Just about everyone has experienced the ubiquitous product ad that follows you from site to site as you navigate around the web, whether it is a camping tent or a pair of Jimmy Choo shoes.

Retargeting, sometimes referred to as remarketing, is a form of behavioral marketing that utilizes online tracking. A person visits an e-commerce website page containing a small text file, generally a JavaScript tag, which places a cookie in the Web browser the web browser the person is using to visit the site. The cookie may be keyed to the web page for a specific product, a shopping cart or a home page. The retargeting vendor creates an ad for the e-commerce website or the specific product, which then appears on other unrelated websites that person or someone using the same computer browser visits. Retargeting can be a highly effective lead generation tool for businesses but it’s rapid growth and expanded use, it also raises serious privacy concerns from such online commercial surveillance.

Positives

If done well, retargeting provides obvious and significant benefits for the consumer. It allows highly personalized marketing, providing ads relevant to an individual who has initiated and engaged in an active search. For the consumer, it is very time efficient –it highlights a product or business in which the consumer has already shown interest and attempts to show the consumer an ad for the right product at the right time.

The benefits to sellers are quite obvious. Retargeting is a very effective way to generate leads, targeting prospects that have already expressed an interest, which greatly increases the likelihood of a purchase. Previous visitors are reminded of a company’s site and brand. According to Greg Coleman, president of Criteo, “The average click-through rate online for display ads is .07 percent and the average click-through for retargeted ads is about .7 percent. “

Negatives

As retargeting becomes more and more precise and these ads increasingly saturate web space, consumers may find it eerie, feeling like they are being tracked and watched from site to site. Sellers must guard against showing the same ad over and over again, or the same product to someone who has already completed the purchase. Some may form negative reactions to the product ads and business brands.

Opt Out Options

In 2010, Michael Learmonth wrote in Advertising Age: “As tracking gets more and more crass and obvious, consumers will rightfully become more concerned about it.” “If the industry is truly worried about a federally mandated ‘do not track’ list akin to ‘do not call’ for the Internet, they’re not really showing it.”

Major participants in the retargeting space such as Google seem to recognize the risks of bombarding their users with seemingly limitless and intrusive ads. Google allows users to view, add and remove categories of interest based ads as well as opting out of interest based remarketing altogether, although it warns “they’ll probably see advertising that’s less relevant.”

Future Directions

Clearly, businesses will continue to expand retargeting. It is highly efficient and cost effective way to generate leads from among consumers who have already shown active interest in a business, product or service. Evolving data mining techniques will usher in even more sophisticated personal advertising as more data sources are overlaid, such as credit card and checkout activity, or the physical destinations a person frequents. Michael Learmonth argued in 2010 “[a]s ads become more persistent and more customized, consumers are going to demand one place to opt out of everything, and not to have to check boxes at Criteo, Yahoo, Google, Blue Kai or whoever else is targeting them that day.” As retargeting advances, it may bring some consumers a greatly enhanced experience while others may find it highly offensive, as obtrusive as big brother.