by Oliver Walker

Remarketing – showing a relevant ad to a consumer who’s visited (but not bought from) your site, to encourage them to come back and buy (also known as retargeting) – is used by most online retailers. You know the sort of thing: you look at a pair of shoes online and then an ad for those shoes pops up next time you log on to your computer, tempting you back to the site to buy. But there’s been relatively little research into what part remarketing plays in generating the all-important sale: do consumers click on the ad and buy straight away? Or do they go away and think more about their purchase before clicking ‘buy’?

The common assumption has been that remarketing ads act as the final trigger before a consumer buys from your site, and the performance of the ads is usually judged on that basis. But our analysis (using Google Analytics Multi-Channel Funnels) shows that a remarketing campaign influences the sale, but doesn’t necessarily lead directly to it. That’s an important thing to know if you’re assessing where to assign your online marketing budget.

Google Analytics now lets you see how your various online marketing channels work together. You can see the journey a consumer has taken to get to the point of buying from you. For example (very simply), a shopper might search on Google for ‘brown leather bag’. You show them an ad for a brown leather bag on your store, they click through and have a look, but they don’t buy. A few days later, they type the name of your store into Google search, and have another look at the bag. They still don’t buy, but you know they’re interested. You might decide to remarket to them, showing them an ad with a tempting offer if they buy the bag. Then what happens?

We started by looking at the behaviour of consumers who had bought from an online retailer, and who’d been exposed to a remarketing ad by that retailer. We analysed 10,000 conversions from over 35 different clients, across a range of industries, to get a really strong sample. What we wanted to find out was whether the remarketing ad had assisted the sale (but not led directly to it), or whether it had been the final trigger for the sale (and led the consumer directly to buy).

The results were surprising. A remarketing ad, while a strong influence on a sale, is nearly 10 times (9.7 to be precise) more likely to ‘assist’ a sale than to produce the final visit that leads to the sale.

That’s interesting in itself, but what you really need to know is: if a remarketing ad has a significant influence on a sale, but doesn’t lead directly to it, what does the consumer do next? If the ad is a main influencer to buy, then where the consumer goes next could give them the information that will make up their mind one way or the other.

We analysed remarketing campaigns across Google Adwords and Criteo (the main players in creating remarketing ads) to see what consumers did after seeing the ad, if they didn’t buy directly. The results were, in order of priority:

Go direct to the site to buy (not via the ad): 44% of consumers from Google AdWords and 56% from Criteo went directly to the site to buy.
Search for the brand, product or service online, clicking on either organic search results or PPC ads: 34 per cent did this after seeing a Google AdWords remarketing ad of which eight per cent were pay-per-click results); and 42 per cent from Criteo (of which 28 per cent were pay-per-click)
Click through from an affiliate link: 3% from Google AdWords and 8% from Criteo came from affiliates.
Click through from an email: 3% across the board came from an email.

The rest was made up of other referrals, display ads and social media, but in tiny numbers. Remember, we’re only talking about what the consumer does after the remarketing ad; referrals, social media and display ads will all have bigger roles to play in sending the original click through to your site.

A. Where are purchasers referred from, after seeing a remarketing ad (that didn’t lead to a direct sale)? Based on analysis of Google AdWords remarketing.

B. Where are purchasers referred from, after seeing a remarketing ad (that didn’t lead to a direct sale)? Based on analysis of Criteo remarketing.

Why does all this matter? In 50% of cases where a consumer doesn’t buy as a direct result of clicking on a remarketing ad, they will come back to your site from another source. That means that the remarketing ad is still five times more likely to be just an element of the customer journey to a sale, rather than the final, deciding point.

So, when you’re creating a remarketing campaign:

Don’t assume the remarketing ad is the decision maker. In at least 80 per cent of cases, it isn’t
Think about where the consumer will go after seeing your remarketing ad. It’s mostly likely to be search, so tailor your search campaigns accordingly
If the consumer is going to come direct to your site, make sure they find what they want. If they’re not coming to your product landing page direct from an ad, the product they’re looking for should be well signposted.
Don’t assume that remarketing will show results immediately. There may be a time lag between showing the ad and the consumer buying.
Allow for the time lag in your inventory planning. There’s nothing worse for a consumer than being targeted with a product, to find two days later that it’s not in stock
Be careful when attributing a sale to a direct visit. There’s often another campaign driving that visit.

Oliver Walker is a web analyst at specialist PPC and Google analytics consultancy Periscopix.

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