How Yahoo's Search Retargeting Platform Delivers Many Happy Returns

by , Mar 31, 2010, 2:17 PM
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Advertisers have finally begun to consider search retargeting as a way to increase accuracy when targeting ads. They're still not ecstatic about the increase in price, compared with serving up plain old ads, but how can they ignore talk of campaigns that begin with $168 cost per acquisition and fall to $29, and .93% conversion rates that rise to 6.93% within one month?

Consider how Yahoo's retargeting platform helped Value City Furniture, whose parent company, American Signature, is reportedly ranked as one of the largest furniture retailers in the country. Value City Furniture decided to launch a promotional sweepstakes that gave away six $2,500 shopping sprees during the fourth quarter of 2009.

When customers responded to the promotion, Value City Furniture captured data that allowed it to prescreen applicants for its private-label credit card offering. It also used the data to retarget visitors who engaged with the ad but didn't convert.

The goal to increase registrations for pre-approved Value City Furniture credit applications and in-store sales through its online channel led the retailer to tap Yahoo's My Display Ads for a retargeting and sponsored search campaign. The company saw its site and sweepstakes registrations increase by 650%.

Value City Furniture had a 5% conversion rate, with a CPA of $32, when the campaign began. After one month, the company had a 14.5% conversion rate and a CPA of just $12. Yahoo and Value City Furniture developed a Sponsored Search campaign that included 200 branded keywords to help promote the sweepstakes and its overall business. The campaign found display drove search activity, with a 168% increase in branded term searches. As a result, the company increased its display budget by 30%.

"It's becoming easier for advertisers to take a data set and activate it against all inventory in the company's target markets," says David Zinman, vice president and general manager for display advertising at Yahoo.

Cycle back to 2006, when Zinman offered retargeting at Blue Lithium and advertisers had to approach each online ad network, pull a pixel, and hope it could cover the majority of the ad impressions online. It's much easier to ensure coverage today, he says.

That assurance has prompted more than Value City Furniture into retargeting and search retargeting. Companies such as Travelocity have also jumped into the fray.

"Marketing to people who have already been to your site is a very effective form of advertising and driving conversion," Zinman says. "There's really not resurgence, it's just always been up and to the right on the chart for money spent on retargeting."

Yahoo added search retargeting in 2009, but began to push it into the marketplace in January 2010. It allows Yahoo's engine to target everyone who searches on relevant keywords and then targets them with display advertising.

Google's AdWords and the startup Magnetic also offer this service.

Yahoo moved toward offering clients retargeting with the acquisition of Blue Lithium in October 2007, but tweaked the technology in February 2009, adding search retargeting and dynamic ads. "Search retargeting has a lot of potential and growth ahead of it, mainly because it's so new," Zinman says.

0 comments on "How Yahoo's Search Retargeting Platform Delivers Many Happy Returns".

  1. Gabe Elliott from Vision Media Interactive
    commented on: March 31, 2010 at 5:07 p.m.

    This was a great win for my client. VCF initially started a fairly robust search campaign early last year but made the jump to display advertising in late Q4 '09. Like many advertisers utilizing search as a performance channel, there was apprehension as to whether the display campaign would perform as well as the search in terms of a CPA. It did, and in fact, the retarget campaign is currently out performing search.

    This is strong evidence that search marketers should not disregard display advertising as a performance solution. With the limited scalability of search, many of my clients here at Yahoo! are looking for additional solutions to efficiently increase revenues and are finding great success with targeted display ads.

    We are testing some of the other Yahoo performance oriented solutions with some great success and I’m looking forward the next case study.

    Check out the original post on the Yahoo Advertising blog.

    http://www.yadvertisingblog.com/blog/2010/03/16/getting-your-offline-online/#more-1139

  2. Mark McLaughlin
    commented on: March 31, 2010 at 10:44 p.m.

    The results described are not amazing. Advertising works and smart advertising really works.

    What is amazing is that Yahoo had a client willing to let this kind of data be used publicly.

    My four years at Yahoo showed me that the best and brightest online advertisers enjoy the unique stealthiness of this channel and take great pleasure in the idea that their competition has no idea what they are doing.

  3. Frost Prioleau from Simpli.fi
    commented on: April 1, 2010 at 3:55 p.m.

    Great article.

    Retargeting is a tried and true approach that normally yields great results. However, to date retargeting has been limited by a couple of factors: 1) the reach of the network to find users again on the web so that the retargeted ads can be served; and 2) the often-limited size of the user pool that has visited the advertisers site.

    The reach issue is being solved by the growing pools of real time biddable (is that a word?) and exchange inventory.

    Our company, Simpli.fi, is working on the second problem by enabling advertisers to target display ads to all users who have searched on their desired keywords...not just the users who have clicked through to the advertiser's site.

    We're in beta now...and will have more to report shortly!

  4. Gabe Elliott from Vision Media Interactive
    commented on: April 1, 2010 at 4:22 p.m.

    I agree Mark that this and other Yahoo! solutions have been 'stealthy' for marketers. The problem with that is that Google gets blasted all over the media as the greatest thing ever while untold marketers are having great success here at Yahoo!. Our mission is to try to generate awareness to the small and mid market and let them know that although we may 600 Million users, we're here for them as well. In this economy we need to do all we can to stimulate the market both from a demand for product standpoint, to strong advertising ROI.

    Thanks Laurie for doing your part by the way and we appreciate your articles.

    Gabe

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