Six questions you need to ask to stop wasting money on retargeting

02 Apr, 2019

Too many brands today are wasting money on their display ad campaigns. Thanks to the bad habits of just measuring last click attribution, they’re paying to serve ads to people who would have bought from them anyway.

And many retargeting providers are complicit in this fallacy, choosing to measure ROI alone, and ignoring the importance of incrementality [link to incrementality blog].

What is incrementality and why is it important?

In short, incrementality in display ad campaigns is the difference between people who saw your ads, and those who would have made a purchase even if they hadn’t seen the ad.

By measuring last click attribution and then only ROI, you are inaccurately attributing sales to the wrong channel and running ads that you might not have needed to run, as buyers were going to convert anyway by influence generated from activity earlier in the lifecycle.

However, many retargeting providers would rather not measure incrementality. Why? Because by measuring just ROI they artificially inflate their results, making it appear that the campaigns they ran for you were more successful.

But this lack of transparency simply means you’re paying more for ads you never needed to run – and not accurately targeting your campaign budget in the parts of the customer lifecycle that will deliver the long lasting customer lifetime value.

Six questions you need to ask to stop wasting money on retargeting

So how can you ensure that your retargeting provider is accurately measuring incrementality and giving you genuinely the best return on your investment?

We recommend asking them these six questions:

  1. How do you measure the incremental revenue from my retargeting campaigns?
  2. What websites are my ads running on and which performs best?
  3. Which ad sizes and creatives have driven the highest number of sales?
  4. What is my new customer rate (customers that my business have never seen before)?
  5. Which audiences on the website do you allocate the most budget to (top level viewers or abandoned basket)?
  6. Based on 1-5 above, can I choose to optimise and control my audience and creative targeting to invest in the right websites to maximise incremental sales and minimise cost?

Your retargeting provider’s answers (or lack of) should give you an insight into whether they’re taking incrementality into account when planning and running your display campaigns.

Or whether they’re lazily relying on users that would have converted anyway and are deep into their engagement with you, to make it appear their campaigns are performing better than they really are.

If you’d like help translating their answers and checking whether you’re missing opportunities (or whether you can relax, knowing your budget is being well spent), you’re welcome to contact us and we’d be delighted to explain what they mean.