Retargeting ads first emerged on the internet in 1998. They were the lovechild of the development of eCommerce websites like Amazon and the development of browser cookies. The result is a simple but effective ad which directs people towards websites they have previously visited.
This is all basic stuff, but it helps to repeat it. After all, the retargeting ad’s basic format is what has allowed it to survive as the internet has evolved — and 2016 was the year of yet another huge evolutionary milestone for the internet. That is to say that it was the first year where more people used the internet via mobile than by desktop. 2016 was not a freak occurrence; it’s where the internet is going.
So, how will this affect the future of retargeting ads?
Ads Need to Be Designed Mobile-First
The effectiveness of retargeting ads comes from the way they integrate with the website. If a retargeting ad somehow interferes with a website’s usability, the web user will leave the website and they won’t click on the ad. Everyone loses here. The website loses a user, the web user is left frustrated and the company who placed the ad gains nothing either. It’s a lose, lose, lose situation.
Retargeting ads which were designed for desktop and then hastily transferred over to mobile won’t cut it anymore. Retargeting ads need to be designed mobile-first because people use the internet mobile-first. If anything, it’s desktop retargeting ads which should now be the afterthought.
This mentality is precisely why Skype made a point of redesigning itself for mobile and then transferring this design to desktop. In the old days of the internet, it would have been the other way around.
It’s also worth bearing in mind that the small size of a mobile screen, when compared to a desktop screen, allows for a lot less margin for error. A 10-inch or 14-inch laptop screen is more or less standard. However, with mobile screens, people will pay around $800 to jump from the 5-inch Moto G5 screen to the 5.8-inch iPhone 8.
This is yet another reason to make sure your ads are designed mobile-first. An ugly retargeting ad on desktop is annoying, but an ugly retargeting ad on mobile can take up a fraction of the screen.
The 98% Figure Hasn’t Changed — In fact, It’s Bleaker Than Ever
An oft cited statistic is that 98% of all internet traffic doesn’t convert first time. This is why we need retargeting ads.
Mobile has by no means changed any of this. In fact, conversions are even less likely on mobile than on desktop. Throughout 2015 and 2016, global desktop conversions hovered around the 4% mark. For mobile, this figure was a paltry 1.5%.
So, while people are more willing to use their mobile to access the web, they are more likely to go to a desktop to do serious shopping, right?
Wrong. Or rather, that’s only one way of looking at it. Yes, it could be that people don’t want to convert on mobile because mobile isn’t “serious” enough and that desktop is where people do “serious” things like shopping. However, so much of that is conjecture. It also imagines an internet where every eCommerce transaction is done sat down at a desk.
People go to physical shops in their pyjamas and make impulse purchases worth hundreds of pounds. We are just as capable of doing that sort of shopping on mobile.
What’s incredible is that this tiny amount of conversions is still much greater than anyone expected. It just goes to show how much money there is to be made if businesses turn that 1.5% conversion rate on mobile into the 4% that already exists on desktop.
Right now, the only thing stopping more customers from converting on mobile is the quality of the mobile internet itself. Google is still updating its algorithms to punish bad mobile sites because some companies still haven’t got the message. So, let’s repeat the message: mobile internet is the internet and — if anything — your desktop website is what should come second.
There’s something of a vicious cycle happening. Businesses don’t see results on mobile, so they don’t invest in mobile, so they don’t see results on mobile. Without decent investment in retargeting on mobile, the 98.5% of people who don’t convert first time have no incentive whatsoever to convert second or third time. That’s why we are where we are.
The success of app-based business like Uber or Just Eat should serve to remind us of just how willing people are to part with their cash on mobile. What these apps do (which a lot of mobile websites don’t) is make transactions brainless — as brainless as making impulse purchases in your pyjamas in a physical shop.
Apps like these also succeed because they have capitalised on a mobile commerce industry which is growing, despite the fact that many businesses are asleep at the wheel. All of this brings us back to retargeting. If people aren’t converting on your mobile website, where are they converting? It could well be an app, and this needs to be factored into the design of your retargeting ads. Which brings us to…
Your Retargeting Campaign Needs to Work at Every Level
Retargeting ads can be directed at people who downloaded your app and who are now using another website, people who went on your website and who are now using another app, or any other combination.
You can use retargeting ads to tackle apps which rival your app, mobile websites which rival your mobile website, or even desktop websites which rival your app. Knowing exactly where your customers are going after not converting has always been the key to success. The only thing that’s changed is the variety of places people can go to.
CPC and CPM Are So Last Year
This is where technology gives way to economics. While retargeting ads will need to improve, the way in which ad networks pay websites will need to change as well. Or rather, more options are needed to reflect an ever greater variety of advertising aims.
This is why CPI ads have risen in popularity alongside the old CPC and CPM ads. CPI stands for cost per install and it’s payment method is designed specifically for mobile apps. If you want your business to succeed under an Uber-style model, you need to push your app with a retargeting campaign tailored towards that exact investment.
Uber isn’t necessarily better than telephoning for a taxi; it’s just the done thing. It’s easier, more popular and better advertised than your average taxi company. It all comes down to how well Uber have embraced mobile and how they embraced retargeting on mobile.
Just look at their referral retargeting technique. Imagine someone who checked out the Uber app once upon a time. They decide against it. Uber tries all the standard retargeting on other apps, mobile websites, desktop websites — but then they go one further.
This is because Uber knows full well that people who aren’t on the Uber bandwagon just yet likely have friends who are. So, Uber creates referral codes that its own users can use to get a cut of the cost per install. Direct ad networks have enough data to dig really deep into personalised ads. Still, nothing says personal like your own friend or relative directing retargeting ads at you in exchange for a sweet cut of that cost per install in the form of discount.
But retargeting ads are even more important than that. Even after downloading your app, there’s a 77% chance that a potential consumer will never use it again. So don’t take your CPI data singly and don’t treat those app downloads as guaranteed customers. Think of apps as a mobile form of lead generation and focus on retargeting to downloaders as well as people who walked away from your website entirely.
Embracing The Data
Practically everyone in the world of digital marketing will by now have read Nadya Powell’s sincere breakup letter to the advertising community. If you haven’t, she essentially points out that the way marketing is going is towards a near worship of data. In doing so, marketing is abandoning the lofty and grand ideas it once had.
Quite what these lofty and grand ideas are, Powell doesn’t make clear. As far as I can tell, marketing has always been about selling people things. Nothing’s changed in that respect. However, Powell is right about the data thing. There is lots of it — and the rise of the mobile internet means that we have even more than ever.
Not only can you use retargeting ads to direct messages to people based on their demographic and location data; you can also direct ads at them based on the mobile network they’re connected to, or even the exact mobile device or vendor they are using.
Think about how much clearer a picture of your customer you can get if you know that more of them are wealthy Android users than wealthy Apple users. To go Android is to state that you believe in raw computing power over style or user-friendliness. To go Apple is to believe the opposite. Allow your retargeting to embrace that.
…While Not Being Evil
A long, long time ago, “don’t be evil” was Google’s mantra. Now, whether it’s because it’s not paying its “fair share” of tax, producing some nasty suggestions for questions in its search engine, or abusing people’s privacy, Google certainly appears evil to some people.
Google’s access to such an immense amount of data is what makes it such a powerful company — and with great power, comes great irresponsibility. Should businesses simply take all of the data available to them with the rise of mobile internet and foist ads upon people with too much gumption, it may leave a bitter taste in the mouth of the consumer.
Perhaps unsurprisingly, the evidence suggests that this is already the case. While the ability to display retargeting ads on locked phones might seem tempting, it’s worth considering how consumers will actually feel about this. Advertising in this way feels more like a virus than it does marketing. It’s why so many people protested after iTunes gave people the new U2 album for “free” on their phones. It turns out that “free” came at the price of not being able to delete it. Eventually, Apple backed down and looked quite silly as a result.
All of this would probably explain why less than 30% of the mobile ads users see in a typical day elicit a positive response and why downloads of adblocking software have skyrocketed, with over 380 million people using this kind of software on their mobiles. There’s no getting away from it: this is the marketing industry’s fault. To change this trend, we need better adverts.
So, Where’s The Balance?
Knowing where to join the line between pushing your message on your potential customers too hard and completely ignoring the immense amounts of money to be made by better mobile advertising is hard. However, it’s not impossible.
People know what retargeting ads are. They have long expected them to be a part of their web browsing experience. Moving them over to mobile is a matter of embracing the ever greater amount of data at our disposal, while making sure consumers don’t feel like their phone is being “infected” by ads. Better, more personalised retargeting ads are part of this, but so are new retargeting ad techniques such as the referral retargeting used by Uber.
Whatever businesses do, it’s clear that whatever they are doing now isn’t working. Step one is getting conversions up to the 4% mark that desktop is currently riding at. After that, it’s up to marketers to surpass the retargeting techniques of the desktop years, rather than live in their shadow.
About the author
Liubov Khomenko is an affiliate marketing and mobile banner ad expert from Adsterra. With Adsterra, Liubov helps to use the latest in affiliate ad technology to get the best conversion rates for her clients around the world.