Which approach to improving ROI of online ads works best?

Breakfast with Robin Joy, Director of Marketing for Quicken, is always a thought provoking occasion. Recently we were discussing our experiences in optimizing the return from online ads. One approach that I have advocated frequently is to place ads in contextually relevant environments with appropriate creative to break through the banner burn-out phenomenon. This can help improve click-though or rollover rates and thus improve the “return.” The other end of the spectrum is to use networks that aggregate remnant space and to buy ads  cheaply. This lowers the “investment” but somewhat limits control of targeting. It can be an appropriate approach for broad-appeal products such as free credit reports.

Robin shared her experience with a technique we have also used for clients called retargeting. It has been one of the best performing strategies for Quicken, as well as for some of our clients. This approach combines the best of both previous alternatives. By tagging visitors to your website who did not conclude the ultimate action (order online, register their interest, download your software…) you have identified a relevant target. Then by serving display ads through a low-cost aggregator to them wherever they happen to be on the Internet, you can reach them at a low cost per impression. This combination of a good target viewer and a low-cost impression yields a great ROI.

Retargeting programs take some sophistication to set up and run, but they can be profitable. Have you tried this as part of your marketing programs? What was your experience?