But losses mount for the home furnishings e-retailer that went public in October.
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"Because the ad unit is so small, you only have a finite amount of text so you have to capture the audience's attention quickly," she says. That may mean showing a woman who looked at five pages of dresses an image of a dress she looked at. Or, if a consumer regularly visits Karmaloop.com without making a purchase, it might show an interesting product, such as a bean bag that looks like a cheeseburger, to capture his attention, she says.
It isn't just Karmaloop finding that personalized ads work better than static ads. That finding was replicated in a study by retargeting vendor Kenshoo Ltd. that examined its clients' data in the first half of the year. The vendor found that personalized ads—ads that feature content based on what the consumer viewed on the retailer's site—had an average click-through rate 1.9 times higher than other ads, an average conversion rate 2.0 times higher and a return on investment 1.8 times higher ($8.10 compared with $4.50).
Personalized ads show the customer that you have an understanding of who she is, Knisely says.
Rivet & Sway's Lusk agrees. Because Rivet & Sway sells eyeglasses, a product that consumers might be reluctant to buy online, the retailer seeks to assuage shoppers' concerns with a home try-on offer. It sends three pairs of frames to a shopper's home for free so the consumer can see how the frames look on her face.
Figuring many shoppers who visit RivetandSway.com but don't buy are uncertain about buying glasses online, the retailer in June began focusing many of its FBX ads on promoting the home try-on offer. That helped increase the number of home try-on orders fivefold from June to August compared to the previous three-month period. "The home try-on is a qualified lead," Lusk says. "It gets shoppers into the conversion funnel."
That's evident as the retailer's revenue during the same period rose roughly 300%. FBX, Lusk says, is responsible for some of that growth. He declines to reveal revenue figures.
Retargeting ads only work if they can capture consumers' attention and draw them back to their site. Based on results from FBX's first year, plenty of shoppers are willing to listen to marketers' messages on Facebook.