Re-marketing in eCommerce

Advertisers and marketers are always looking for new ways to get their products in front of their audience and in 2010 a new marketing tactic called “re-marketing” emerged. The increase in re-marketing throughout the eCommerce landscape can be primarily attributed to Google offering re-marketing as an AdWords service for the first time.

For those unfamiliar with re-marketing it is a form of target marketing used by retailers which, using information obtained about their customers via tracking “cookies” (files), allows retailers to create and distribute user-specific ads throughout the internet.

For example, when someone visits the retailer’s eCommerce site, a “cookie” can be installed on their computer which allows the retailer to display relevant ads to the customer based on products they have previously viewed on retailer’s site. However, these relevant ads are not constricted to just appearing on the retailer’s site, but can also appear on other sites throughout the internet.

While re-marketing certainly seems like an interesting concept, some consumers are wondering if re-marketing is going too far. Lost in the holiday shuffle last month, the FTC proposed distributing and enabling a widespread “Do Not Track” mechanism (i.e. the online version of the “Do Not Call” list) which would be built directly into web browsers. The mechanism would allow consumers to block the specific “cookies” and other tracking measures used for re-marketing so advertisements would not reflect the browsing habits of the consumer.

With changes potentially forthcoming, let’s break down the pros and cons of re-marketing…

Pros:

• Targeted advertising – What’s more annoying than those flashing ads on websites that aren’t even relevant to anyone? At least with re-marketing the ads shown online actually apply to something the consumer could be interested in. For example, here’s an article from a consumer who thinks favorably of re-marketing tactics as not only are the ads more relevant, but they may also lead to a higher click-through rate which means more money for the site hosting the ads.
• Increased conversion rates and site traffic for the retailer – When ads are relevant people are more likely to pay attention to them and people are more likely to interact with content they find engaging. It makes sense and explains why re-marketing is becoming a hot topic in eCommerce circles because retailers can spend less on advertising and still increase relevant traffic to their site.
• May increase brand loyalty in certain situations – The key here is explaining the re-marketing ads to consumers so they understand how the ads work. Some ads offer an “opt-out” option and some retailers use re-marketing for more general offers (discounts and coupon codes) instead of focusing on specific products. If brands make the purpose of re-marketing clear initially, it could help to establish trust between the brand and the consumer.

Cons:

• Brand vs. consumer privacy concerns – If the purpose of re-marketing is not communicated clearly some consumers may view these tactics as a violation of their privacy and may choose not to purchase from the retailer who is using re-marketing tactics. A New York Times article cited a woman who was re-marketed weight loss ads so frequently it made her feel overweight and made her think negatively of the brand behind the ads.
• Shared computer privacy concerns – Many households have a single computer which is shared by multiple family members – this situation may defeat the purpose of re-marketing or even dissolve privacy within the household itself. If someone is booking a surprise vacation for their family they may not want other family members to see multiple vacation ads when they check their e-mail and partake in basic internet activities.
• Re-marketing could hinder the discovery of new content – Like it or not, advertising is a way many people are exposed to new products, offerings, and deals. Seeing ads from the same retailers over and over could lead to people ignoring these ads altogether, especially if they see the same ad multiple times for a product or brand they are not interested in.

It will be interesting to see what happens to re-marketing in the future… but regardless it is an intriguing tactic that consumers should be educated about in order for re-marketing to achieve long-term success.