Insight: Is the online retargeting cookie crumbling?

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By: RickFerguson |

Posted on July 21, 2017

Martech Today poses the question: with ad-blockers and privacy regulations converging into a perfect storm of privacy, is the predominant digital marketing practice of online retargeting on the way out? And if it is, how will marketers acquire new customers and lure back promiscuous ones? Will commerce end if the same ads stop following you wherever you go online? And if retargeting works, does it do so at the expense of customer relationships? Stay tuned.By Rick Ferguson

On the off chance that the practice of digital retargeting is unknown to you, here's a short primer: You visit an ecommerce site and browse for a product. Perhaps you purchase the product; perhaps you just browse. Either way, when you leave the site, an ad for the product you just browsed or purchased now follows you everywhere else you go on the internet. Usually, the ad includes a discount offer for the product you browsed or purchased.

The whole process includes a Big-Brotherish quality that has led to the rise of ad-blockers designed to thwart the third-party browser cookies that drive digital retargeting; as the Martech article points out, Apple's Safari browser and Google's Chrome browser provide ad-blocking options, while the European Union's impending General Data Protection Regulation (GDPR) may render the entire process a non-starter for brands marketing to European consumers.

Throw in the rise of intelligent voice devices such as Amazon's Alexa, through which retargeting ads simply won't work, and the question begs: Do these developments mean that retargeting is on the way out?

The practice can be effective, even if draconian and primitive; retargeting only knows a single piece of data about you - what product your viewed online - and so you often see ads for products that you've already purchased. The result is often consumer ire; a recent InSkin Media consumer survey revealed that the most likely consumer response to seeing the same ad online 10 or more times is "anger." Many consumers would be delighted to see the entire practice go the way of door-to-door vacuum cleaner salesmen.

Still, experts quoted in the Martech piece argue that retargeting won't disappear; it will merely evolve. While the third-party cookie may die out, more sophisticated targeting techniques such as digital "fingerprinting," which can track consumers across screens and devices, will lead to more "layered" retargeting based on multiple data points such as product interest, location, and demographics. Retargeting is destined to become more intrusive, not less.

There is a chance, however, that retailers themselves may seize the controls of the retargeting machine and save customers from an endless barrage of intrusive ads. The reason: control of the data, and control of customer relationships. The point is worth quoting at length:

"Right now...retailers don't understand that every time an outside ad is delivered to a customer on their site, there are dozens of ad tech vendors that are dropping cookies or other code on that visitor's computer, or who will get access to that data. So that retargeted ad from the retailer delivers info to dozens of others in the ad ecosystem...Eventually, online retailers are going to 'pull back the curtain' and realize that all these 'strangers' are tracking a customer's product interest she originally indicated on their sites.

"Most retailers will eventually understand that her initial [product] interest in those sneakers is relationship data that belongs to that first retailer. That retailer may choose to follow her with an ad for those sneakers, but her interest in red sneakers might be limited to that retailer's follow-through instead of getting blasted across the ad universe. In other words, modern retargeting is trailing a murky ad ecosystem — occupied by dozens of data vendors and ad purveyors — instead of simply being an extension of the retailer. And, eventually, the retailer will reassert its right to a relationship with the person who walked into their store, over other players in the ad ecosystem who are grabbing a portion of that customer data."

This point cannot be emphasized enough. The reason why retargeting can be so damaging to customer relationships is because the consumer becomes a target across the internet, without her permission, simply because she was interested in your brand and your products. Trust is an essential building block of customer relationships - and allowing third-party predators access to your customers' browser data through retargeting is a certain way to violate that trust.

Instead of chasing the short-term high of a single sale driven by a retargeted ad, consider using the site visit as the opportunity to begin a relationship with that customer. When the visitor attempts to abandon the site, offer an incentive to capture that consumer's email address. Offer them a surprise-and-delight reward in exchange for joining your free loyalty program. Acquisition is the first step in a long-term, profitable customer relationship; and as in any budding relationship, first impressions count. Be friendly and cool, instead of creepy, and the relationship you build may become a profitable one indeed.

Rick Ferguson is Editor in Chief of the Wise Marketer Group.