It’s Official: Consumers Are Just Not That Into Retargeted Ads

Careless retargeting executed by ad tech firms more interested in swelling their bottom lines, as opposed to performing a consumer service, are damaging their advertisers in the eyes of consumers that are becoming increasingly uncomfortable with just how much brands know about their online behaviour, according to research. 

InSkin Media and Rapp Media today (23 October) published a study that shows 55% of consumers are put off buying an item they have previously expressed an interest in online, if they are retargeted with ads multiple times after initially researching it.

The findings reveal that only 10% of 1,600 20-60 year-olds are more likely to buy an item after being served multiple times with ads for products based on their prior surfing behaviour.

However, the findings are not all doom and gloom for advertisers, with 53% of the respondents claiming ads from a relevant company are useful when initially researching a product or service. In fact people are almost four times as likely to be encouraged than discouraged to make a purchase in such an instance.

When Consumer ‘annoyance’ turns to ‘anger’

AttitudestoRetargetedAdsBut the more consumers are retargeted with said ads, the more likely they are to become annoyed, with the survey finding that as an ad is seen up to five times it becomes “annoying”, or “intrusive” (see chart).

This ‘annoyance’ then turns to “anger” once an ad is served 10 times to a user, according to the study.

In contrast to the positivity for a relevant ad being seen during research, one seen after research is over is 15% more likely to discourage than encourage a purchase. If seen after the product is purchased, it is nearly four times more likely to discourage future purchases.

The findings form part of a report published by the firms called “Familiarity, Frequency and Fine Lines”, and are yet another example of how the many advertisers that simply engage in the ‘spray and pray’ approach to using programmatic advertising are simply failing to grasp the true potential of the technology.”

Fine line to tread

The process of retargeting web users based on their prior surfing behaviour is popularly known as ‘behavioural targeting’, and is performed through the use of cookies dropped on a user’s machine when they visit an advertisers website. Given the emergence of programmatic technology, this is often performed in a real-time bidding environment such as an ad exchange.

CookiesPaul Phillips, RAPP, head of media strategy, said: “It’s a fine line to tread as brands potentially lose control through a perfect storm of increased automated buying and the spectre of consumer cookie deletion.

“Marketers and planners are negligent if they don't carefully plan around frequency caps and other contextual filters before letting the maths men hit the send button.”

However, this if often easier said than done, with some of the industry’s leading figures still trying to work out solutions to the complex technologies that make automated media trading a possibility.

Tech problems

In a recent ExchangeWire interview, Brian O’Kelley, AppNexus, CEO (pictured below, right), responded to readers’ questions on whether it’s possible to have the infrastructure in place, plus the speed needed, to have accurate frequency caps.

A common complaint among media traders is that latency issues can result in frequency caps being completely violated, especially if there is more than one ad spot on a page and an advertiser wins all of them.

brianokO’Kelley responded: “We see some lag in general whenever we bid on an impression and get a win, and there’s a gap. So if three-or-four impressions come in at the same time. But we can use Javascript to make sure we don’t drop the same ad three or four times.

“However, in RTB, we don’t have any control over it, so if a down-stream partner sees four impressions on the same page, at exactly the same instant and bids on all four, and that can potentially violate a frequency cap. We see that in some instances.

“One thing that we at AppNexus have built to address this is a multi-tag bid request tool, where we will send every ad on a page in a single bid request, and that does a lot to prevent this.

“What we’ve seen is that many of the DSPs are incapable of bidding on all three tags, so when we send a three-bid request, they’re only capable of responding to the first tag. It’s bad for publishers and it’s bad for buyers.

“One thing the industry needs to think about is whether the bidder – regardless of which technology they choose to use – is capable of responding to a multi-tag request. That will go a long way to addressing this particular problem.”

Just another reason to abandon last-click

Careless behavioural targeting is also seen as the result of the continuing prevalent use of ‘last-click attribution model’ (i.e. where the last party to refer a ‘conversion’ is awarded the bulk of spend), meaning ad tech providers are often incentivised to retarget users with ads, simply because they can. Not necessarily because they are fulfilling a useful service to a consumer.Rebecca Muir

Speaking earlier with ExchangeWire, Adit Abhyankar, executive director at marketing attribution specialist firm Visual IQ, said: “Incentives drive behaviour. This is common sense. So if flawed attribution [models] leads to flawed allocation of performance credit, which then leads to incorrect incentives, you can bank on the fact that, it will also lead to bad decisions.]"

The increased consumer annoyance at clumsily retargeted ads is also help spurring a groundswell towards advertisers adopting a more holistic approach towards how they reward their ad tech providers.

Rebecca Muir, ExchangeWire columnist (pictured left), argues the case for a multi-touch attribution strategy in a TraderTalk TV session here, where she outlines a two-touch point methodology that attempts to reward both ‘bottom of the funnel’ media (such specialist interest blogs) and brand publishers (tier one magazines for instance) near the top of the ‘purchase funnel’.

Privacy concerns

CrossHairsThe survey also taps into the growing public consciousness of online privacy, and the increasing unease among consumers of just how much ‘personal information they give away when browsing online.

Almost one in four (23%) people are unaware that advertisers collect personal information to serve relevant ads – women are 56% more likely than men to be unaware of this.

But 69% of survey participants said they were uncomfortable with advertisers knowing which websites they’ve visited. This was only marginally lower than knowing their home address (72%) and current location (71%). However, people are most uncomfortable about advertisers knowing their personal income (83%), followed by their mobile phone number (81%) and last online purchase (73%). This suggests that online behaviours are increasingly thought of as akin to personally identifiable information 

But it’s not all bad

However, the study also offers insights into how advertisers can prevent themselves from incurring the wrath of consumer fury, while still using such technologies.

The study reveals that that ads seen multiple times are 40% more likely to be received positively if they’re served on a website related to the ad content (e.g. a hotel ad appearing on a holiday website). Whereas those behaviourally targeted ads served on an unrelated sites are over 11 times more likely to discourage than encourage a purchase.

Context is also important, with the study also finding that people are 37% more likely to click on an ad if it’s on a site they trust.

Hugo Drayton, InSkin Media, CEO said: “Along with understanding ‘how often’ and ‘when’, advertisers must pay more attention to ‘where’ – a big issue in programmatic buying. Ads perform better on premium, trusted or contextually relevant sites. As with too much repetition, ads served next to irrelevant content may have a negative impact on consumer purchase intent.

”The industry got carried away with retargeting. It’s a powerful tool but it needs to be qualified by more thought and action to ensure it’s used effectively. As an industry we risk alienating a generation of consumers. Online advertising is hugely powerful and positive, as long as it is used intelligently.”