“Data Driven Thinking” is written by members of the media community and containing fresh ideas on the digital revolution in media.
Today’s column is written by Chris Zaharias, SVP of Sales at Dapper, an online advertising technology company.
Repeat after me:
The #1 issue in retargeting is not privacy
The #1 issue in retargeting is not privacy
The #1 issue in retargeting is not privacy
The #1 issue in retargeting is not privacy
The #1 issue in retargeting is not privacy
If you read the AdAge, New York Times and WSJ articles, it is exceedingly clear that the issues consumers voice around retargeting do not have to do with privacy, but rather with the effects of excessive frequency and poor targeting.
AdAge (see article):
- The author says that the ‘weirdness’ comes from Zappos’ recommendations “appearing just about everywhere I’ve been on the web”. That’s excessive frequency, folks, not any concern with privacy. ‘Stalking’, as the author calls it, is the issue, and is defined as “a persistent pattern of conduct that is not wanted by the person to whom it is directed.” (StalkingBehavior.com).
New York Times (see article):
- Ms. Matlin’s disturbed by Criteo’s retargeting not because she perceives it as an invasion of her privacy, but because the product targeting is poor -as is the targeting towards her specifically. As she states on her blog, after viewing the shoes for a millisecond, she realizes she “could never buy shoes online.” And, as was the case with the AdAge author’s stalked-by-Zappos experience, Ms. Matlin takes issue with seeing “Zappos ads for those shoes” on “almost every site or blog I go to”. There again, the issue is that of excessive frequency of targeting.
For those less directly involved in the space, excessive frequency and poor targeting generally are a result of three things:
- By making no distinction between people who have looked at a product and bought it versus people who looked and didn’t buy. Of course people are going to be annoyed when they see ads following them around the web for the product they just bought. A good retargeting system should be able to understand consumer intent and pick in real-time which product to show, yet most systems simply use custom Javascript to scrape the product(s) you view and store them in your cookie, with no thought given to buyers vs non-buyers. Here’s a wild thought: perhaps the user didn’t convert because they didn’t like the offer on a merchant’s site – so another one would be better, and perhaps one that’s not already stored in the user’s cookie. Technologies that rely on in-cookie product storage are as dumb as a physical retailer assistant following you around the store saying ‘Buy that shirt you just looked at’ ten times in a row.
- The non-existence of frequency capping. Frequency capping is the most basic of display ad concepts, but apparently the fact that certain vendors on a CPC basis means that they *knowingly choose* a level of frequency that annoys customers (but makes them lots of money). To avoid the weirdness & annoyance that excessive retargeting ad frequency brings, you have to do two things:
- Buy inventory on the real-time biddable (RTB) exchanges (Google AdX, Pubmatic, OpenX and soon, Yahoo) where frequency capping is easy to implement;
- Manage frequency across ad networks and publishers when buying outside the RTB exchanges
- A non-aligned pricing model. Criteo takes pride in charging on a cost-per-click (CPC) basis because they think it’s equivalent to the CPC model as it works in search engine marketing (Google AdWords, for example). But, CPC is no better than CPM if there’s no focus on the advertiser’s ROI goal. What does Criteo care if they show the consumer a product they have no intention of buying – or worse, already bought – 20 times, when they get paid for clicks? Eventually that user is going to click, as much out of (curiosity & annoyance) x (frequency) as anything else. Oh, yes, but Criteo will say that $2B in transactions have been driven by their system. Whoa, reality check: 100% of those users have already visited the retailer’s site, and 80% of the $2B in transactions would have happened anyways. Smart advertisers will eventually realize that and demand that retargeting systems prove their net-new revenue value *and* brand-building value, and with that pricing models will have to align with advertisers’ ROI goals. When that happens, much of the creepiness that comes with excessive frequency will go away.
It is no surprise that Criteo’s response to those issues is to draw attention to consumer privacy controls, for those are the only ‘controls’ that appear to exist in their system. Advertisers need to educate themselves on the technology behind retargeting vendors’ systems, and make conscious decisions rather than just going with the vendor that has raised the most money and has the most feet-on-the-street.
That’s my $0.02, and I’m happy to hear from those who agree or disagree.
Follow Chris Zaharias (@searchquant), Dapper (@dapper_net) and AdExchanger.com (@adexchanger) on Twitter.
