Many of our wallets are significantly lighter after Black Friday. But we’re still receiving emails and seeing ads on every webpage that remind us of the goods we managed to not purchase by exercising some control. I get emails with such personal, albeit amusing, subject titles that I often wonder if there is someone sitting at a remote desk examining my shopping habits and trying to egg me on. I’m addressed on a first-name basis and treated to free shipping to complete a purchase. Or I’m given an extra discount. If I try to distract myself by researching my next assignment, I see ads for products that I specifically browsed for. It’s enough to convince us that the universe is communicating that we really need to make that purchase. This is the magic of remarketing and/or retargeting.
Remarketing and retargeting are business strategies devised to increase the conversion rate, that is, the percentage of consumers who actually make a purchase after visiting a store. Remarketing refers to the oh-so-familiar webpage ads you see promoting products you either browsed for or were in the process of purchasing. On the other hand, retargeting refers to the emails you get encouraging you to rethink not buying a product or inducing a panic that the item might soon be out of stock. As a business strategy, the benefits of remarketing involve higher conversion rates over time and the ability to reach a targeted audience. Advertising costs are also ultimately lowered because businesses only pay when a user actually clicks on their ad, and this cost is relatively cheap, averaging about $1 per click. Remarketing technology continues to get more sophisticated, but tools like Google Analytics enable even the smaller businesses to manage their website traffic. This aids in more informed decision making and marketing strategies.
Remarketing is enabled by “cookies,” a small piece of code called a pixel that is placed on a website. This code is embedded in text files that get dropped to your computer by the web server (the computer that hosts the business’s website) whenever you visit the site. This only happens on the browser-level which means that files are not stored onto your computer’s main memory, but exist in the browser. Cookies serve as unique identifiers for each computer that accesses a website. Data is then compiled that reflects your online activities essentially creating an activity profile. When you visit other websites that host ads, your identifier code stored in your browser cookies is recognized and personalized, targeted ads are displayed. Cookies are also responsible for keeping your items saved in your cart between website visits. For this reason, cookies are highly valuable to marketers.
It is important to note that only the website that places the cookie can read and use it. However, this is little consolation to those concerned with user privacy. Knowledge of how remarketing works often gives rise to the “creep factor.” While it is a disconcerting to know that your data is being used to target you as a consumer, the matter is not entirely out of your control. Practices such as clearing your browser’s cookies frequently, using browser extensions that block ads and refraining from entering your email address when you visit websites can prevent businesses from tracking your online activities.
The debate about remarketing is largely reliant on consumer preferences. It’s a trade-off between possible security exposures and a customized shopping experience. There are consumers who appreciate personalized ads, while some are warier of the data risks and choose to take preventative measures against remarketing. From the salesperson’s perspective, it provides a sound business strategy to persuade customers to purchase products they have previously expressed interest in. Unfortunately, this means we have to be more aware of the extent to which these tactics are influencing our behavior as consumers.