Remarketing – does it work?

remarketingIf you go to Amazon and browse watches, you will suddenly notice a preponderance of watch ads everywhere you go on the Internet. This is ‘remarketing’ (also known as ‘retargeting’ or, more colloquially, ‘cyber stalking’). Wikipedia defines it as:

a form of online targeted advertising by which online advertising is targeted to consumers based on their previous Internet actions, in situations where these actions did not result in a sale or conversion.

Given that:

a) It is hard work to get potential purchasers to visit your website

b) some 99% of visitors to a typical website leave without buying anything

It seems to make sense to spend some time and money reminding non-purchasers to come back to your website in the hope that they will eventually purchase.

The basic mechanics of remarketing are:

  1. Sign up with a remarketing publisher such as Google, Perfect Audience or Adroll.
  2. Upload some graphical ads.
  3. Bid to show these ads on other sites.
  4. Add a script on your site which cookies visitors for remarketing.
  5. When your visitor leaves your site and goes to another site in the remarketing publisher’s network, the remarketing cookie is read and an ad is shown (or not, depending on how much you and other advertisers are bidding per impression).
  6. Hopefully people will see your ad, click through and buy your product. Or they may just be reminded to continue the trial, without clicking the ad.

A number of people I have spoken to told me it was very cost-effective. But when I asked how they knew that these remarketing conversions wouldn’t have purchased anyway, I didn’t get a satisfactory answer. It seems straightforward enough to test this: run an A/B test, showing remarketing ads to 50% of your visitors and see what difference it makes to conversions. But an online search and some asking around turned up very little data. The one decent study I found quoted an 18% increase in conversions (yes please!), but was for an ‘e-commerce website’. So, dear reader, I have done the experiment using Perfect Audience for remarketing, Visual Website Optimizer for A/B testing and my table planner software as the subject. Here are my results:

visits sales conversion
Control (No
remarketing )
10,539 162 1.54% (±0.15)
Remarketing 11,137 174 1.56% (±0.15)

So the remarketing showed an increase in sales of 1.6% over 21,676 visits and 336 sales. However it is noticeable that the 95 percentile error bars are rather large compared with the conversion rates. I am only 95% sure that the conversion rates are in the range 1.69% to 1.39% (control) and 1.71% to 1.41% (remarketing). Which means the change in conversion rate could be anything from +23% to -19% (but given normal distribution curves, most likely somewhere in the middle). According to Visual Website Optimizer, we can only be 56% sure that the increase in conversions is a real effect, and not just a statistical anomaly. The graph below shows the convergence of the conversion rates over time (blue is the control, orange is with remarketing).

remarketing experimentIt gets worse when you factor in the cost of the remarketing. I know the value of the sales and the cost of the ads over the period of the experiment. So I can work out that for every $1 I spent on remarketing I was getting around $0.95 back in extra sales. It isn’t looking like a winner for me, especially when you factor in the time taken to set-up and administer it.

Some points to note:

  • Remarketing resulted in 1.8% less installs than the control. This is probably just a statistical anomaly (67% chance of being statistically significant).
  • I choose Perfect Audience based on the recommendation of Rob Walling, who has experimented with Google, Adroll, and Perfect Audience. Unlike Google, Perfect Audience allows remarketing across a wide range of platforms and websites, including Facebook and Twitter. I found their system to be relatively flexible and easy to set-up. But being billed weekly is a bit tedious for my bookkeeper.
  • I showed my ads on Facebook and various websites. I didn’t show them on Twitter as my previous experiences with advertising on Twitter haven’t been great.
  • With remarketing you pay per impression, not per click. I set my CPM (cost per thousand impressions) relatively low. I ended up averaging $1.55 for web ads and $1.14 for Facebook ads.
  • Click through rates were miserable, averaging just 0.051% for both web and Facebook ads.
  • The average cost per click was $2.58. This is a lot more than I pay per click on Adwords.
  • I remarketed to people that arrived on my home page. I stopped targeting them after 30 days or after they had purchased.
  • I didn’t remarket to visitors from developing countries, as they very rarely buy my software. Had I remarketed to visitors from every country the remarketing conversion rate would probably have been slightly higher, but the ad costs would have been significantly higher.
  • I didn’t get any complaints from customers about being ‘stalked’.
  • I just knocked up some ad graphics myself (examples below). I got the idea for an attention-grabbing ugly ad here. It didn’t perform well though.


ugly handwriting 300x250 3I probably could probably improve the ROI on remarketing with some experimentation. E.g.:

  • Trying professionally designed ads.
  • Trying different bids.
  • Experimenting with only showing ads to people who have installed the trial vs only showing ads to people who haven’t installed the trial.

But it doesn’t really seem worth the opportunity cost given the results to date.

Of course, my experiment is just one data point. Remarketing might work better for you if you have a higher average lifetime value for a customer (many of my customers buy the $30 version of PerfectTablePlan for their wedding and never purchase from me again). If you have a B2B product with an average lifetime value in the hundreds or thousands of dollars, it is probably worth a try. You will have to run your own A/B test to find out. If you do, please let me know what the results are.

7 thoughts on “Remarketing – does it work?

  1. Clay Nichols

    Thanks. That may have saved me a lot of work. I, personally have never clicked on a remarketed ad so I thought they had little value (and some folks find them creepy).

    It seems like a much better approach would be to find another way to make your site sticky.
    I know that’s not easy.

    It seems like the trick is figuring out (yeah, good luck!) WHY they left:

    1. It’s what they needed but the PAGE FAILED to convey that quickly enough.
    (That seems unlikely for you Andy but I am AMAZED at how dense some visitors can be. (check our our ) someone contacted us and asked “Where do I get your free speech therapy program”). (More about that in my example #3 below)

    3. PRICE WAS TOO HIGH (maybe they were looking for free ?). (It’s software, it’s free, right??)


    1. had one of those annoying drop downs when they start to leave that offers free whitepaper: tips like “Top 10 seating mistakes”.
    2. Just offer that free white paper on the page (this is a tricky one b/c you don’t want to distract from an actual purchase.
    3. Annoying drop down on “attempt to exit” that asks them about the above possible reasons. (BTW, we do this and one person said “where do I get your free program”. They asked this on a page that said “Speech & Language Recovery” with a big yellow button “Start now (free)”.
    Ironically, after years of people being confused by the concept of downloading, now they seem to be confused by the concept of “it runs in your browser, no download needed”. Sighh…
    But,… this was instructive. I have since changed the subtitle from “Fun, effective practice for …” to “Fun, effective Web-App for …”

  2. Andy Brice Post author

    >It seems like a much better approach would be to find another way to make your site sticky.

    Increased ‘stickiness’ and remarketing could compliment each other.

  3. rudni4ok

    Andy, what was the behaviour of the remarketing ad? Simple “You’ve been on my site, see the ads everywhere”, or something more complex?

    Have you tested “smart way” of showing ads? F.ex.:
    1) User visited site, but have not downloaded.
    Show the ad: Still planing your wedding? Download minibook about 10 common mistakes brides usuanny do.
    To download, email should be leaved. Then you do special offer by email.

    2) User downloaded, but not installed.
    Show the ad: You’ve downloaded PerfectPlan but not installed. You loose the easy way to organize your wedding, clink to know why.
    On the lending you sell anvantages of the software again.

    3) User downloaded, installed, but dodn’t bought
    We are waiting for 21 days, and then show -50% offer

    4) User downloaded, installed, visited buy-now page, but dodn’t bought
    We are waiting for 2 days, and then show -50% offer

    1. Andy Brice Post author

      I tried a slightly more sophisticated strategy to start with, emphasis the trial if they hadn’t installed and the sale if they had. But it was harder to test (and the results didn’t look good). So I tried the simpler approach described here. Based on the result so far, I don’t think retargeting is the best use of my time and money. YMMV.

      The problem with offering a PDF or similar to lure people in is that I sell into lots of different verticals.

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