Global cosmetics brand Nude by Nature has run a detailed A/B test to finally determine the real impact of retargeted advertising on its sales.
“Attribution modeling gives you an idea of retargeted display’s role in the path to purchase. But many of those sales may have occurred without the retargeting, plus most are viewed as click-throughs that convert via direct and brand, so it’s impossible to tell its real ROI,” said Gavin Merriman, Head of Digital at Nude by Nature.
“The only way to tell if retargeting really delivers an ROI is to run a proper A/B test to examine the uplift from the treated (retargeted) group against the control (no retargeting) group.”
Two divergent views have emerged in the growing debate about the effectiveness of retargeted and programmatic display. One view, from IAB, reports “69 per cent of marketers plan to increase their retargeting budget” with “93 per cent saying retargeting performs the same as or better than other display.”
Meanwhile, people like Matt Oczkowski, the chief data scientist behind the recent successful Republican presidential campaign who was in Australia for ADMA Data Day last month, hold the opposite view.
“Not to be crazy controversial, but I have a very negative opinion of the way programmatic media is going,” Oczkowski said during his keynote session. “I think it’s a dying industry. The idea that buying a 250 x 250 square display ad is effective, is false, you’re more likely to get bitten by a shark than click on one of those ad units.”
Rather than relying on these competing views, Nude by Nature decided to test the efficacy of retargeting itself. Its experiment provides much-needed guidance. Leveraging the powerful capabilities of its Tealium powered marketing stack the company was able to assess the effectiveness of the approach.
Merriman’s team used the Tealium Universal Data Hub to unify the data and power cross-channel personalisation. The first phase of the test used Tealium tag manager, IQ, to only fire remarketing tags to 75 per cent of the exposed audience, with the remaining 25 per cent as an untreated control group. Using the two distinct audiences triggers, Tealium action engine, Audience Stream, created two real-time audiences for website optimisation solution Optimizely. Optimizely then ran the A/B test to test for uplift in the exposed over the control group.
“Our test resulted in the exposed group achieving an 11.8 per cent uplift in online sales against the control group. This means the generated gross profit breaks even against campaign costs and the increased branding, customer acquisition, and offline halo are all upside,” said Merriman. “Interestingly, the uplift was 14.1 per cent but dropped to 7.7 per cent during a sale period, so for the next sale we’ll be including the sale messaging within the retargeted display creative alongside the dynamic products auto applying the sale coupon.”
“Interestingly, the uplift was 14.1 per cent but dropped to 7.7 per cent during a sale period, so for the next sale we’ll be including the sale messaging within the retargeted display creative alongside the dynamic products auto applying the sale coupon.”
According to Eyal Mekler, Managing Director ANZ at Tealium, “Tealium was purpose-built to solve real-world business issues in the digital world. We applaud Nude by Nature’s best-practice, evidence-based approach to gain real insights that will improve their digital business. This proves that retargeting and programmatic works for Nude by Nature. We look forward to other brands following Nude by Nature’s lead and undertaking similar AB tests to understand if retargeting and programmatic is effective for their digital business.”