Understand The Incremental Value Of Your Remarketing Campaigns
Remarketing is a great way of advertising to people that are already familiar with your brand.
Large companies, as well as many small businesses, are spending a fair amount of their online advertising budget to get previous site visitors back to their site.
Often this leads to heaps of view-through conversions. Great, you might think, my remarketing campaigns are driving conversions for a significantly lower cost as my other PPC campaigns.
However, how many of these conversions would you get regardless of showing remarketing ads?
The Problem: View-through conversions don’t give a clear image of how well your campaigns are performing
The question you need to ask for display advertising is: who looks at your display banners and (eventually) takes action based on that.
Are your remarketing campaigns adding incremental value to your business, or are you just showing ads to people that would convert anyway.
The Solution: A/B test your ads vs a blank ad
The only way to understand the incremental value of your remarketing campaigns is by testing.
Don’t rotate ad 1 and ad 2 for the same audience list! Make sure that the people in audience list A only see your branded ad, and people in audience list B only see the blank ad.
Variation: People might start noticing a blank ad eventually, so you can add multiple variations (eg. using a charity or a stock image) of this one and rotate them for audience list B.
Obviously, the blank ad isn’t attributing to any of the view-through conversions that you see coming in.
So by comparing the view-through conversions of audience list A with audience list B you’d be able to see the incremental value of your remarketing campaigns.
Size of list
Audience list A
(your branded ad)
Audience list B
In the example above we split the audience 50/50 to show different ads to each half.
As a result, we have seen more view-throughs coming on the branded ad (as expected). In total there’s 201 view-through conversions of which 23 are incremental – we wouldn’t have got these if we didn’t advertise.
Therefore only 11.4% of the total view-through conversions
We can use the following formula to calculate the incremental value of our remarketing campaigns:
(Audience list A view-throughs – Audience list B view-throughs) / (total view-throughs) x 100
Extra: understand your conversion window
To do this test properly, it’s important to set a conversion window that is realistic to your business.
Too short means you miss out on valuable data, while if you set a conversion window that is too long it makes the numbers look better than they are.