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Retargeted Ads Work

Hal Conick

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A recent study finds that retargeted ads are effective among consumers, despite their potential to annoy

Consumers often consider retargeted ads—the banner ads that seem to follow users around the internet after they visit an advertiser’s website—to be annoying. For example, one survey from InSkin Media and RAPP Media found that when consumers see retargeted ads more than four times, they often become irritated or angry.

Nevertheless, a recent report in the Journal of Marketing Research shows that retargeted ads work.

A recently published study, titled “An Experimental Investigation of the Effects of Retargeted Advertising: The Role of Frequency and Timing,” finds that retargeted ads caused 14.6% more users to return to the website within four weeks.

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“The impact of retargeting decreases as the time since the consumer first visited the website increases—indeed, 33% of the effect of the first week’s advertising occurs on the first day,” the authors write.

In addition, immediate retargeting seems to pay dividends in future weeks. When researchers targeted a consumer from the start, the effect of advertising worked better in the second week than it did if researchers left the consumer untargeted in the first week.

Another recent study on retargeting from the Journal of Marketing Research— titled “When Does Retargeting Work? Information Specificity in Online Advertising”—finds that dynamic retargeted ads that show specific products are initially less effective than generic brand ads. But when consumers’ online behavior shows that they have “evolved,” dynamic retargeting ads perform well.

“One explanation for this finding is that when consumers begin a product search, their preferences are initially construed at a high level,” say the authors of the paper. “As a result, they respond best to higher-level product information. Only when they have narrowly construed preferences do they respond positively to ads that display detailed product information.”

Marketing managers must be aware of the multiple stages of consumers decision-making process when shopping online, the paper says.

Hal Conick is a staff writer for the AMA’s magazines and e-newsletters. He can be reached at hconick@ama.org or on Twitter at @HalConick.