• by Jack Loechner , Staff Writer @mp_research, May 20, 2014

According to a new study by Chango with Digiday, among 400 media buyers, agency executives and brand executives, retargeting via mobile devices is an industry wide challenge, but the study shows digital media buyers are experimenting with paid social exchanges to fill the gap left by cookies. About 41% of both brands and agencies said they believe that social exchanges are “key” to retargeting on mobile devices, as these exchanges reach users regardless of whether they are at a desktop or on the go.

Even among those who were not sure if social is a silver bullet, many believed they would play a key role moving forward. Retargeting on mobile is still a risky endeavor, as the technology lacks a proven way to identify and target users, says the report. Social targeting, respondents said, could be a way around that.

In general, advertisers and their agencies are spending more money on paid social. About 38% of buyers are employing Twitter’s Tailored Audiences and 67% are using Facebook’s FBX to reach consumers.

Using social exchanges as a work around on mobile shows how fervently brand and agencies believe in retargeting as a tactic overall. Respondents to the April study said about 56% of brands and agencies rely on retargeting to acquire new customers, 42% use it build brand awareness and 46% to increase direct revenue. 11% of brands and 7% of agencies use retargeting to acquire their competitors’ customers.

Here are some key findings:

• About 41% of both brands and agencies said they believe that social exchanges are “key” to retargeting on mobile devices, as these exchanges reach users regardless of whether they are at a desktop or on the go.  
• In 2013, 89% of brands invested 0-20% of their online budget to mobile marketing while 9% placed 21-50% of their budget to mobile. In 2014, those numbers shifted: 73% of brands put 0-20% of their online budget to mobile while 26% moved 21-50% of their budget to mobile. 
• About 38% Advertisers and agencies of buyers are employing Twitter’s tailored audiences and 67% are using Facebook’s FBX to reach consumers.

Other findings include: 

• 63% of respondents take retargeting budgets from display advertising budgets
• 49% of brands and 68% agencies are moving dollars from display into retargeting
• 10% of agencies and 9% of brands give retargeting its own budget
• 33% of brands and 36% of agencies give paid social its own budget

For paid social and mobile retargeting, the size of the agency/brand investment effects expectations, and this is indirectly related to perceived success. There is continued uncertainty in mobile targeting: About 45% were somewhat successful in meeting their objectives with mobile retargeting.

More respondents see mobile targeting as soon-to-be mature practice (45%) or still experimental (34%). 17% believe mobile targeting is currently the standard practice. 4% are not sure. 41% of both brands and agencies believe that social exchanges are the key to mobile targeting success. For many of the 59% who said social exchanges aren’t the key to mobile success, it was the word “key” that was problematic.

When it comes to retargeting, the objectives are fairly traditional: Most use it for acquiring new customers, building brand awareness, or increasing direct revenue. Interestingly, 11% of brands responded that they use retargeting to acquire competitors’ customers (however, only 7% of agencies reported they were successful at that).

Most retargeting budgets are coming out of display budgets. Broken out between brands and agencies, the study found that 49% of brands and 68% of agencies are moving dollars from display into retargeting. Interestingly, 10% of agencies and 9% of brands say that they have their own retargeting budget.

Most brands and agencies are conducting site and search retargeting (88 and 65%, respectively). However, about 33% of agencies and 22% of brands are using creative retargeting. The discrepancy is perhaps due to the rise of content marketing and native advertising. Only a quarter of total respondents chose email retargeting as a tool they’re using.

57% of the respondents are using both click-through and view-through as measurements for their retargeting efforts. Each has its strength: click-through is great for direct response, and view-through is used to quantify the value of an ad impression over a period of time. But with almost six in 10 brands and agencies choosing both, this could imply that digital is a broader canvas than typically thought of.

Retargeting is definitely a known-entity for marketers, says the report. There is opportunity, though, in finding ways to retarget across device (i.e. mobile) and platform (i.e. social).

Barry Lowenthal, president of The Media Kitchen, thinks “… the key is much better targeting… in the past year… Facebook and Twitter have  gotten much better at targeting… Pinterest has been talking about it and planning on changes… Social has gotten better… LinkedIn within the last year has done paid posts… there’s a lot more ways to monetize social… and do much better targeting… ”

The outlook for paid social is optimistic. It’s still a very new arrow in the marketer’s quiver, says the report, but overall, many brands and agencies are bullish on paid social marketing. Investments in paid social are slowly increasing, though it must be noted that brands and agencies had a lot of ground to make up for since not much money was allocated to it in 2013. 2014 has seen a moderate increase, with paid social marketing becoming more of a mature marketplace, and Facebook  biasing promotion toward paid posts.

Much like retargeting, paid social marketing budgets often come from display advertising budgets. Unlike retargeting, a whopping 30% of total respondents said paid social marketing has its own budget (only 9% said retargeting has its own budget). Diving deeper, a third of brand respondents said they have their own paid social marketing budget; agencies clock in at 36%. 

The study found that the more money a brand or agency threw at paid social in 2014, the lower the expectation of success. Translation: Smaller investments lead to lower expectations, and brands and agencies are more likely to meet smaller, more focused objectives. The lower the amount spent, the easier it is to see an actual effect.

Bigger picture though, says the report, paid social is growing to be an important part of a brand’s overall strategy and is moderately successful in meeting objectives, according to respondents. Results of the survey also found that people seem to place significant value on paid social targeting. About 80% of brands and 92% of agencies reported that paid social is at least somewhat important to their marketing strategy.

When it comes to the perception of success of mobile targeting, results show there is still uncertainty: 45% said their mobile targeting efforts were somewhat successful in meeting their objectives; 29% said it was successful; only 8% said it was very successful. For a segment plagued with uncertainty, these are fairly strong results, opines the report.

The report concludes by noting that

• Desktop retargeting (such as site, search, etc) is more mature than social or mobile, though budgets continue to increase. Retargeting budgets are still being pulled from display, even though a tiny sliver of brands and agencies report having separate retargeting budgets. When it comes to measuring the efficacy of retargeting efforts, most brands and agencies are using a combination of clickthrough and view-through, implying a multi-tiered objective for retargeting: both direct response and brand awareness.
• Social targeting can be a big boon to mobile retargeting efforts. As social platforms lose organic reach, it may be necessary to develop a paid social marketing program. More and more people are spending their time consuming content on their mobile devices, and this will inadvertently boost mobile targeting. Having the ability to target consumers through social platforms like Facebook and Twitter’s Tailored Audience means that no matter the device a consumer is on, they can be targeted again and again with the right messages
• Mobile retargeting needs this to happen, as the hurdles to retargeting on mobile devices are numerous. Brands and agencies need to prepare for this coming change. Budgets are quietly moving from different areas, like display, into social. Paid social teams are being formed at agencies, which is an acknowledgement that the times are changing.

To access the State of the Industry Retargeting Report, with charts, as a PDF file, please visit Chango here.