If you don’t already work with more than one retargeting partner, then it’s time to rethink your approach. Julia Bielecka-Dąbrowska, Head of Sales Development & Efficiency, RTB House busts the common myths and misconceptions of retargeting to highlight the benefits of using multiple partners and encourage marketers to rethink their approach.
Retargeting has long been acknowledged as an important part of digital marketing. Engaging with consumers who have already had some level of interaction with the brand can be the key to achieving the ultimate goal of advertising: conversion.
However, the best way to approach retargeting comes with many questions and misconceptions, particularly when it comes to working with multiple retargeting partners. Some common myths around multiple retargeting partners include fears over ad cannibalisation, the belief that working with a variety of retargeting vendors will impact ad frequency, and that it’s more expensive than just opting for one partner.
On the face of it, those beliefs are understandable, however RTB House data shows that ads backed by more than one retargeting partner reach an average of 37% more potential customers. This proves that working with multiple retargeting vendors ultimately leads to better effectiveness and results. So, is there really any basis to those beliefs?
One of the main concerns around having multiple retargeting partners is the idea that any ads served are going to be competing with each other for the attention of the same users.
This presents the perceived possibility of advertisers having to pay twice for reaching the same audience with the same ad, just from a different source. However, last-click attribution resolves this issue, because only one partner is awarded the conversion from the source of the most recent click. Therefore regardless of the payment model ROAS would be calculated taking into account only one source.
Furthermore, each retargeter that an advertiser works with will be operating on different technology and algorithms, so there aren’t many instances where the same users are targeted. And if they are then there is a benefit of two or three partners bidding on your behalf - versus another dozen or so bidding for the competitors. If you have two bids and the competitor has one - you literally have a better chance to win over this particular impression.
Statistically only 16% of conversions show a touchpoint with more than one retargeter and usually these are people with very high probability to convert..
Consumers tend to click through twice on an ad before they choose to make the purchase, so a degree of overlap between retargeting partners actually boosts reach and total conversions.
On the same wavelength
Closely related to ad cannibalisation are fears over negatively impacting the user experience and, in turn, damaging brand perception by serving too many ads to consumers. This is a valid concern because, after all, multiple vendors will be running ads simultaneously for the advertiser. But there’s a little bit more to consider than just that.
Individual retargeters don’t benefit from flooding users with an excessive number of ads. They only get paid for clicks or conversions, but have to pay for each and every impression, whether or not someone has chosen to engage with the ad. As such, it’s in the best interests of retargeting vendors to aim to achieve the maximum performance for the fewest number of impressions.
The most effective campaigns are those that are highly targeted and personalised to ensure only the most relevant ads appear in front of the people most likely to click through. Excessively pushing ads out goes entirely against that.
Money, money, money
As mentioned earlier, last-click attribution removes the risk of having to pay twice for reaching the same user. But advertisers will still have questions around how much it would cost to work with additional retargeters, believing that it would surely be more expensive. In reality, however, this isn’t the case. While the campaign cost may increase, this will result in a higher total conversion value with ROAS maintained (with an open budget) or a lower ROAS (closed budget where the spend may be constant or slightly increased).
An important part of this process involves auction models. The two general auction models are first-price auctions, which see the highest bidder win and pay the bid they submitted- and second-price auctions, where the highest bidder wins the auction, but only pays the second-highest price.
Today, first-price auctions are used by almost all inventory providers to avoid the overbidding that can be expected in second-price auctions.
In any real-time bidding situation, there will be thousands of advertisers vying for the opportunity to sit within an ad placement. All bids are sealed, and advertisers only get one shot at bidding on a placement. As a result, working with multiple retargeting partners doesn’t increase auction costs, and only stands to increase the number of high-quality impressions.
Brands working with multiple retargeting partners will increase the reach and effectiveness of their campaigns, going above what can be achieved by partnering with a single vendor. Many of the concerns are misplaced, and having more than one partner onboard is only beneficial.
Having multiple partners means reaching a larger audience, while maintaining relevance, and can ultimately help to boost conversions. It’s time for advertisers to rethink how they approach retargeting, and strongly consider working with at least two retargeters, if they want to get the most out of their campaigns.
By Julia Bielecka-Dąbrowska
Head of Sales Development & Efficiency