Without identity, retailer ad retargeting misses the mark

“Are we there yet?”

As any parent who has endured a summer road trip with young, easily bored children can attest, there is no question more annoying. Especially after hearing it repeated ten times… within the first half hour.

Sound familiar?

If you’re a retail marketer, it should. Because as much as you love retargeting, long the KPI darling on most retailers’ media plans, repeatedly sending the same customers the same ads — no matter how far along on their buyer journeys — can really annoy them. It may be enough to drive them away.

In a recent survey of US digital shoppers and retailers conducted by Nanigans, 77% of consumers say they receive too many retargeting ads from the same retailer and 88% complain they still receive retargeting ads for products they’ve already bought. Not surprisingly, 57% claim retargeting ads do not persuade them to buy.

What is surprising is that most retailers already know this. In this same study, 83% of retail marketers said they believe they would achieve the same sales results organically, without retargeting. Still, top online retailers spent an average of $16.7 million on retargeting last year, and 53% plan to increase their retargeting spend in 2018.

Clearly, retailers are wary of letting go of this direct-to-consumer marketing tactic. And for good reason: retargeting can still offer value, but only if we evolve the strategies around how, why and when it is deployed — an evolution that starts with identity.

As I talked about in my year-end column for 2017, the marketing landscape has changed dramatically over the past few years as identity —  the ability to recognize a customer on a 1:1 basis — has advanced from a ballyhooed marketing concept into a disruptive brand asset that has permanently changed the way marketers build and maintain customer relationships.

Gone are the days of relying on third-party cookies to inform retargeting efforts. Our ever-evolving multi-device, channel-hopping behaviors have rendered these short-lived, browser-based data files relatively useless for targeting customers with timely and meaningful messages along buyer journeys.

The remedy for today’s retargeting challenges

Thanks to the progress of customer identity solutions, retailers now have opportunities to build customer profiles from deterministic and persistent first-party data, such as email addresses, loyalty membership or customer IDs. By their very nature, these deterministic identifiers persist across any touchpoint whenever a customer logs in or authenticates via some type of transaction.

Working with an identity solution that continuously collects customer data and connects it to individual profiles, retailers can build a durable, multi-dimensional and dynamic data asset that can be used to reach known individuals in addressable media. This is what makes retargeting relevant again — now and throughout the customer lifecycle.

Look no further than the world’s largest digital retailer for proof. There’s a reason why Amazon is now reportedly testing its own retargeting ad product: it knows that converting today’s demanding, fickle and empowered consumers into repeat customers requires more than resending product ads — it takes relationship-nurturing.

By leveraging its vast stores of customer data, Amazon knows what customers are looking for and what they’ve already bought, and it can retarget shoppers with messages that actually add value to their experiences. This is retargeting driven by customer identity resolution — no longer a lower-funnel ad tactic chasing short-term gains but, rather, a long-term strategy spurring brand affinity and high-value customer relationships.

It’s not about the initial conversions

Hey, I get it. For marketers, hard-pressed to justify ad budgets, boasting high KPIs comes with the job. But are high conversion rates really growing your business? Be honest, because we’ve all seen the headlines (“Dozens of Retail Mainstays Now Defunct,” “Retailers Shuttering Stores at Record Pace”).

Identity-based retargeting isn’t about optimizing toward a conversion; it’s about optimizing toward what gets the conversion. Armed with identity, retailers can recognize known customers throughout all stages of the purchase funnel and beyond — from awareness, to consideration, to purchase, to loyalty — and retarget them with personal and relevant messaging that drives the ultimate KPI: high customer lifetime values.

At this point, there may be some retail marketers wondering, “Are we there yet?” Sure, the right data strategies and technology solution are a must. But without identity, you’ll miss critical parts of buyer journeys, resulting in imprecise targeting and irrelevant, disconnected and duplicative messaging — all of which adds up to a huge waste of ad dollars that could be better spent optimizing retargeting strategies that move relationships to the next stage.

Retargeting in its current form will continue to drive both you and your customers crazy. It’s time to move beyond that approach.

Opinions expressed in this article are those of the guest author and not necessarily Marketing Land. Staff authors are listed here.

About The Author

Mike Sands

Mike Sands is CEO of Signal. Prior to joining the company, he was part of the original Orbitz management team and held the positions of CMO and COO. While at Orbitz, Mike helped take the business from start-up to IPO, then through two acquisitions (Cendant and Blackstone). After Orbitz, Mike joined The Pritzker Group as a partner on their private equity team. Mike also has held management roles at General Motors Corporation and Leo Burnett. His work at General Motors led him to be named a “Marketer of the Next Generation” by Brandweek magazine. Mike holds a Bachelor of Science degree in Communications from Northwestern University and a Masters in Management degree from the J.L. Kellogg School of Management.