rely on scarcity, because on the internet everything is ubiquitous.

What, oh what, can online publishers do in this cruel new universe where marketers can target customers online without paying high prices to web publishers? Why, get clever. Here are four ways publishers can defend their ad pricing.

1. Decommoditize your readers. Yes, marketers will use technological tricks such as retargeting to serve ads to publishers’ readers without paying the publishers themselves. But publishers who add additional data about their readers could continue to charge high CPMs. Surveys, sign-up questionnaires, click-streams within a publishing network can all pinpoint audiences that are prime targets for marketers. Surely there is information inside the publishers’ walls that can add value to justify higher ad rates.

2. Contextualize your content. Bloomberg.com, for example, offers a stellar closed advertising system in which marketers can target banner ads to certain keywords in ad copy, or within site searches. Brands are willing to pay for context that makes sense.

3. Band together. We received an idea from the vice president of a national news magazine that certain online publishers could form a group to resist behavioral targeting, or at least compare data sets among their readers to add unique value to marketers. The groups could align like-minded news organizations, industry verticals, or even customer verticals. Imagine, for example, a series of publications that encouraged retargeting only within their content networks — perhaps even allowing noncompetitive advertisers to target each others’ similar audiences. An insurance company wanting to serve banners to affluent men could chase respondents to an expensive men’s watch brand, and vice versa.

4. Forecast results. Come on guys. We research media on behalf of marketing clients, and every time we ask an online publisher for forecasts on basic performance measures — click-through rates, conversions, traffic, sales — we get a dazed, hurt look. “Results? Um, we don’t discuss results…” Until your salespeople can tell us what advertisers will get by advertising on your web sites, we’ll be tempted to put the money elsewhere.

Some didn’t like our recent BusinessWeek column suggesting ad rates will plummet for marquee web sites. We say, don’t ignore the future. Dig deeper. Data cuts both ways, and if you play it right, you can charge for it. Hat tip to Miconian for inspiration.

Photo: Amanky

Behavioral targeting grows by slashing banner costs up to 93%


If you are looking for a customer, in the past you had to peer through a publisher’s window. A marketer trying to reach upscale men interested in finance, for example, would logically place ads in The Wall Street Journal. Marque publications and web sites controlled elite, special audiences, so the ads weren’t cheap.

Ah, but this model is changing, and the dark irony is web publishers may face the same threats that newspapers do today. New online tracking systems are beginning to connect the dots about everything you, as an individual, do online — and now they can serve ads by placing cookies on your computer, following you across thousands of web sites, and forgetting about the marque publishers that used to control niche audiences. OMMA predicts that by 2012 nearly one-quarter of all U.S. display ads will use behavioral targeting.

The trend is growing complex and war-like. ValueClick, for example, is one retargeting network with more than 13,000 web sites. Clients who place an invisible pixel inside a Flash banner ad can then place that ad on a marque site — for example, WSJ.com — to trigger ValueClick retargeting. When a consumer visits WSJ.com, they may not click on the banner ad, but the ad puts tracking onto that consumer’s computer — and then a series of subsequent ads can “chase” that individual consumer every time they enter the broader ValueClick network of other web sites.

Whoops, WSJ. The retargeted ads cost less.

This is delightful for advertisers because the retargeted impressions cost only a fraction of the original, expensive, marque site ad. Consider that some WSJ.com banner ads cost $60 or more for each 1,000 ad impressions; ValueClick’s retargeting costs less than $4 per 1,000 impressions against the same audience. If you are an advertiser, you just figured out how to reduce your costs by 93 percent. But how does The Wall Street Journal feel about an outside force identifying, and in a sense, lifting away its precious readers?

We’re researching these new trends, and how major online publishers might defend themselves, for a future national news column. If you have your own ideas, please share. The cost savings are obvious; the strain this will put on broader online publishing and ad revenue models is far more complex.

Photo: Simon Pais-Thomas

You’re way, way off. Except for the wrinkle cream.


Three weeks ago we searched online for nursing care options for an aging parent. Now, every time we hit Slate.com we get served text ads like these — for Viagra, arthritis, retirement homes and joint creams. This is called ad retargeting, when advertisers chase you around the web after you (apparently) identify yourself as a prospect interested in their service.

Dudes! We’re still relatively young and use words like “dudes”. Haven’t these online ad networks ever heard of customer modality?

Ad retargeting chases your tire-kickers


Business 2.0 offers this nice graphic explanation of how ad retargeting works online. We love Business 2.0.

This approach on the web is similar to chasing “unsold leads” in the real world. When consumers hit your web site, but don’t buy, you serve them ads in the future on other sites trying to bring them back. Fetchback and several online ad networks can do this. Wish my Golden Retriever could, too.