Retargeting is a form of advertising that drives incremental value from your existing user base by showing relevant, personalised ads to the right user at the right time. A user is 70% more likely to buy after being served a personalised retargeted ad.

Retargeters, like other advertising providers, operate on a Real Time Bidding (RTB) system; RTB means the retargeter partakes in an auction to purchase ad space in real time. While a web page is rendering three key questions must be answered by the retargeter:

  1. Do we want to show the user an ad?
  2. How much do we want to pay?
  3. What do we want to show them in the ad?

This must happen in just 25 milliseconds to ensure that a web page loads seamlessly and does not disrupt the user experience:



So what are the key pieces of tech that help to answer those three questions in the twelfth of the time it takes to blink?

1. Do we want to show the user an ad?

The first key question is whether the user is worth showing an ad to or in fact whether it is the right time to show them an ad. What is important to realise at this stage is that there is no ‘right price’ just the most efficient one.

The efficiency of the price can be measured against tens of thousands of conditions that can be split into two categories; the user themselves and the context of that particular moment.

Contextual influences include time of day and the day of the week, the publisher that the ad is being served on and the ad size itself. User conditions revolve around how the user interacts and engages with your site. For example if the user has previously made it all the way to checkout and then left the site they would be considered more likely to click and buy. My company saw up to a 50% increase in CTR with the introduction of our latest predictive engine alone.

2. How much do we want to pay to show the user an ad?

Once we have decided that we wish to show an ad we can decide how much we wish to spend, for this a pricing engine needs to be in operation. Using the aforementioned factors a pricing engine can use the intersection of how likely a user is to convert vs. the likely price we will have to pay to win a bid.

Providers in a Real Time Bidding system operate on a second price auction system. This means the winning bidder pays the second highest price for inventory. The tech helps to strike the delicate balance between bidding high enough to win these auctions and overpaying.

If the first two parts of the tech stack are not operating efficiently then an ad will either be shown to non-engaged users or miss high value users. Or, we will over pay for the user and raise CPMs unnecessarily. Getting this right forms the best ROAS/ROI level possible.

One key thing to note is that different retargeters will have different bidding strategies based on their pricing model. For example those operating on a CPC are limited to low value, high click rate inventory where as those on a more transparent model would aim for maximum performance inventory. 

3. What do we want to show them in the ad?

Dynamic Creative Optimization (DCO) represents the next step up from traditional retargeting into personalised retargeting. Many retargeters should be able to answer questions 1 and 2 but then will serve a standard ad. Only a few leading players can also truly personalise that ad.

Creatively the DCO tech can select from a number of assets such as product, marketing message and call to action. Using the user’s on-site browsing history it will build an ad based on what the user viewed. This will also be optimised based on performance of other users i.e. if two products are often bought together and the user has looked at one then DCO will build an ad for both.



This content will also be contingent on the medium. For example if I leave the checkout on my computer and then, using cross device retargeting, the retargeter finds me on my phone, the ad will be swipe friendly and mobile optimised but based on my computer activity. This means they can show me a more relevant ad on any device – when three or more devices are involved in the conversion path conversion rate increases 18%. Furthermore features such as ‘touch here’ buttons or swipe bars increase click through rate (CTR) by an average of 69%.

So there it is: 25 milliseconds, 3 questions and 1 perfectly personalized ad. With each part of the process contributing to the uplift in performance a retargeter is already left behind if they cannot answer these 3 questions effectively.