Remember the scene in “Minority Report” where Tom Cruise is in a mall, all the while personalized advertisements are literally calling out to him as he walks by?

Is this our digital future? How exactly does behavioral retargeting work, and does it deserve to be controversial? Search Engine Journal sat down with Adam Berke, cofounder of ad retargeting platform AdRoll, to shed some light on the business.

How ad retargeting works

“Retargeting helps companies advertise to website visitors who leave without a conversion — about 98% of all web traffic. This is done by displaying ads to the prospect as they surf the internet via various ad networks that the agency buys media from on behalf of their Business Customers. Retargeting is only serving banner ads to people who have shown at least some amount of engagement in your brand. This makes retargeting a smarter spend than most other display ad campaigns as it focuses on your brand’s engaged userbase.” Source: Wikipedia

AdRoll was founded in 2007 with one goal: to make display advertising effective, which at the time was “the red-headed stepchild to search marketing”. At the time, e-commerce and SMBs were not investing in display, as it didn’t yet have the ROI of search-based advertising.

By focusing on refining the behavioral advertising experience as well as creating a self-service platform for advertisers, AdRoll is now a San Francisco-based team of 45, growing by 10 advertisers a day, with venture funding from top-shelf VCs such as Accel and high-profile angel investor Peter Thiel.

AdRoll claims that by being able to reach 85-90% of a retargeting list, they are able to generate a true +5% incremental increase in sales with a well-optimized retargeting campaign. “The dirty little secret of retargeting is that many of the conversions that providers take credit for would’ve converted anyway. Sophisticated advertisers should work with providers who understand how to generate incremental conversions, not just deliver the lowest CPA or CPC possible.”

Apparently retargeting is effective, with the right strategy. So how do advertisers get it wrong?

#1 Mistake of retargeting

According to Adam, the most common mistake is also the most obvious: not taking the user into consideration. “What’s surprising is how often people ignore well-established, best practices. I think marketing managers feel compelled to jam in a bunch of rich media animation and social media sharing features into creative, but what generally works best is simple, striking creative, that has a clear message and obvious call to action. People aren’t waiting around for your ad to load and animate to figure out what they should do.”