Providing an uplift in returning customers of up to 300%, behavioural retargeting is sweeping through the ecommerce landscape. But how can you make sure you’re getting your money’s worth?
The basic premise of retargeting is to target the consumers who have left your site without purchasing and reaching out to them with dynamic creative based on the products they viewed on site, thus increasing conversion rate. There are two payment models offered by retargeters, CPA and CPC meaning you can pay for either sales or for clicks.
What are the benefits of CPA retargeting?
Retargeting on a CPA payment model works in the same way as it does with any other publisher in the affiliate channel; you pay commission only when the retargeted consumer has actually made a purchase, which is usually the most attractive option for advertisers. Since the onus is on the retargeter to achieve results, it is in their interests to invest their resources in research and development. CPA retargeters employ bespoke technology to identify the users most likely to convert and to target them accordingly, and more recently have harnessed the same technology for new customer acquisition through the development of pre-targeting.
Why would anyone choose to pay CPC?
While the idea of paying for every click coming from a retageter’s graphics may initially appear a less attractive proposition, it does have its benefits. Most notably, CPC retargeting offers advertisers much greater control over the inventory targeted. Working within an overall budget set by the retargeter, you can work together with them to tailor how this is spent, adjusting your bidding to secure better inventory for your best converting products or categories. This granular level of control can be instrumental in optimising the ROI of the campaign. What’s more, as the campaign gains traction, the inventory budget provided by the retargeter will increase and you can tailor your spend more precisely to drive incremental sales.
So what are the disadvantages of these models?
The main accusation levelled at CPA retargeting is that the user may have returned and completed their purchase anyway, particularly where transactions are tracked on a post view cookie. Usually lasting for 48 hours, the post view cookie is dropped when the graphic is loaded meaning the level of user engagement can be hard to quantify. With CPC of course, you know the consumer saw and intended to interact with the ad, but what you don’t know is if this click actually led to a purchase.
Most retargeters specialise in one of the two payment models and it is this which will often inform your choice of retargeting partner. Ultimately both models have the potential to work well. They can drive significant uplift to the number of visitors returning to your site, and with a growing number of retargeters out there, their expertise is only going to grow.
William Hamer-Jones Webgains
William is a senior account manager on Webgains’ fashion team looking after a range of clients from Original Penguin to Joy The Store.