Through extensive analysis and experimentation we have come to understand that remarketing is not always as effective as it is generally perceived.
Sure, the reports all tell us that users who viewed our remarketing ads and came back to the site convert really well. Of course they do, they were already on our site, so they’re anyhow bound to convert better than first-time users.
But was it really because of that remarketing ad that they came back to your site and converted? We believe this often is not the case for the following reasons:
- Remarketing revenue is hardly ever incremental revenue. It just takes revenue away from other channels, leaving you to think remarketing works miracles. Actually it doesn’t as demonstrated by this client case.
- Users who already know your site very well, in particular those coming via direct and email, should you really be remarketing those? Does it make any difference? We find it rarely does!
- Remarketing is too slow: often remarketing only kicks in after the conversion already took place. Thus causing unnecessary remarketing spend on users that do not need to be retargeted.
- Remarketing is often done indiscriminately. Every user is retargeted, even those that only spent a few seconds on the website and will never buy anything.
In order to simplify this we analyse the position of the remarketing ad in the path that leads to conversion:
Remarketing ads at the beginning of the path.
Remarketing implies there was a previous visit.
In theory this means remarketing ads should never appear at the start of the path.
The fact that they sometimes do is the result of an analytics imperfection.
Remarketing ads in the middle of path.
These are our prime suspects for saving money on remarketing.
Should you really be retargeting visitors who visited your site directly or via email for example (i.e. your existing customers)?
Remarketing ads at the end of the path.
We find that remarketing ads are not frequently the last click before conversion.
But when they are this is typically where they create value and incremental revenue.