Summer 2009 – Online Insights: Viewpoint

Is Search Retargeting For You?

By Mark Simon

Paid search marketing is now the benchmark for efficiency and effectiveness in online marketing. Even in a poor economy, search spend hasn’t dramatically declined (although bullish growth projections have been moderated).

However, it has one fundamental flaw. Put simply, the unit for which advertisers pay (the click) isn’t what advertisers really want to buy (which is, of course, the conversion). Furthermore, no two clicks have the same value. Some may have great value, but the majority of clicks don’t result in conversions. This waste is something we’ve all learned to live with; we devote much of our day-to-day efforts to keep it within reasonable ranges.

Search engines have given us tools to minimize this waste: geo-targeting, day-parting, and—to a limited extent—demographic targeting. Correct use of such technologies does reduce e-tailers’ exposure to clicks with little conversion potential. Additionally, SEM agencies have developed proprietary software that couples ROI (or other meaningful success metrics) to spend levels, continuously adjusting campaign parameters to optimize conversion rates.

But determining—in advance—which clicks are worth bidding high for is still a maddeningly difficult task. We lack the “holy grail” enjoyed by offline marketers who target their DM campaigns to lists of qualified purchasers. The good news is that the gap between clickers and buyers in the online world is narrowing, and one great way to close this gap is search retargeting.

Search retargeting uses search query data to establish a user profile against which to target customized ads, which run across third-party (non-search) sites. This allows advertisers to apply the technology against much larger traffic streams. The real payoff for advertisers comes with the increased conversion rates associated with such retargeting, making their non-search ad targeting far more efficient than contextual targeting, and (according to early anecdotal tests), as cost-efficient as search itself.

Of the “big three” search engines, Yahoo has been the most aggressive in terms of offering search retargeting, and recently announced a major new service called Yahoo Search Retargeting, which uses search query data to retarget display ads through sites in the Yahoo network.

Because of search retargeting’s upside potential, third-party agencies and ad networks have also entered the search retargeting game, and you should familiarize yourselves with solutions from companies like Advertising.com and Audience Science (formerly Revenue Science). My own firm, Didit, has recently rolled out a product called Blizzard which incorporates retargeting. These new solutions go a long way toward reducing—and hopefully someday eliminating—the divides separating clickers, searchers (who you may or may not want to reach, depending on the price) and buyers (who you almost always want to reach, even if you must pay handsomely for the privilege).

Mark Simon is VP, industry relations at Didit, a digital advertising agency specializing in paid search. He can be reached at mark.simon@didit.com.