Apple Connect PortMarch 22, 2013: I had the pleasure of interviewing Adam Berke, whose company, AdRoll, has been a pioneer in retargeting. Adam will be speaking at SES NY next week at a Spotlight Session called Follow, Reach, Convert: Smart Retargeting/ Remarketing. I wanted to catch up with him before the show to get his views on retargeting — both traditionally and through  the Facebook Ad Exchange (FBX) – current issues in online privacy regulation, and lessons for entrepreneurs working in a tough business environment.

Mark Simon: AdRoll has been enormously successful in the past several years, and I find it interesting that you’ve been able to grow your business in a recessionary time that has been very challenging for many businesses. What have been your biggest challenges in the past four years and how were you able to meet them?

Adam Berke: Yes, in retrospect, the recession actually helped focus us and was the ideal time to build the company.  First off, instead of rushing to market with a half-baked product, we were encouraged to hunker down and focus on building a killer product.  We actually didn’t spend anything on sales and marketing until we were sure we had something that customers would love.The poor economy also forced us to take a ruthless approach to performance. During our early days, there was no “dumb money” floating around.  Advertisers would only continue working with us if we delivered immediate and clear ROI that didn’t require a whole bunch of hand-waving about attribution.Of course, display was not historically known as a performance channel, so we had quite a few challenges to figure out.  Recession notwithstanding, we were lucky to start the company right at the time RTB and exchanges were taking off.  Through a series of experiments, we realized that retargeting was the killer app of performance display; however, it wasn’t a well known marketing channel, and wasn’t accessible to anyone but the largest brands and agencies.  So the challenge became building a platform that could democratize this powerful technique, and also add new functionality for brands that already knew about it.

Mark Simon: Let’s talk about Do-Not-Track for a moment. Senator Jay Rockefeller re-introduced the Do-Not-Track bill this month, and while many do not expect the bill to succeed, it reflects a continuing awareness of the tracking issue in Washington that is obviously important for your firm and many others using tracking to accomplish retargeting/remarketing. It seems to me that your firm has taken proper steps to give customers control over how the degree to which they are tracked online: my question is whether you think the online ad industry could do a better job of making the case for tracking. Could the industry do more, and, if so, what should be done?

Adam Berke: As Aaron (AdRoll’s CEO) recently mentioned on AdExchanger and as I’ve said before, display ads are crucial for the online ecosystem – they keep content free and easily accessible. Cookies are the standard for allowing that to happen.Here at AdRoll, we’re leading the industry in privacy, tracking and transparency. We’re members of the DAA and NAI and serve Evidon’s Ad Choices icon with every ad that we serve. Last December, we looked at our opt-out statistics and found that only 1 in every 410,993 impressions resulted in an opt-out of our advertising services. That means 96% of people chose not to opt out of personalized retargeting once they understood what data we collect and how ad targeting works.The problem with unilateral action (whether it be by Firefox or IE 10) is that it undermines the Do-Not-Track standard.  That’s the underlying requirement for a standard.  Everyone needs to follow it in the same way, or else it loses its meaning.There’s a bit of a misconception that a company like ours would be anti-privacy controls, but it’s actually quite the contrary.  We want users to have transparency into what data is collected (so they feel comfortable with what’s happening with their data) and control (so they can adjust their experience based on their preferences.)  Of course we want people to opt out of campaigns if they’re not interested in the product, that’s just common sense marketing.  We believe Do-Not-Track is the best chance at providing users with transparency and control, but it won’t work if individual players take matters into their own hands and don’t work with the rest of the industry to enforce the standard.

Mark Simon: AdRoll recently published a very interesting study on the effectiveness of FBX retargeting vs. Web retargeting, with FBX winning in the area of CPM and CPC but losing in terms of CTR and CPA. How should advertisers interpret these results and change media spend allocations accordingly?

Adam Berke: Our research shows that it’s important to leverage both standard web retargeting and Facebook Exchange (FBX)retargeting. Of the 468 advertisers analyzed, we found that only 8.3% of an advertiser’s total audience was retargeted to by both their campaigns – making FBX an extremely incremental marketing channel. Additionally, FBX campaigns saw dramatic decreases in CPM and CPC when compared to standard web campaigns. It’s provided huge ROI for our clients, and it’s a no-brainer for any advertiser to test with their current retargeting efforts.It’s truly remarkable that in the seven months since inception, Facebook Exchange is making such waves in the online advertising space. By December, we were serving more impressions on FBX than on non-FB inventory (63% versus 37%). Through refinement and further technological advances, it’s almost a given that FBX will become a performance advertising behemoth that all marketers will want and need!

Mark Simon: The tremendous growth of mobile traffic will inevitably cause shifts in the way advertisers spend across channels. So far, AdRoll has been most active in respect to retargeting ads in a desktop environment. How does mobile change the game for you and for retargeting/remarketing generally?

Adam Berke: In terms of mobile, the technology and ecosystem to support retargeting is still nascent and developing. However, we’re already expanding in this area, and have an exciting mobile roadmap.  Obviously, as people consume content and shop more on different devices, it’s crucial for marketers to be able to execute in these environments.  We’re excited to announce a few features that are coming soon in this area.

Mark Simon: You will soon be speaking at SES in New York. What is the takeaway you’d like your audience to come away with?

Adam Berke: Marketing has evolved to become extremely data and metrics driven. With the amount of first party data created by customers visiting a website, marketers are now given the opportunity to create targeted messages that actually resonate with their customers. They can test and gain real insight into which creatives are performing well and how to best tweak them. Unlike before, marketers can now couple lead gen campaigns to help drive traffic to their website with lower funnel campaigns such as retargeting to re-engage and raise conversions. The biggest takeaway is that every online business has a treasure trove of data sitting on their site, and there are simple ways they can leverage it to achieve their marketing goals.  Retargeting isn’t one size fits all, and there are variety of techniques that you can implement depending on the nature of your business.

Note: SES NY is happening next week – March 25-28, in New York City, at the Marriot Marquis. You can learn more about it here:

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