Why brand marketers lose out when using multiple retargeting vendors

By Bianca Loo, Head of Sales for Southeast Asia, Taiwan, Hong Kong, Large Customers, Criteo

Bianca Loo, Head of Sales for Southeast Asia, Taiwan, Hong Kong, Large Customers, Criteo

Advances in machine learning and artificial intelligence (AI) are making retargeting and other marketing solutions more effective at their very core. Retailers and brand marketers can now better adapt to shifting trends to deliver personalized recommendations and engagement to consumers.

The projected growth in digital ad spend in Southeast Asia (SEA) from US$2.8 billion in 2019 to US$3.85 billion in 2022, signals the confidence that marketers have in digital advertising’s ability to spur greater growth. The onset of these transformative technologies, however, begs the question – with so many marketing platforms and tools available, which option works best for my business?

Marketers often fall into the trap of adopting a ‘catch-all’ strategy by using multiple platforms. However, for retargeting, this is a dangerous mindset. Having more than one solution is actually counterproductive and here’s why.

Ad fatigue destroys user experience

Multiple retargeting vendors could overwhelm the same user, since they operate on separate systems and algorithms. When bombarded with too many ads – even if they are relevant, users experience fatigue and lose interest in products. For example, if you adopt three retargeting platforms from three vendors, these three platforms would consider a single person to be three users. While the ads this person receives might still be personalized, he or she would receive three times the volume of ads than one would be comfortable seeing.

At the same time, multiple retargeting vendors could also result in a fractured customer journey. When the user clicks on the ads from one vendor, the remaining vendors will continue retargeting the user as they lack a centralized user database. This means the user sees the same retargeted ad served by different vendors again and again, resulting in ad fatigue that harms user experience and brand perception in the long term.

To deal with this, some users may choose to remove ads from their browsing experience entirely with the use of ad-blockers. Research has revealed that one in two internet users in SEA use an ad-blocker to eliminate unnecessary ads. Ad-blockers limit ad inventories for marketers and an overkill in ad volume could result in negative attitudes toward the brand, ultimately lowering sales in the long-term.

On the flipside, a dedicated retargeting partner’s technology should already have in-built mechanisms for optimal ad frequency and relevancy. Consider using a single retargeting partner – you not only spend less but also more effectively engage consumers.

Imprecise performance measurement

The use of multiple retargeting partners can result in errors in performance measurement. Ginni Rometty, CEO, IBM, recently remarked that big data is the “world's natural resource for the next century”. While it is true that data is the new oil, introducing unnecessary complexities into data analytics can lead to the wrong outcomes.

When marketers have multiple retargeting platforms, a single user runs the risk of clicking on ads from different vendors. This complicates the measurement process, making it difficult to quantity the impact of each ad and how it contributes to sales. Unclear measurements then result in inefficient budget allocations.

Wastage in ad spend

When retailers and brand marketers use multiple retargeting solutions, they are essentially bidding against themselves. This is a serious problem that can result in a significant decrease in click-through rates because of ad fatigue. To address this, you would need to increase your Cost-Per- Click (CPC) to encourage the same level of engagement that would have been more economical previously, and this inevitably leads to wasted ad spend.

Choosing the most suitable retargeting platform

When selecting a retargeting partner, retailers and brand marketers must ensure they have accurate personalization features and honest pricing. To elevate your marketing efforts, the platform must also provide other key functions and benefits:

• Unified view of the omnichannel customer journey: For retailers and brand marketers, you need to cover all the important touch points. Today, every customer is an omnishopper. Switching effortlessly between devices and channels, customers demand seamless and integrated shopping experiences. A study found that only 25 percent of shoppers in the Asia-Pacific region are interested in product recommendations they receive. This calls for deeper personalization that can be achieved with the help of advanced data-driven technologies that integrate various data sets and surface unique shopper profiles. These technologies complement retargeting, allowing retailers and brand marketers to serve relevant and targeted advertisements that truly drive conversions.

• Look beyond retargeting: While the end-goal for a business is to drive conversions, a larger strategic focus to accomplish this goal is required. Consider overall business objectives, branding, building audience awareness and consideration, and understanding customer shopping behaviours. When the right overarching strategy is implemented, the quantifiable benefits from retargeting are magnified.

• Drive efficiency and scale: Many online businesses try to keep digital marketing costs low to stay competitive. An upfront investment in retargeting drives site traffic, increases the volume of sales and return on investment in the long-term. The best campaign balances scale and efficiency. Marketers need to evaluate factors like operational costs, margins, shipping costs etc. to identify realistic KPIs. When optimized for efficiency and scale, technology is no longer a cost; instead, it becomes a valuable investment.

• Artificial Intelligence: Every retargeting platform touts the harnessing of AI in their solutions. However, it is more than having fancy algorithms. To enjoy the true benefits of the technology, a massive data set is required for machine learning to take place. Your retargeting partner should be able to provide proper use cases where AI capabilities are demonstrated and drive revenue.

Why less is more

More isn’t always better. Problems arise when you engage multiple retargeting vendors simultaneously – it will likely worsen your marketing return of investment and customer brand perception. The recommended approach is to go with just one retargeting vendor – one that is attentive to your overall business needs, is transparent, lets you put its services to the test, and provides strategic advice on adjustments, rather than simply have you use its technology on self-service.