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Three Myths Around Multiple Display Retargeting Busted

Three Myths Around Multiple Display Retargeting Busted

In a time when almost all of e-commerce players use retargeting as a way to multiply their revenue, the smarter your approach is, the better.

In this highly competitive environment, marketers no longer think about just one tech provider. In fact, more and more now know that running two to three campaigns with use of both “standard” and “professional” retargeting solutions can score better overall results.

However, with a vast number of retargeting engines out there, the question remains whether using multiple retargeters is really better for business. In order to help answer this, we'll break down some of the most common myths - and facts - surrounding the multiple retargeting approach to get to the bottom on what the technology can and can't do. 

MYTH: Using the same ad space supplier will lead to worse results

FACT: A comprehensive approach will be more effective

Without a doubt, the use of multiple retargeting tools will return better results when they operate on separate ad inventories. For example, targeting inventory on Facebook versus another group of websites will likely bring more positive results. But there’s still a lot of confusion as to how multiple retargeters can work effectively within the same ad space, or if they even work at all. 

In some situations, a single supplier will be sufficient to achieve campaign objectives, but in most cases multiple retargeters will be much more likely to deliver. Let’s visualise it:

 

On the first chart the red line represents the return from retargeting activities on a single piece of ad inventory, but bear in mind that each tech provider is different, so the results delivered by them are not the same. We can see it clearly on the second chart; a line drawn above both retargeters’ results shows the overall potential return. So, in a typical scenario, each provider will win in some cases and lose in others – what that means is that each of them will generate fewer impressions overall. However, in such a situation the total return from an advertiser’s point of view will be higher and each impression more effective.

MYTH: The same technology means the same results

FACT: Technological differences are key 

There is a common misunderstanding that because all retargeting providers generally use comparable technology, the only thing they can offer is a mirror of the same activities. In fact, when we say every retargeting tool is different, it means that they may use completely different algorithms, user segmentation, unique creatives, etc. All that means different results from each retargeter. One tool may be better at reaching a certain group of users, while another will be more effective when appealing to another group of potential buyers.

Although the way to use the technology may be similar, algorithms rule, so we can safely assume that using multiple retargeting approaches - or at least a second one - will yield results that do not overlap with the first provider. 

MYTH: More providers means more expensive ads

FACT:  It’s all about high value users

One of the most common concerns with retargeting technology is so-called 'cannibalisation'. An often mentioned point is, that when advertisers agree to cooperate with more than one retargeter, two providers are attempting to buy campaign impressions for the same user, which can have the negative impact of raising the final price. What's more, retargeters will attempt to bid less to save their percentage margin and as a result, lower the number of impressions that can eventually be bought. But what are the overall consequences in practice? 

Adding additional retargeters can certainly change the RTB auction environment  – the final margin on this particular impression can be lower, that's true. But let’s think about it this way: if these are only 'high value users', such as customers who who have just abandoned a cart, there is no possibility that an advertiser will somehow lose them when there's more than one retargeter in the auction bidding for them. They will not overpay for those users if they use a final payment model with a specific effective cost target (such as eCPO). 

The overall effect for the whole group will be the sum of specific subgroups of these high value users. There is a very low probability of losing any of the relevant impressions in that group. In fact, to pursue such a strategy seems a reasonable solution, as it allows a bigger chance of getting the message through to the most promising users.

In conclusion, using multiple retargeters, even with the same technology while working on the same inventory, will in most cases have a positive overall effect. There is some minor, negative impact of cannibalisation, but more important is the positive influence of getting overall higher returns as a result of using different technologies in parallel. 

So this is how many big e-commerce players take a lead over the competition – they use different tools side-by-side, managing payment conditions with each one in order to maximise overall returns. 

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Daniel Surmacz

Daniel Surmacz

Daniel focuses on creating a long-term development strategy and working out key guidelines for foreign expansion of RTB House. He has been planning and coordinating all business activities since the company was founded.

Read more from Daniel

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