Retargeting: A growing trend in advertising

The US travel industry will spend US$3.35 billion on online advertising this year, a 14% increase over 2012, according to eMarketer. When it comes to optimizing the results of ad campaigns, some methods, like retargeting, generate truly impressive results.

What is ad retargeting?

Ad retargeting, also known as remarketing, is a behavioural segmentation strategy that leverages browsing data. When visitors leave a brand’s Website, a cookie is placed on their browser, which means they will subsequently see banner ads from this same brand when navigating on other sites or search engines (see image below). The business thus boosts its return on investment for advertising by targeting these potential clients, who are more likely to purchase than those who are unfamiliar with the brand.

Source: LaPresse.ca

the placement of the ad is less important than the person targeted.

As Andy Kauffman, Vice President, Global eCommerce Marketing at Marriott, explains, the placement of the ad is less important than the person targeted.

Different types of ads

The three types of banner ads present different content:

• • The first displays just the brand, with a slogan that is catchy but not personalized. This generic banner reminds consumers of their visit to the site.
• • The second features the most recent product viewed by the searcher before leaving the site. This type of banner can be used to target visitors who failed to make a transaction or else abandoned their shopping cart before purchasing. Since visitors like these were very advanced in the buying process, it may be easier to convince them to make a purchase. The brand may also offer a discount for the product in question.
• • Finally, the third type of banner shows products similar to those viewed or purchased. Banners like these are the most relevant and personalized, because their content responds to the interests of the individuals targeted.

Real-time bidding

Real-time bidding (RTB) platforms for the sale and purchase of advertising space make retargeting even more effective. Known as ad exchanges, they operate according to the needs of advertisers and the availability of publishers. According to online marketing firm Mediative, RTB enables buyers to assess the value of an ad impression in real time and determine its current relevance to their campaign. Publishers no longer have to set a price in advance for a predetermined number of impressions, while buyers can purchase advertising when the current bid meets their budget.

Available to a variety of businesses

businesses with relatively modest budgets can give the impression of advertising across the entire Internet

Josiah Mackenzie, Director of Business Development at ReviewPro, notes that the primary advantage of retargeting is that businesses with relatively modest budgets can give the impression of advertising across the entire Internet. While there are specialized firms such as AdRoll, ReTargeter, Mediaforge and Criteo working in the field, businesses can also create their own retargeting campaigns using the Google Display Network to publish ads on affiliated sites or the search engine itself. In addition, this system offers users the option of targeting different customer segments (e.g., customers who have made a purchase in the last 30 to 90 days, customers who have previously taken action on a site, etc.).

In the travel industry, Expedia offers retargeting to its clients (hotels, airlines, etc.) through its marketing service, PassportAds. Banner ads are then displayed on selected sites or on Facebook, and videos can be posted on YouTube as well as major news sites, with the goal of directing consumers to the advertiser’s site.

Source: advertising.expedia.com

For example, the Las Vegas destination management organization used this tool to boost reservations for its member hotels listed on Expedia. The campaign enabled it to increase its return on investment for advertising expenditures by 120%.

Does retargeting work?

According to John Hach, Vice President, eMarketing Solutions, for TravelClick, retargeting is more effective than traditional advertising. Max Starkov, President and CEO at Hospitality eBusiness Strategies, maintains that Google retargeting campaigns generate more revenues for the hotel industry than the Google Hotel Finder metasearch engine.

Personalized banners are more successful than traditional banner ads. Pascal Gauthier, of Criteo, notes that the average click-through rate of a personalized banner is 0.6%, but that this rate can rise to 2.5% for certain campaigns, in other words, five or six times the rate of a generic retargeting ad.

Hipmunk, a travel metasearch engine, conducted a remarketing campaign with the help of AdRoll. The result was increased conversion rates (when a user visits the site) of 75% in the case of visitors who had previously searched its site, and 50% in the case of those who had seen the banners after having purchased a product via the metasearch engine.

Social networks get involved

Although it is still being tested on Twitter, retargeting has been available on Facebook since 2012. Using real-time bidding, Facebook Exchange (FBX) enables brands to insert their banner ads in the right sidebar of users who have visited their Websites or, since March 2013, in their news feed (see image below). The results have been dramatic: according to a report from AdRoll published in June, retargeting ads displayed in the news feed generate a click-through rate 49 times higher than those displayed in the right sidebar and 21 times higher than retargeting banners displayed outside social networks.

Source: mdgadvertising.com

Facebook’s mobile application takes things a step further by enabling businesses to retarget users who have already downloaded a brand’s app. A banner ad can be inserted in the news feed with a clickable button (Book Now, Watch Video, etc.) leading to the application (see the example of Hotel Tonight below).

Source: mobilemarketer.com

More and more tourism businesses will likely adopt these ad campaigns, given the excellent return on investment. This communication and loyalty tool is particularly suited for mobile devices, as it can use geolocation to provide even more relevant content. The future looks bright!