Personalized retargeting is a display advertising technique used by online advertisers to recapture consumers who visit a retailer’s site and leave without making a purchase. It functions as a complement to search, SEO and other marketing campaign tactics.

Personalized retargeting, like other forms of retargeting, uses basic information, pulled from cookies that are placed on a user’s web browser, to serve display advertisements. The products that appear in each user’s display ad are unique to each user and reflect products that the user previously viewed on a retailer’s website.

History

The mechanics of basic retargeting go back about 10 years, with personalized retargeting emerging recently as a more sophisticated technique to present consumers with targeted, relevant ads based on their previous onsite browsing history. Personalized retargeted ads differ from earlier forms of retargeting in that instead of static, branded creative ads, personalized ads are produced in real-time, reflect the browsing history of each individual user and can feature multiple ads in a single banner.

Pricing models

Personalized retargeting providers employ a variety of pricing models to charge advertisers for the ads viewed by consumers. Three prominent models include:

• CPM (cost per thousand)
• PPC (pay per click)
• CPA (cost per action)

Cost per impression

Cost Per Impression

Cost per impression, often abbreviated to CPI or CPM for Cost per thousand impressions, is a phrase often used in online advertising and marketing related to web traffic. It is used for measuring the worth and cost of a specific e-marketing campaign. This technique is applied with web banners,...

 (CPM) is a common metric used in the online advertising industry to charge advertisers for inventory based on a set price per thousand page impressions. An impression is defined as any time a banner ad loads on an individual’s web browser.

Pay per click

Pay per click

Pay per click is an Internet advertising model used to direct traffic to websites, where advertisers pay the publisher when the ad is clicked. With search engines, advertisers typically bid on keyword phrases relevant to their target market...

 (PPC) charges advertisers for every verifiable click that leads consumers back to a retailer’s website. Unlike the CPM model, which charges advertisers a flat rate, advertisers working under the PPC model are only charged when a person clicks on an ad.

Cost per action

Cost Per Action

Cost Per Action or CPA is an online advertising pricing model, where the advertiser pays for each specified action linked to the advertisement....

 (CPA) is a pricing model in which advertisers are charged based on pre-arranged action (a purchase, a view through, etc), although a completed sale is the most common action used under the CPA model.

Concerns

In the United States, several organizations, including the Federal Trade Commission, Congress and the media, have expressed privacy concerns around the practice of retargeting; however, responsible personalized retargeting providers don’t collect personally identifiable information

Personally identifiable information

Personally Identifiable Information , as used in information security, is information that can be used to uniquely identify, contact, or locate a single person or can be used with other sources to uniquely identify a single individual...

 (PII) on consumers. Providers are blind to a user’s age, sex and other personal information. Instead, providers rely upon data gathered from cookies that are placed on a consumer’s browser by the websites they visit. This information is not shared among publishers, other advertisers or third parties and cannot be linked to a specific user. The United States hasn’t legislated many laws around the practice, and instead relies upon the industry and its overarching organizations, such as the Interactive Advertising Bureau

Interactive Advertising Bureau

The Interactive Advertising Bureau is an advertising business organization that develops industry standards, conducts research, and provides legal support for the online advertising industry. The organization represents a large number of the most prominent media outlets in the United...

, Network Advertising Initiative

Network Advertising Initiative

The Network Advertising Initiative is an industry trade group formed in 1999 that develops self-regulatory standards for online advertising. Advertising networks created the organization in response to concerns from the Federal Trade Commission and consumer groups that online advertising —...

 and TRUSTe

TRUSTe

TRUSTe is a company based in San Francisco, California, best known for its online privacy seals. TRUSTe operates the world’s largest privacy seal program, certifying more than 3,500 websites, including leading online portals and brands like Yahoo, Facebook, Microsoft, Apple Inc., IBM, Oracle...

to self-regulate. In October 2010, the IAB announced its Advertising Option Icon, which partner sites will place near banner advertisements that collect non-PII user data.