Retargeting as a form of digital marketing. Function, advantages, and disadvantages

Contents

List of illustrations

1. Introduction

2. Conceptual- systematic demarcation
2.1 Digital marketing
2.2 Web analytics

3. Retargeting - a form of digital marketing
3.1 Function of Retargeting
3.2 Advantages and Disadvantages of Retargeting

4. Data privacy and cookies

5. Conclusion

References

List of illustrations

Illustration 1: simplified illustration of retargeting

Illustration 2: worry about misuse of personal data

1. Introduction

Today, digital marketing is more common than offline marketing. This makes sense, because most people are online all day long. Whether it is with their smartphone or with other devices. Digital marketing offers numerous opportunities to advertise and represent companies. One of these opportunities is what we do every day by surfing the Internet. Recently, when we visit a website, the first thing we see is a pop-up or a message on the edge of the screen telling us to accept cookies. Everyone finds it annoying and simply accepts them without knowing exactly what they are accepting at that moment. Unfortunately, these cookies are not the ones you can buy in the supermarket around the corner. These cookies are advertisements that are created specifically for us.

What the cookies can do and what this form of digital marketing is called is dealt with in the seminar paper.

2. Conceptual- systematic demarcation

2.1 Digital marketing

Digital marketing describes marketing activities that are implemented on the internet.¹ It is different from offline marketing and is divided into areas such as email marketing, influencer marketing, social media marketing and many more.² Since the Internet is so diverse, companies are constantly finding new innovative ways to advertise.³ The central focus of digital marketing is communication policy. After all, anyone wishing to attract new prospects, enquirers or orders should draw attention to themselves online.⁴ With a small budget it is possible to effectively draw attention to the offers of your website.⁵ Retargeting as a form of digital marketing offers companies an excellent opportunity to address desired target groups.⁶ Whether a company makes optimal use of the various possibilities of online marketing is shown by measuring success. Because here, too, companies have a variety of options for measuring the success of the measures.⁷ These measurements are the web analyses in digital marketing, which are defined below.

2.2 Web analytics

Web Analytics is the continuous and comprehensive controlling process from planning to the measurement and correction of key figures that quantify the success of a website.⁸ Web Analytics is not only a counting system that programs in and for a website will.

Three very decisive elements decide about success or failure:

- defining the objectives
- analyzing the results
- preparing decisions to optimize the means of communication

A web analytics tool typically examines where visitors come from, which areas of a website are visited and how often and how long categories are viewed. Different methods are used to evaluate the user behavior.⁹ In the course of the seminar paper the method of retargeting and the associated cookies will be explained in detail.

3. Retargeting - a form of digital marketing

3.1 Function of Retargeting

Retargeting is the simplest of the personalized marketing strategies often used in e-commerce.¹⁰ Users or their end devices are marked accordingly when visiting a website.¹¹ This marking is usually caused by the acceptance of cookies.¹² Retargeting means the delivery of content or advertising material to a returning visitor who has already taken a certain action on an advertising material - So a digital interest-based memory.¹³ If retargeting is used not only on your own website, but also involves advertising networks, the visitor can also receive an advertisement as a banner on a website in the advertising network.¹⁴ The corresponding products or services of the visited website are then displayed to the user again.¹⁵ Therefore, an order that was not completed on the first visit can still be placed later, for example, when:

- an article is in the shopping cart, but was not bought
- a certain category was viewed in the web shop
- a specific service or similar was sought¹⁶

Serious marketers today use retargeting as an important tool to increase their sales and customer loyalty.¹⁷ To use retargeting, there should be at least 50 000 unique users per month and website.^{18 19}

The following figure shows how retargeting works in a simplified way.

Abbildung in dieser Leseprobe nicht enthalten

illustration 1: simplified illustration of retargeting19

For example, an Internet user (1) visits an automobile manufacturer's website where he looks at a specific vehicle (2). This information is now stored in a profile database. Without further action, the Internet user leaves the website (3) and continues to surf on other pages. On a page of the advertising network, the user is now identified as a visitor to the website of the car manufacturer who has placed banners for test drives in this network (4). The visitor is immediately shown banners for the last vehicle viewed, with the option of arranging a test drive.²⁰ In the best case the Internet user thinks again about the offer and books a test drive for the previously viewed vehicle.

However, we do not only notice advertising on other websites, but also increasingly on social media networks.²¹ If the user was in different online stores and looked at certain products there, he will find the matching advertising on his timeline in the social network.²²

Retargeting is basically inexpensive and therefore offers an excellent opportunity for online marketing. Many providers offer Retargeting first free of charge. Fees only arise for the generated clicks. Retargeting is therefore cheaper than, for example, influencer marketing or affiliate marketing. With retargeting, companies can reduce their advertising costs and increase their sales at the same time.²³

3.2 Advantages and Disadvantages of Retargeting

Whether for companies or self-employed persons: Retargeting offers many convincing advantages. Nevertheless, there are also some negative factors that need to be taken in consideration before using this marketing strategy.²⁴

Retargeting is ideal for increasing brand awareness and visibility on the Internet. Through constant contact with the ads, recognition value can be created. The more often potential customers come into contact with the brand, the better they can remember it.²⁵ Retargeting leads targeted visitors to the website and thus increases the website traffic and conversion rate.²⁶ The conversion rate determines the percentage of potential buyers who become buyers when they visit a website or generally perform a certain action.²⁷ Only about 2% of visitors make a purchase on their first visit. Retargeting gives you the chance to bring the remaining 98% back to the website and increase the probability of a purchase.²⁸

[...]

¹ A.u. (n.d.): https://onlinemarketing.de/lexikon/definition-online-marketing

² See ibid.

³ See ibid.

⁴ See a.u. (n.d.): https://www.onlinemarketing-praxis.de/glossar/onlinemarketing

⁵ See a.u. (n.d.): https://www.onlinemarketing-praxis.de/basisinformationen/die-moeglichkeiten- des-onlinemarketings

⁶ See ibid.

⁷ See ibid.

⁸ See Amthor, A., (2010), p.6

⁹ See a.u. (n.d.): https://www.onlinemarketing-praxis.de/glossar/web-controlling-web-analytics- web-analyse-traffic-analyse

¹⁰ See a.u. (n.d.): https://onlinemarketing.de/lexikon/definition-retargeting

¹¹ See ibid.

¹² See ibid.

¹³ See Amthor, A., (2010), p. 159

¹⁴ See ibid.

¹⁵ See a.u. (n.d.): https://onlinemarketing.de/lexikon/definition-retargeting

¹⁶ See a.u. (n.d.): https://onlinemarketing.de/lexikon/definition-retargeting

¹⁷ See Amthor, A., (2010), p. 159

¹⁸ See ibid.

¹⁹ Included in: https://blog.adstage.io/expert-ppc-marketers-retargeting-guide-for-facebook

²⁰ See Amthor, A., (2010), p. 159

²¹ See a.u. (n.d.): https://datenbanken-verstehen.de/lexikon/retargeting/

²² See ibid.

²³ See a.u. (n.d.):https://kundenwachstum.de/retargeting/

²⁴ See ibid.

²⁵ See ibid.

²⁶ See ibid.

²⁷ See a.u. (n.d.): https://onlinemarketing.de/lexikon/definition-conversion-conversionrate

²⁸ See a.u. (n.d.): https://kundenwachstum.de/retargeting/