Use of Consumers’ Browsing Data for Dynamic Retargeting

By: Bharat Mahajan

Thanks to the digital revolution, and companies like, Amazon, Kayak and Trip Adviser, a vast majority of customers are using the Internet to research and purchase their goods. On the one hand, this has made customers’ shopping easy; on the other hand, the advancement in technology has given companies all kind of tools to gather data about their targeted consumers. Today, data is gathered through a company’s website, as well as other websites. As the data overflows, it is very important for marketers  to understand and use it to have maximum impact.

Anja Lambrecht & Catheine Tucker, in their paper ‘When does Retargeting Work? Information Specificity in Online Advertising,’ discuss the marketing strategy of gathering consumers’ browsing data from a company’s website and using that data to show consumers personalized advertisements on external websites. This is also known as Dynamic Targeting. The general working principle of dynamic targeting is that when a consumer views a product on company’s website, the company sets a cookie on the consumer’s computer to collect data about consumer’s subsequent browsing behavior. If the consumer visits an external website where the company is advertising, the cookie would trigger an advertisement specific to that customer for the product he/she was browsing earlier.

Earlier work – by researchers like Hoffman, Novak, Criteo etc. – which is referenced in this paper, reports that the personalized retargeted ads are more effective than generic ads. However, Lambrecht & Tucker argue that the research so far could not determine if consumers are always receptive to these very specific advertisements, or if their response is based on their product related knowledge.

The field study conducted by Lambrecht and Tucker concentrated on a travel website, focused on beach vacations, and studied the effects of generic and dynamic retargeting. While the generic image showed a standard beach-type holiday, the dynamic retargeted ads displayed the hotel that was previously browsed by that custom on the firm’s website. Alongside, three similar hotels were recommended. The objective was to understand whether and when the data gathered from browsing history should be used for generating consumer specific advertisements.

The results showed that dynamic retargeting only worked when the consumers had a well-defined product preference and were actively researching the product. The generic advertisement got a better response when the consumer lacked well-defined product preference or if they were still evaluating the product alternatives, as it appealed broadly to their needs. To better understand whether or not the consumer had a well-defined product preference, Lambrecht and Tucker argued that if the consumer is reading the reviews the probability is high that he/she is actively researching the product (and, thus, dynamic retargeting might be a better option).

The research performed by Lambrecht and Tucker not only highlights the technological advances in consumer data collection that are available today but also emphasizes how that data can be stored, analyzed, and processed to get the best results. The results also show that the consumer data, if not used without better understanding the consumer, could cause ill effects on the targeted consumer, just like using dynamic retargeting without knowing if the consumer has a well-defined product preference, or not, could be detrimental to overall marketing efforts.

References: Anja Lambrecht and Catherine Tucker (2013) When Does Retargeting Work? Information Specificity in Online Advertising. Journal of Marketing Research: October 2013, Vol. 50, No. 5, pp. 561-576

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5 thoughts on “Use of Consumers’ Browsing Data for Dynamic Retargeting

  1. Maheshwari Zala November 17, 2015 / 9:07 pm

    Very well written blog. I have experienced Dynamic retargeting many times. We travel a lot and whenever we are searching for hotels, we easily find 1 which we are looking for and in no time we are able to book it. It definitely benefits company as well as customers like me. Sometimes customers add products to their shopping cart and do not check them out and then leave the site. With dynamic retargeting such potential customers can be converted into real customers with more specifics on the brand and the products they are interested in purchasing. Companies usually send email or else immediately show that product in the recommended products which appears on either sides of the screen. I have experienced this with Amazon and Macy’s. Amazon sends email saying that you were interested in this product and we thought to remind you if you are still interested in buying this product. This is a great strategy for companies to turn their prospective customers into real customers.

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  2. Matthew E. Dulac December 4, 2015 / 8:14 pm

    I feel that dynamic retargeting is a very interesting topic and I found this article and presentation to be well done. This form of targeting makes it easier to look for the products you want and makes it even easier to purchase the products that you want which is a huge bonus for the consumer. Dynamic targeting makes it much easier to find new customers and to ensure that they will actually check out a product or service online. Giving recommendations and offering products on various sites that are similar to products you have searched is a great way to not only ensure that a product will be purchased, but it will give the consumer choices to then decide. This will, in turn, make them spend more time on the website and potentially add more purchases to their order. It is also a great way to not only have business in the present but will also garner more business in the future.

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  3. Michelle McNall December 7, 2015 / 9:36 pm

    I want to commend Bharat on a job well done here with this insightful post and his presentation. Dynamic retargeting is definitely a unique topic and something that has become increasingly popular over the past couple of years with the surge in online shopping, online travel bookings etc. Before this class, I used to find it odd how I would be looking at something on Macy’s website or Amazon and then that same item I was looking at would appear as I browsed the web often times browsing for things completely unrelated. I never knew what the deal was behind this until now and what’s more, I never realized how constant dynamic retargeting was until I was made aware of this tactic. I feel like now that I am aware of this, I see it all the time! I understand why marketers would use this but I think that their goal will back fire on them as many people, like myself, will find this annoying if it is done constantly.

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  4. Bharat Mahajan December 7, 2015 / 10:16 pm

    Thank you Maheshwari & Matthew. The Dynamic targeting has no doubt a big advantage in marketing. It not only allows you to target a specific customer with a very specific product but it is also a big money saver. However the process of retargeting is to load cookies into customer’s computer without him/her knowing it and keeping track of their browsing history. The big question is Can we call it Ethical?

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  5. latikakarnani April 17, 2016 / 10:37 pm

    Dynamic re-targeting is very powerful now. From sites that take information from your online shopping views to getting emails and SMS wrt your shopping trend, businesses want to focus on the most potential candidate and market to only those.
    I think it definitely works. When I want to buy a pair of shoe, and i browse, but end up not buying and whenever i open my facebook page in near future and I see multiple shoes options, I am constantly reminded that I have to buy a shoe. And I do end up buying them

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