HOW DOES RETARGETING WORK? EXPERT RETARGETING TIPS, TACTICS, AND STRATEGIES WHITE PAPER THE EUROPEAN MARKETER'S GUIDE TO RETARGETING

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1 HOW DOES RETARGETING WORK? EXPERT RETARGETING TIPS, TACTICS, AND STRATEGIES WHITE PAPER THE EUROPEAN MARKETER'S GUIDE TO RETARGETING

2 Executive summary In an ideal world, you d deliver a personalised message to each customer at the perfect moment. Retargeting, which translates your first-party customer data into highly targeted digital ad campaigns, is as close as the real world may ever get to that ideal. In fact, retargeting is so effective that many companies classify retargeting as a cost of goods sold (COGS), instead of as a marketing expenditure.1 By delivering personalised, customised advertising to predefined audience segments in just the right way at just the right time, retargeting gives marketers the best possible return on investment. Savvy marketers take it one step further, not only generating revenue but also gaining tremendous actionable insight into the interests and intent of their customers. We surveyed European marketers, analysed AdRoll campaign data, and talked to industry experts to learn more about the great results marketers are garnering from retargeting. Some interesting findings include: On average, adding social to your retargeting mix boosts conversions by 1.14X.2 Advertisers see a 73% increase in conversions with cross-platform, cross-device retargeting.3 Optimisation strategies like geo-targeting can increase ROI by up to 3.9x.4 Retargeting turns first-party data into personalized ad campaigns

3 The basics of retargeting Leverage website behaviour and CRM data to power your retargeting campaigns Retargeting 101 What is retargeting? Retargeting is selectively advertising to consumers who have already visited your site. Your message is tailored to each according to the type of interest they ve shown, keeping your brand top of mind and bringing the right customers back to your site for the critical repeat visits that add up to a purchase. In recent years, it has become a must-have tactic for reaching and converting potential customers--as important as search or marketing. 1 A visitor comes to your site 2 They learn about your products but leave before purchasing How retargeting works A snippet of code in your website HTML collects essential non-personal data, including which pages a user visited on the site, the date and time they stopped by, and their approximate geographic location based on IP address. Expert retargeting tips, tactics, and strategies The way a user interacts with the site speaks volumes about their interests and shopping habits. We call this intent data, and it lets you serve highly relevant ads to your customers wherever they go online. Intent-based retargeting is so effective that 88% of European marketers compare retargeting favorably to search, and 93% say that retargeting performs the same as or better than other display campaigns. 2 3 AdRoll displays your ads on sites they visit later, bringing them back and keeping your brand top of mind 4 5

4 LIKE PAGE By adding retargeting on Facebook, AdRoll s European advertisers have seen boosts up to 2.03x in clicks, a 1.77x lift in impressions, and 1.42x more conversions. 2 Different types of retargeting Web retargeting Web retargeting is the combination of tailored messaging and targeted ad placement. Targeted display ads bought on ad exchanges and served on news sites, blogs, and other locations online wherever your customer is likely to browse help keep the brand top of mind, improve engagement, and bring customers back to complete a transaction or start a new one. Web retargeting works well for e-commerce, tech B2B, media and entertainment, travel any brand interested in engaging current or prospective customers online. It s a strong foundation for any retargeting program. CHECKOUT Cross device retargeting Consumers today are more likely than ever to browse and buy everything from shoes to software on a mobile device. By 2018, there will be more than 2.5 billion smartphones around the world, and m-commerce sales from smartphones should reach $34.8 billion. 8,9 With mobile retargeting, advertisers can retarget desktop site visitors when they switch to browsing Facebook and Twitter on their mobile devices, or retarget mobile site visitors directly as they browse other mobile sites. Mobile retargeting can be a useful channel for any brand with a mobile-optimised site or mobile app. It s especially popular with mobile app developers who can drive downloads by retargeting desktop audiences with mobile app install ads that direct users to the itunes App Store and Google Play. You can retarget users across platforms and devices Retargeting on Facebook and Twitter 80% of consumers look to friends and family for product recommendations and for many, paid ads on popular social platforms serve the same function. 5 Not only does retargeting on social give you access to some of the largest audiences online (including 1.39 billion monthly active users on Facebook and 288 million on Twitter), it also lets you take advantage of native social tools, such as shares, likes, and comments. 6,7 6 7

5 Customised messaging and creative Effective ad campaigns count on great creative. That s why you invest so much time getting your imagery and messaging just right. In general, we have found that simple ads with bold designs and clear messaging perform the best. Stick to a single message, feature your product or brand prominently in the visuals, and provide an explicit call to action like Try it now, Learn more, or Get your discount today! Expert retargeting tips, tactics, and strategies But be careful: even the best creative can run for too long and lead to banner fatigue. After several months of seeing the same ads on the same sites, potential customers tend to get so used to your ads that your creative becomes all but invisible. Avoid banner fatigue by refreshing the design and messaging of your ads on a regular basis. Most successful advertisers rotate their ad creative every few weeks, giving potential customers something new to look at, and a new reason to interact with the brand. Try A/B testing calls to action and colour variations, or running relevant seasonal campaigns or time-sensitive promotions. OVERALL RESULTS ROI = >20x on average Revenue = 83% YoY Increase for Q Digital agency Red Hot Penny partnered with AdRoll to help their client, watchmaker Larsson & Jennings, to develop a retargeting campaign to reach shopping basket dropouts. They used website visitor behaviour to get more in-depth customer insight, like the fact that customers tended to buy within the first week of interacting with the brand. By refreshing banner ads with tailored offers such as a time limited discount and free delivery the watchmaker's campaign stood out at a time when other retailers were struggling to cut through the noise. Campaign results were impressive: a whopping 30x ROI on their retargeting spend during the notoriously busy Black Friday and Cyber Monday weekend. Retargeting has been so effective that we expect it to become one of our main digital channels. Carl Brooks, senior search manager for Red Hot Penny 8 9

6 BUY NOW Mobile leaderboard: Ad Sizes that matter You can also extend the life of your creative by experimenting with additional ad sizes. The three most popular ad sizes are , and (referred to as medium rectangle, leaderboard, and skyscraper, respectively). The vast majority of websites use at least two, if not all three, of these ad sizes, so be prepared to deploy all three before you hit play on your campaign. The variation in size and placement helps with brand awareness and mitigates banner fatigue. Though these are the most popular options, inventory is available in a range of different sizes. Ads in other supported dimensions may not serve as often, but they will extend your reach and potentially create impact in spaces where the bidding is less competitive. Here are a few alternate ad sizes you may want to consider: Medium rectangle: Leaderboard: Wide skyscraper: Large rectangle: 300x600 Mobile leaderboard: Medium rectangle: Leaderboard: BUY NOW BUY NOW Power your campaigns with a variety of sizes BUY NOW Wide skyscraper: Large rectangle: 300x

7 Create time cohorts that align with the customer journey Cadence modification creates a positive user experience Time cohorts and cadence modification BUY NOW Repeated views of an ad can help build brand awareness and keep your products top of mind. On the other hand, if someone sees the same ad too often, that ad may lose its impact or, even worse, the visitor might come away with a negative impression of your brand. 1 2 Set caps for how often you show ads to the same visitor to limit overexposure, maximise the effect of the ad impressions you serve, and protect your brand image. We generally recommend a cap of no more than 10 impressions per customer per day, but the ideal frequency will depend on your campaign. User visits product page Serve user product ads for 7 days Start by considering what your customers will be trying to accomplish in a given window of time, then assign time cohorts based on how recently they ve visited your site. For example, serve product-specific messaging to the cohort of visitors who have visited a specific product page within the past week. After that, remind them of your site with a high-level branding message so you would target a time cohort who had visited your site within the past two weeks, excluding anyone still in the first seven-day cohort. Targeting time cohorts controls not only the messaging, but how often you want to serve those messages to those customers. FREE SHIPPING 3 MONTHS FREE WITH ACTIVATION ON ALL ORDERS Caps for how often you show ads to the same visitor limit overexposure A more technically sophisticated way to accomplish the same goal is through cadence modification. Over time, you automatically bid less to show an ad to a specific time cohort. As the cohorts become less likely to convert, you ll win fewer impressions, and the ones you do win come with a much lower CPM price tag. 3 SHOP NOW Serve user high level branding ads for 14 days 4 SHOP NOW Serve user promotional ads for 7 days 12 13

8 Segmenting visitors based on behaviour There are some pages on your site the Thank You page, specific product pages, content download forms that give you a lot of obvious information about the visitor s interests and intent. But not every visitor will be leaving you with such a clear indication of what they want from your site. Advanced segmentation lets you structure retargeting campaigns around subtle intent signals, like how many products someone previewed in a single visit or how long they spent on your site. At AdRoll, we track hundreds of different intent signals, including number and type of products viewed, referral source, last time they saw an ad, and likelihood to convert. Advanced segmentation lets you structure retargeting campaigns based on the intent of the user You can map customer intent signals like these directly to the stages of the customer lifecycle (awareness, consideration, purchase, retention) to build target audience segments. Any visitor who makes it to the site is demonstrating awareness of your brand. Starting to fill out a form indicates consideration. Adding a product to the shopping cart shows intent to purchase. And a previous purchase establishes openness to cross-selling or future purchases, and a higher likelihood of retention. OVERALL RESULTS ROI = 2.6x Fashion Days, the largest online fashion destination in Central and Eastern Europe, wanted to reach their large customer base with ads that were tailored to each shopper s past browsing behavior. AdRoll helped them launch a branded dynamic ad campaign across Central and Eastern Europe. The company leveraged sophisticated segmentation strategies and dynamic creative to serve personalized ads based on user intent signals. Users were shown a variety of contextual ads including past favorites, recommended products, and best-sellers. Account management support from AdRoll helped Fashion Days surpass their targets. AdRoll s dynamic ads have been an integral addition to our marketing mix, helping us reach users with meaningful content and increasing our ROI up to 12x, Jaka Zupancic, ˇ ˇ performance marketing specialist 14 15

9 Use A/B tests to optimise landing pages Experiment to find out what variables increase CTR Customised landing pages STEP 1 Split traffic to two distinct landing pages Once a potential customer clicks an ad, what will they see? Landing pages should be relevant to the message in the ad they just clicked. If the ad features a promotion, position that promotion prominently on the landing page. If you re driving traffic to a white paper, the ad should take the customer to a download form. Monitoring traffic and conversions on your campaign landing pages to optimise your retargeting campaigns. Try testing different landing pages from the same ad creative for example, a shopping cart page vs. a category page to see which has the highest conversion rate. Then use the intent signals from the more recent visit to move that visitor into a new retargeting segment, and serve them ads designed to move them through the sales cycle. Based on landing page visitor information, you can build a start-to-finish retargeting campaign that converts the greatest number of customers every step of the way. STEP 2 Monitor which programme has the highest performance. Take into account N-size, and make sure to reach statistical significance. 1 BUY NOW And don t forget the creative elements of the campaign: try to maintain a consistent look and feel across the ad, the landing page, and the rest of your site. This can include anything from brand colors and logos to imagery, messaging, and positioning. The right landing page increases CTR and the user experience STEP 3 Implement changes based on performance

10 Geo-targeting local (and global) markets A company doesn t need a brick-and-mortar presence to benefit from strategic geo-targeting: it s a great solution for small businesses looking to drum up local clientele, or for large national or international companies running special promotions in limited locations. Geo-targeting is an excellent way to reach a targeted audience Even online-only companies may have certain geographic markets that consistently outperform others. Consider geo-targeting markets where you already have a higher concentration of high-value customers. By focusing your budget in those areas, you can increase conversion rates while simultaneously saving money in markets that have historically shown lower-value conversions. Geo-targeting is excellent for reaching certain goals, but it s worth noting that it can restrict spend and impressions. As with any segmentation strategy, you should aim for a geo-targeted segment that will reach at least 1,000 site visitors. OVERALL RESULTS CTR = 80% increase over general campaigns Click Volume = 3x after custom segmentation The buying process for the right piece of furniture takes time: customers like to visit several websites and stores before they make their final decision. During this period, which could take up to several months, Chesterfield Showroom, a fast-growing retailer of custom-made Chesterfield style furniture, has to stay top of mind and re-engage visitors who showed interest in their products. With 40 stores in eight European countries, it is important that they personalise and localise their ads based on location. AdRoll s cross-network, cross-device reach allowed Chesterfield Showroom to engage customers on their computers, and across mobile devices and optimse the messaging in their local language. AdRoll allows us to easily manage our campaigns in multiple countries and languages. With AdRoll we feel we have the powerful tools of a multinational at our fingertips. Lämmert de Jonge, owner of Chesterfield Showroom 18 19

11 About AdRoll AdRoll is the global leader in retargeting, with over 20,000 active advertisers worldwide. The company's innovative and easy-to-use marketing platform enables brands of all sizes to create personalised ad campaigns based on their own website and mobile data, ensuring maximum return on online advertising spend. The company has offices in San Francisco, New York City, Dublin, Sydney, London, and Tokyo. The company is backed by leading investors such as Foundation Capital, Institutional Venture Partners, Northgate Capital, Glenmede, Accel Partners, Merus Capital, and Peter Thiel. Learn more at Visit us at adroll.co.uk SOURCES 1 LUMA, State of the State in Digital Media AdRoll, State of the Industry: Europe, AdRoll study of European advertiser campaigns, Q and Q AdRoll, Nitro case study 5 Forrester, Balance Trust With Targeting In Social Reach Marketing 6 Facebook, Facebook Reports Fourth Quarter and Full Year 2014 Results 7 Twitter, About: Twitter usage (accessed Apr 16, 2015) 8 emarketer, Worldwide Internet and Mobile Users: Q Complete Forecast 9 emarketer, Smartphone Mcommerce Sales, United States, (in billions)