What Is Online Ad Retargeting, How Does It Work And Is It Too Creepy?

One of the more recent hot topics that has the online advertising community buzzing about is the idea of ad retargeting. Whether you’ve ever noticed or not, you’ve most likely been on the ‘retargeting end’ of one of these behavioral based campaigns, but don’t feel bad, it’s nothing too personal (and it’s only becoming more and more popular).

To better help explain what ad retargeting (or ‘remarketring’) is, let me give you a real world example of what this type of ad technology can do for advertisers, publishers and retailers:

You go to Google and search for ‘new BMW convertible’, which leads you to land on this BMW page that tells you all about the new M6 convertible. Not a bad looking ride, eh?
You take a look at the page for a while, but just like 98% of most web-surfers you don’t take any action on the page (email a dealership, download vehicle info, search for local dealers, etc.) and you take off to another page that you also found on search.
Well, unknowingly to you (and most other online shoppers), BMW ‘dropped a cookie‘ on you, which basically means that they stored a little piece of data on your computer that says something like ‘this person is looking for a new BMW convertible’. This piece of data is small, but very powerful and can be used to follow your every move on the web for up to several days and even weeks.
As you surf around other websites you may or may not notice that there is an increasingly odd amount of BMW ads that seem to be popping up everywhere. If you do notice these ads following you around, you might think that it’s just a coincidence, but believe me — it isn’t.
The intended goal of these retargeted ads are to follow you around long enough to where you eventually make your way back to the original site that you visited so that you’ll make a purchase, download some information or any other action that they would like you, as a potential customer, to do.

Image credit: AdRoll.com

This is a fairly simple, yet accurate example of how a website could use retargeting as a way to increase their advertising ROI and as this idea continues to spread across the online advertising world (it’s still very under-utilized), you’re only going to be hearing more and more about it. Of course, like with most innovative targeting technologies, ad retargeting is getting it’s fair share of negative press and there are plenty of privacy issues that need to be figured out.

But, with major attention being given to it by major ad players such as Yahoo!, ad retargeting isn’t going away anytime soon. Is this good or bad for the overall online ad industry and the millions of people who will be served these retargeted ads? Only time will tell, but studies show that it seems to be working, so we had better get used to it for the time being.

More info about ad retargeting:

A great video demo from FetchBack about how ad retargeting works
Some potential pitfalls of buying ad retargeting from ClickZ
An ad retargeting piece on imedia that was written in 2006 (yeah, 2006)
A great explanation of how AdRoll does ad retargeting for their customers

If you have any other questions about ad retargeting, I’m sure that we can get you an answer. Just leave anything you have for us in the comments below.

December 11 | Filed Under Advertising