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A few weeks ago I was shopping online for portable DVD players for my kids and went to a few sites including Overstock.com. And low and behold, today I saw an ad for portable DVD players for Overstock while reading TechCrunch — the ad was displayed on TechCrunch.com. This kind of behavioral ad targeting is not rocket science but it works (generally). One important consideration is that re-targeting of online users for specific product categories should begin ASAP while the prospect consumer is still in the market. For the DVD player, that’s not me anymore. I found a good deal and bought a SONY unit two weeks ago. But Overstock’s re-targeting ads didn’t launch until (or hit my radar) until today. I’m out of the market now; they missed their chance with me. They should consider launching waves of ads to include merchandising of related products over time. They should know from collaborative filtering that people who bought portable DVD players are also likely to buy X, Y or Z. The ad I see weeks after visiting their site should feature these other products. Call it cross promotion ad retargeting.
Recently a partner at a VC firm told me that his portfolio companies in the behavioral re-targeting area are tearing it up. Revenue is rolling in nicely, even in a soft market for advertising overall. No surprise, re-targeting done right can reduce cost per repeat user significantly (in the mid double digits from my experience). But make sure that you get out of the gate quickly while your target audience is still in the market.
On the opposite end of the spectrum is an ad for a major telecomm company that I keep seeing, like every two seconds, as I surf the web — ever since I visited their web site a month ago. I spoke with the head of media at that company and suggested they implement a frequency cap (since they keep paying for ad impressions again and again). She said that due to the number of ad networks involved, instituting a frequency cap across the board is challenging. I’d be interested in hearing everyone’s thoughts on that and how they’ve handled that issue.
Bottom line: re-targeting web site users long after they’ve left your site can be a great way to keep your brand top of mind among users already pre-disposed to your brand. In addition, it has the benefit of lifting overall sales conversion rates among customers who may have abandoned your site for reasons that are no fault of your own — like when a child interrupts their parent’s e-commerce session to ask for a DVD player. 
Check out: Fetchback, Audience Science and mediaForge. Now even Google is getting into the game too, enabling you to serve up retargeted ads via their content network.
BradMehl.com 
Hello there. Great post. Retargeting can be a very effective online marketing strategy. It’s a win-win for both advertisers and consumers, if you think about it. It allows advertisers to place relevant ads in front of visitors who currently have a specific product in mind. Also, consumers can benefit from discounts and promotions that are displayed on retargeted banners.
Great points and thanks for writing. Re: the ‘global frequency cap’ issue — this is a challenging issue to address. Most astute advertisers are using multiple ad networks to get out their message and optimizing their spend across the various networks. Frequency caps can be set with each one individually, but there is no global frequency cap. The solution to this problem lies in retargeting platforms (like http://www.adroll.com where I work) and the ability to do real-time bidding (RTB). This allows a technology platform to bid across multiple networks and set a global frequency cap simply by not bidding if the user in question has already seen a few ads. Not all of the networks support real-time bidding just yet, but give it a few months and this technology will be more readily accessible.
-Josh
Excellent article! Your example about timing ads to customer behavior is often overlooked. They key to retargeting success, as mentioned by Josh, is a powerful retargeting platform combined with in-depth analytics (see http://www.fetchback.com, where I work). Optimizing both the ad frequency and and ad placement timeline is absolutely critical for effective retargeting.
As for ‘global frequency caps’, it is much easier for retargeting providers to set those with their network partners than for individual companies to set that up on their own. A ‘self-service’ approach to retargeting is often extremely difficult.
-Tim
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