The effectiveness of ad retargeting in social networking sites

Abstract

Retargeting is a widely used targeting technique that aims to bring back consumers who did not conclude their online purchases, by showing them relevant ads based on their past browsing behavior. Although the broad reach of Social Networking sites (SNS) makes them an ideal platform for retargeting consumers, little is known about the performance of social media retargeting campaigns. The present dissertation investigates the effectiveness of social media retargeted ads in making consumers progress through the purchasing process. Moreover, the present study aims to assess how two ad features – namely the degree of ad personalization and the offer of a discount – influence the effectiveness of social media retargeted ads, focusing on behavioral retargeting in Facebook, currently the world’s largest SNS. To this end, a descripto-explanatory approach was undertaken, analyzing both secondary data from three Facebook promotional campaigns and primary data collected through two experimental retargeting campaigns. Results of the study show that Facebook retargeted ads are effective in making consumers progress through the purchasing process, and that highly personalized ads result in lower click-through-rate but higher conversion rate compared to medium personalized ads. Moreover, the offer of a discount increases the effectiveness of Facebook ads for first time visitors, but not for returning ones. From a managerial perspective, this implies that companies should offer discounts only to attract new visitors and invest in Facebook retargeting campaigns, favoring highly personalized ads with no price-promotion.

Date of Award	21 Jul 2017
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Ana Isabel de Almeida Costa (Supervisor)