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Is Facebook Retargeting Hitting Saturation Point?

facebook-retargeting-advertising

Is Facebook Retargeting Hitting Saturation Point?

Written by on 7 February, 2014

Retargeting may have emerged as the darling of Facebook Advertising (and at least to some extent the saviour of its ailing stock price) but as with all advertising channels it has a saturation point where its effectiveness plateaus. With retargeting on Facebook, for me that point will come where retargeting becomes the norm, not the exception.

Looking at my own Facebook feed, virtually every ad I see now is being retargeted at me using Facebook Exchange, rather than using Facebook’s in-built audience targeting.

retargeting-on-facebook

If you think back to when Facebook first launched ads, pre-IPO, the buzz was all around the possibilities of targeting adverts at Facebook users based on their demographic profiles and interests. It sounded like a strong proposition at the time but in reality it never proved as effective, or profitable for Facebook, as people expected. This was due to a couple of factors;

  1. Extremely low CTR’s associated with the right-hand side rail ads on Facebook pages
  2. A benchmark for CTR, CPC and conversion rates set against Adwords – Facebook was offering CPC pricing so the comparisons to Adwords were natural, although Facebook ads were never going to work as well as search ads. The comparison was totally unfair.

When Facebook opened up to retargeting and in particular native newsfeed ad unit retargeting the results we saw took everyone a bit by surprise, it worked really well. However;

  1. This was against a low benchmark of non-retargeted ads
  2. Only a small % of the ads being displayed at the time were using retargeting, most were still using standard audience targeting

Retargeting is great, but it has its limitations. You can’t build an audience with retargeting, you need visitors and a good number of them to retarget to. You get these visitors using other, apparently less effective forms of advertising. The thing people often forget with retargeting is that the initial visit is as, if not more important than the return visit triggered by the retargeting. If it wasn’t for that initial visit, you wouldn’t be able to retarget that person, so its easy to give retargeting the credit, but actually you should only ever look at retargeting as a way to increase the effectiveness of your other advertising and marketing.

Some Facebook retargeting is just plain weird. Not only is this an ad for a hotel I've never looked at, its not even got the language right.

Some Facebook retargeting is just plain weird. Not only is this an ad for a hotel I’ve never looked at, its not even got the language right.

I 've been a customer of this company for several years already so its probably not worth them retargeting me

I ‘ve been a customer of this company for several years already so its probably not worth them retargeting me

So back to Facebook and those retargeting ads – at a point where the majority of Facebook ad inventory seems to be going to the retargeting suppliers who can afford to bid so much more for the best ad slots, surely Facebook ads will lose their edge again? When 1 in 5 ads is for a website you’ve just come from it jumps out and implores you to click. When the sidebar on your Facebook feed reads like your internet browsing history, the ads for sites you haven’t visited are going to be the ones which stand out from the crowd.

As much as I’ve endorsed the use of Facebook retargeting in the past (and continue to do so), I think the way many advertisers seem to be using the channel is flawed.

Primarily this comes down to a simple, but often ignored principle:

A website visitor does not constitute a potential lead

Just because I visit your website and leave without buying it doesn’t mean I’m a hot prospect who you should retarget until the cows come home.

However if I;

  • Spend 10 minutes browsing, visit 10 pages, then your contact page and don’t convert
  • Add an item to my cart, get to stage 2 and drop out
  • Visit multiple times in one day
  • Share a link to a page by email or social media
  • Download your sales brochure

Then there’s a good chance retargeting me will be worthwhile. Most people aren’t going to show strong buying intent on more than a few websites within a reasonable retargeting time window. And as such there should only be a few advertisers at any one time who should want to retarget the same user. If as advertisers we’re using retargeting correctly, and sparingly. And if we’re properly attributing retargeting sales back to the first click instead of getting all excited about having retargeting ads with a 5% conversion rate, then they’ll be enough inventory for everyone to enjoy the benefits of Facebook retargeting without it hitting saturation point.

If we continue down the road we’re on at the moment where advertisers are throwing money at retargeting ads because they’re not attributing their sales correctly then pretty soon we’ll get to the point where Facebook will only be serving retargeting ads and the effectiveness of everyone’s campaigns will be eroded. Either that or Facebook will need to limit the amount of inventory available to retargeters via the Exchange and make more space for advertisers who want to reach new audiences.

Author: John McElborough

+John McElborough is co-founder and MD of Inbound360, a London based PPC agency. John has been building and marketing websites for over a decade and has consulted for some of the UK’s largest brands on PPC and digital strategy. His work has been published on leading industry sites including SearchEngineJournal, Social Media Today and Moz.com as well as his own Marketing For Growth” blog

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