May 3, 2011, 12:44 PM

The right ads in the right places yield retargeting ROI for Charlotte Russe

Online display ads are generating more revenue with higher returns than paid search.

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Online display ads are delivering higher returns on marketing spend than e-mail and paid search campaigns for retail chain and web merchant Charlotte Russe Holding Inc., says Paul Hollowell, interactive marketing manager. In fact, retargeting shoppers who have visited with display ads elsewhere on the web is producing more revenue than paid search for the apparel retailer, he says.

He credits online ad agency MediaForge for much of the success, saying the online ad agency is placing ads on web sites that the retailer’s most profitable customers visit, and is able to retarget customers with dynamic ads directly relevant to what the shoppers saw when they visited

“If you’ve been shopping a summer dress with short sleeves you would see similar items based on your shopping behavior when you abandon our site and go to a site of one of MediaForge’s advertising partners,” Hollowell says.

He says Charlotte Russe has worked with other companies that retarget customers with display ads, including some that could present rich media ads with video or animation, as MediaForge can, and others that created only static ads.

A big difference, he says, is where Media Forge is putting the banner ads for Charlotte Russe, which is No. 366 in the Internet Retailer Top 500 Guide.

“The key is finding those sites that are going to be most effective at driving subsequent conversion at a high value,” Hollowell says. “It’s not just looking at the sites our customers visit, but are these sites displaying ads above the fold where the customer sees it, or placing at the bottom of the page where you get charged for an impression but the customer never gets down that far? MediaForge has done a tremendous job of identifying those media partners that are able to drive subsequent conversions for us most effectively at the best price.”

Charlotte Russe is charged by the impression, Hollowell says, which makes prominent ad placement more important than if it were charged by click or sale.

Customers who see the ads return to more frequently than other site visitors who do not see the ads, Hollowell says. They also purchase at a slightly higher rate and spend more, he says. He would not provide details.

In most cases, Hollowell says, the consumers who come back don’t do so immediately by clicking on the display ad that MediaForge presents them on another site. That means the retailer has to come up with another way to track the impact of the retargeting ads.

To do that, the e-retailer places cookies on the browsers of most web site visitors and then compares the sales of previous visitors who saw display ads placed by MediaForge—who are identified on other sites by the cookies—versus returning shoppers who did not see the ads. Charlotte Russe calculates an average conversion rate and order value for returning visitors who do not see retargeting ads and subtracts that average purchase from the actual sales of consumers who do see those ads in order to determine the campaign’s impact. For instance, if the average returning shopper not exposed to the display ads converts 5% of the time at an average order value of $50, the expected order value of $2.50 for a returning customer would be subtracted from each order placed by a returning consumer who had seen the retargeting ads.

“In that manner we only show results for what’s truly incremental, instead of taking credit for customers that would have come back anyway and repurchased,” Hollowell says. Being able to compare the results of consumers who saw the ads to a control group of returning shoppers who did not see the retargeting ads “has proven out the results for our executive team,” Hollowell adds.

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