Kirthi Kalyanam will speak at AdExchanger's Omni.Digital conference in Chicago on September 8.
A lot of marketers are struggling with retargeting.
According to a recent Millward Brown Digital poll of 300 senior brand, agency and media execs, 55% of them aren’t confident in their company’s grasp of the customer journey.
“Historically, the advertising industry has had a very narrow definition of retargeting that’s been focused on acquisition,” said Kirthi Kalyanam, director of the Retail Management Institute at Santa Clara University and a professor of marketing at Santa Clara’s Leavey School of Business. “The epiphany comes when marketers realize they also need to focus on retention.”
That’s where remarketing comes in. While the term is often used interchangeably with retargeting, they perform distinct functions.
“Remarketing is about keeping a conversation going with existing customers across channels, people you’ve had contact with before and can identify,” he said. “Retargeting is really just cookie-based site targeting.”
But terminology aside, timing is everything. Kalyanam recently completed a field experiment in collaboration with online home improvement retailer BuildDirect to try and answer the question of how – but more so when – to engage and re-engage consumers.
“In retail, it’s about location, location, location,” he said. “But with remarketing, we found that it’s about timing, timing, timing.”
AdExchanger caught up with Kalyanam to talk about the nuances of retargeted advertising and why figuring out when to do consumer outreach is “half the battle.”
AdExchanger: Are marketers being smart enough when it comes to retargeting?
KIRTHI KALYANAM: Cookie-based retargeting on websites was the easiest entry point for people to engage in remarketing – low-hanging fruit for customer acquisition – but remarketing is a much broader concept that focuses on retention. As more technology comes down the pike, we’re going to see remarketing become more broadly applied, more sophisticatedly applied and become less invasive.
Speaking of invasive, retargeting gets a bad rap because many people find it creepy.
Yes, but beyond that, the bigger issue is that it can be super annoying and super wasteful. There is an argument to be made against advertising all the time. Frequency capping and choosing the right time is critical.
That’s because retargeting is connected to a growing backlash we’re seeing from consumers who don’t want to be overwhelmed with advertising. Just look at the number of people downloading ad blockers – that’s a clear sign of dissatisfaction.
Timing would seem to tie into that – not overdoing it, but also knowing when it’s best not to take any action.
We ran a large-scale field experiment, very rigorous, looking at the impact of the timing of retargeted advertising and found that timing is a powerful way to understand how advertising is working and the underlying mechanism for why it’s working.
But timing depends on which vertical you’re in, what products you’re selling and what type of customers you have. What’s right for one brand isn’t necessarily going to work for another. And sometimes part of the strategy is knowing when not to do anything at all.
The good news for advertisers is that we’re getting better at understanding all of this through data-driven experiments so they don’t have to make guesses.
What can brands do to get it right?
Brands or retailers with access to multiple channels have an advantage, but they have to be smart if they want to be effective in an online world where expectations are going up dramatically. An omnichannel company isn’t going to be automatically successful if they don’t reach the customer at the right time.
In other words, if you don’t think about the timing, you’re wasting your omnichannel advantage.
What’s the main takeaway of your research project?
It’s become fairly obvious that every CMO and every marketer needs to maintain continuous contact with customers over a long duration even after they’ve bought something. It’s not like you acquire a customer through retargeting and then you just stop marketing them. You’ve got to think about how to retain them.