by Freddy J. Nager, Founder of Atomic Tango LLC + E-Commerce Addict

I just had a shopping experience I can’t forget — and not because it was memorable in any way. I can’t forget it because the Internet won’t let me…

I decided I needed a new computer bag, so I hit up the usual suspects: Amazon, eBags, Zappos, and others. I finally found something I liked on Soccer USA, Inc. — but that hasn’t stopped eBags from stalking me.

The Creepiness Factor

eBags retargeting ad

Yes, I shopped for that bag. And had I wanted it, I would have bought it.

For the past 2 days, I’ve been seeing eBags ads on Facebook, all featuring the exact same bags that I looked at in detail. This kind of personalized advertising, called “retargeting” or “remarketing,” has some people humming Rockwell songs…

OK, maybe I’m the only one humming that, but others have spoken up about the creepiness factor. At a U.S. Senate committee hearing in 2010, Sen. Claire McCaskill said, “I understand that advertising supports the Internet, but I am a little spooked out. This is creepy.” Keep in mind that she ran against Todd “Legitimate Rape” Akin, so she knows creepy.

But unless the government actually does something, don’t expect these stalker ads to go away. That’s because they’re making some companies a lot of money — particularly one company that’s made consumer privacy its playground.

How The Facebook Cookie Crumbles

According to the Wired article “Facebook Is Quietly Making a Killing With Ads That Pursue You,” the social network has seen its flaccid stock perk up since launching its Facebook Exchange ad-bidding network. Retargeting ads are the star of that Exchange, since Facebook’s cookie (the code it places on your web browser) is supposedly more accepted than cookies from ad servers such as Doubleclick. Facebook users also tend to visit the social network frequently, which makes hitting them up easier…

Or so claim the retargeters:

“Ad retargeters also like Facebook Exchange because users are more engaged with the ads served there. Retargeted ads in general are already more relevant and clicked on by users, since they ‘know’ about some of your previous web surfing. This relevance helps take the edge off a retargeted ad’s inherent creepiness. On Facebook, retargeters say, clickthrough rates are further amplified, because the site is relatively conservative in the number of ads it shows and because users there tend to be more open to being distracted.”

There is so much wrong with that paragraph, I need to call in a CSI team for assistance. Well, my scalpel is sharpened — let’s dive in, shall we?

  1. “Users are more engaged with the ads served there.” Um, how do you “engage” with a tiny ad that’s not interactive? By glancing at it? At best, you can click on it, and the clickthrough rates on Facebook ads are so abysmally low (1 in 10,000 on average) that Facebook started hyping its ads in terms of “branding” and “awareness,” which I ridiculed in a previous post. The Wired article offers zero statistics of any kind on the performance of these retargeted ads, but if “more engaged” is around 1/10,000, I’d hate to see what “less engaged” means.
  2. “The relevance helps take the edge off a retargeted ad’s inherent creepiness.” Uh, hello, it’s the relevance that makes them creepy. If the ads weren’t relevant, they’d just be another untargeted ad.
  3. “The site is relatively conservative in the number of ads it shows.” Professor Augustine Fou and I found Facebook running as many as 10 ads on a page, and that doesn’t count the promotions running on the wall. That may be “conservative” compared to Times Square or a NASCAR vehicle, but Mark Zuckerberg is no shrinking wallflower when it comes to ads.
  4. “Users there tend to be more open to being distracted.” Distracted by our friends’ posts, perhaps, but NOT by advertising. I just mentioned the almost nonexistent clickthroughs; then there’s a recent study published by Harvard Business Review, “Targeting College Students on Facebook? How To Stop Wasting Your Money.” The authors point out that “many of the advertising dollars consumer goods firms spend on Facebook are likely wasted… as users seem disinterested in Facebook ads and disengaged from marketers’ attempts to build brands.”

Finally, the fact that marketers are buying up retargeting ads is not necessarily proof that they’re working. After all, marketers have also sunk money into such under-performing tools as banner ads, branded pens, and Donald Trump.

What Would Make Retargeting Worthwhile

Now I’m not really creeped out about retargeting ads. I understand how they work and how they handle user privacy. And unless someone’s looking over my shoulder, I’m the only one who sees the ads. Even if someone is looking over my shoulder, I don’t shop sites that would embarrass me (I just browse them for academic research — really). And since most people don’t notice the ads on their own Facebook pages, they likely won’t notice the ads on mine.

What’s bugging me about these retargeting ads is that they don’t serve the marketer well.

I don’t mind eBags trying to get me to return. Marketers should target their past and current customers. I just think eBags should also try to learn WHY I didn’t buy from them. At least one of their retargeting ads should say, “Thanks for visiting us! How could we have served you better?”

As you might have noticed, I tend to be opinionated, so when an ad asks for my opinion, its clickthrough rate goes up to about 100% or so.

In this case, I didn’t buy from eBags because they didn’t have what I was looking for – so why would a retargeting ad entice me to go back? I would welcome the opportunity to tell them what kind of computer bag I’d like (hint: something that doesn’t look like a murse — i.e. “man purse” — and that wasn’t designed by an adolescent Deadhead on acid).

I would also tell eBags that I already purchased elsewhere, so all their retargeting is just wasted money.

In sum, these eBags retargeting ads don’t get the hint because they don’t bother asking for one. The value of digital marketing is the ability to use all that “big data” to learn more about customers and their needs, interests, and behaviors. If all that data is simply being used to hit the customer up with more of the same, well, that’s not marketing — that’s nagging. The digital equivalent of a person who keeps following you around and asking you out on a date even after you’ve told them “no thanks.”

And, yes, that is creepy.

  • Excellent, brilliant article. Very educational and informative. Would be great to have your opinion on LinkedIn.

    • Thanks, Marianna. Although LinkedIn appears to have been designed by drunk monkeys (the layout and site architecture hide important information, and over-expose unimportant information), it’s my favorite social network because it actually brings me business. It’s also the most profitable of the social networks. I strongly recommend that every professional use LinkedIn, and not just to post a profile, but to actively participate in groups, and to share their expertise (such as their blogposts).

      • I am using it. Not my favourite due to technical limitations but perhaps I am not fully up to speed on them. As you mentioned the architecture is somewhat crazy. Hope you are well. I really love your article… Happy Holidays…

  • Dear Freddy (and Marianna)

    Thanks Freddy – great article and most amusing! I have to comment on linkedin’s new pricing strategy that completely underwhelms me. (I am a current student of yours from RKC so this is very topical for me). Linkedin summarily increased their job ad posts by 450% in South Africa with no warning, thus affecting the entire client base that hasd been using them loyally for years!

    I wrote the following (learnt from my interaction on the course with you currently):
    In the modern era sustainable marketing has become the hallmark of successful organisations. This includes sustaining the environment, sustaining the community and sustatining profits and a balance should be achieved between the three. Linkedin is clearly violating the loyal advertising community (job seekers and placers) through increasing the advertising cost from R249-95 to R1371-95 for one placement – a massive 450% increase! Seeking reasonable profits is part of good business but not at the expense of a community of loyal customers and at such greedy returns. If Linkedin wants to be part of the sustainable business environment, it needs to review this action immediately.

    This is the response I got back:
    “Hi everyone,
    I am a social media recruiting specialist here at LinkedIn. The reason for the price increase is as follows: for many years, South Africa enjoyed heavily discounted job postings. This was due to market penetration, currency and many other factors. However, with South Africa now being one of LinkedIn’s most penetrated and active countries, pricing has been adjusted to reflect the pricing that has existed in the rest of the world for a long time.

    Another important factor is that the online postings are by far not as effective as the professional solutions LinkedIn has to offer. So while they are nice as a”taster” or for companies who don’t publish jobs very often, it is definitely in our clients’ interest to speak with a consultant at LinkedIn and see what professional options they have. This can save them cash but first and foremost make them a lot more effective in using the tools social media recruiting has to offer. I hope this is helpful!”

    Well no it is not helpful – do you have any advice and words of wisdom I could send to the “social media recruiting specialist here at LinkedIn”?

    What do you think of a pricing strategy like this? Personally I hope companies like this are replced by better triple bottom line companies!

    • Chris, welcome to capitalism at work. When a company has you hooked, that’s when the real fun and games begin.

      • Yes I agree but if the customers and stakeholders are abused it creates a space for other companies to provide a better and more respected service. I detest monopolies and unfortunately the social media space migrates everyone to one provider ala Facebook (social), Google (search), Linkedin (professional). If these ‘monopolies’ are not socially responsible and do not promote sustainable marketing it flies in the face of the triple bottom line and takes ages to replace them eg. IBM before Apple

        Best regards
        Chris

        • Hey Chris,

          Evolution…some of these monopolies actually retain themselves for a while e.g. Apple, but see what happens now with BB10 and Samsung.
          As you said, customers are sensitive and go along with such approach for a while but then innovation happens and they walk. Whoever wrote you the email needs some 101 training. :-)

  • Frank Buddenbrock says:
    25 February 2013 at 4:58 pm Reply

    Freddy-

    Great blog post. I have similar feelings about retargeting, and talk about ads on Facebook- their click-through rate is horrendous. How can they brag about them and not feel embarrassed?

    A few of my clients still seem to be interested in marketing on Facebook, and I keep telling them it’s like being an insurance salesman at a block-party barbecue. Sure, there are a lot of people there, and they’re all very friendly. But guess what- nobody there brought their checkbook. They’re there to be social.

    And if you continue to try to make a sale there, you won’t be invited to the next barbecue.

Leave a Reply

Your email address will not be published. Website Field Is Optional