Affiliate marketing strategist, Matt Swan gives retailers the lowdown on how retargeting works in the performance marketing channel

Affiliate marketing strategist, Matt Swan gives retailers the lowdown on how retargeting works in the performance marketing channel

For the first time we are starting to see retargeting companies now working in the performance marketing channel through affiliate networks.

So what considerations do advertisers need to bear in mind if they’re looking to take the plunge with this burgeoning sector, asks Matt Swan, client strategist at Affiliate Window.

He said the headline sales figures through retargeting are impressive. “At Affiliate Window we have seen retargeting companies achieve considerable sales on a handful of programmes,” he continued. “But we’re clearly at a stage of maturity in the affiliate marketplace where sales volume is no longer the only consideration. The value of these sales clearly needs to be evaluated to provide a greater understanding of the worth of traffic through retargeting companies.

Redoubling sale chances

“In essence, retargeting companies are displaying banners to consumers who have already visited your site. These consumers may have the propensity to purchase and could potentially return to your site without the aid of retargeted creative. However, these companies are also able to provide branding across display networks, as well as offering the potential to convert customers who have left your site who may not have returned.”

Swan explained: “Typically these companies will require a Post Impression (PI) cookie in place on a campaign. Typical wisdom through affiliate networks (although not a general online standard) is to use a 48-hour PI window where, if a banner is viewed and is not overwritten by a click cookie, the retargeting affiliate will be rewarded the sale. One of the key considerations in ascertaining the value of the transaction is how much the viewing of a banner impacted upon the sale where no click has taken place.”

But he stressed that closely monitoring the performance of retargeting campaigns is essential to their success. “One of the key performance indicators could be the split of sales coming through PI cookies compared to click cookies,” he said, for example.

He added: “In the first month of a retargeting campaign the percentage of sales that come through PI cookies is likely to be high as they build up their customer profiling. As such, the first month of figures could be removed from the stats so that these figures are not skewed.

If a click has taken place, by the nature of the action there has been user intent to interact with the banner. It can easily be argued in this instance the banner has been influential in the purchasing decision. Where there is not a click present, the question of influence comes into play; how much have retargeting banner(s) influenced a consumer. Clearly it can be argued the consumer may not have paid any attention to the banner, and could have returned to the advertiser site anyway. In this scenario, is there any reason why a retargeting company should be rewarded the sale?”

Better understanding needed

This is a grey area and one that needs to be better understood, according to the strategist: “We are aware that retargeting companies are working hard to demonstrate the influence of their banners in helping push consumers into buy mode.” A recent report by Nielsen and retargeting company Criteo in France indicated retargeted display ads resulted in a 24% increase in consumer ‘purchase intent’.

“An alternative remuneration model for retargeting affiliates could be to reward them on a cost-per-click (CPC) basis,” Swan suggested. “Where a click is present, the user has shown the intent to click on the banner and this has added value to the purchasing cycle. Retargeted adverts should be highly relevant to the individual, so it could be argued that without user engagement they have had little influence over the sale. This does however move these companies away from our performance channel.”

Another consideration is how often customers are retargeted to. “There is a fine line between re-engaging with potential customers and spamming them,” he pointed out. “Again, it is arguable how engaged a consumer is with a retargeted advert days, possibly weeks after initially visiting the site. It should be stipulated how long the customer will be retargeted for and for what length of time the retargeting advert can still be legitimately attributed the sale.”

Probably the most important consideration of all when running a retargeting campaign through the performance channel is how sales are being de-duplicated, he added. “While any sales through the affiliate channel will automatically be de-duped by the affiliate network, there should be a robust de-duplication process in place across other online channels, including de-duplication against PI cookies.”

Retargeting can be a valuable tool for advertisers but it is extremely important to ascertain the value they add, Swan concluded: “By truly understanding this, effective commission rates can be set to reflect how incremental the sale is that is delivered and that’s ultimately what it’s all about; intelligent commission setting that rewards the value.”