We believe in transparency.  We believe in ROI.  And with the numbers below, we think more people will become believers in retargeting.

The key takeaways from this report are the following:

    • Retargeting costs 20% less than site-targeted campaigns on a CPM basis
    • Retargeting performs about 2x better on a CTR basis
    • Niche blogs with small audiences perform better than any other sites

Read on for the full details and analysis.

The data in this report is based on aggregate data from hundreds of display advertising campaigns, including both site-targeted, or “Demand Generation”, campaigns and retargeting campaigns (serving ads just to people that have been to the advertiser’s site before.)  Learn more about retargeting.

Many people instinctively know that the performance of retargeting campaigns is much better than traditional display advertising campaigns.  The data below proves this and demonstrates an apples-to-apples comparison of general site-targeted campaigns vs retargeting campaigns.  Many advertisers run both of these campaigns to stimulate more demand and increase conversions.

What we’ve found is that there’s no doubt anymore that retargeting works well and with proper optimization can be very ROI positive.  We will continue to share data like this each quarter to show the aggregate trends in advertising campaigns.

On this first chart, we show that the average CPM (cost per thousand impressions) is actually lower for retargeting campaigns.  This is contrary to some other beliefs that since you are targeting a relatively small user-base, the CPM bids are forced higher.  The reality is that when running traditional site-targeted campaigns, most advertisers opt for relatively premium websites like Forbes or CNN.  The premium sites have high CPMs relative to the overall averages online.  When retargeting though, it’s more important to target the specific users rather than guessing by picking a site list (*see bottom section on Site Optimization), so it is possible to reach the user wherever they browse online which will include many high-quality, but lower traffic websites.  These bring down the average CPM for retargeting campaigns.

CPM by Type Q1 10

So, now we know that retargeting is a bit lower cost than a demand generation campaign. Now let’s look at the CTR (click-through rate). Since retargeting is focused just on previous website visitors, the level of intent of the average user will be much higher than a general campaign. This level of intent is reflected in the average click-through rates, retargeting campaigns average about 2x the CTR of site-targeted campaigns.

CTR by Type Q1  10

Well, now that we know CPM and CTR, it’s a simple formula to get to average CPC (cost per click). Of course, the retargeting CPC for advertisers will depend heavily on what type of business it is and who they’re advertising to, but overall, the average in Q1 2010 is about $0.95.

CPC by Type Q1  10

Just in case you were wondering and missed our recent blog post, the best performing ad size is 300×250. See for yourself.

CTR by Ad Size Q1  10

Earlier in this post, I stated that for retargeting campaigns the specific user list is more important than the site list. Well, that may be true, but there is a lot of difference in performance by publisher sites. Each publisher operates a little differently, some showing only a couple ad spaces per page, others blanketing their site with as many ads will fit. We wanted to highlight a few of the top performing small publisher websites by CTR for Q1 of 2010, (with at least 10k impressions).  Note: very large publishers were excluded from this list.   When you’re optimizing your campaigns, look for your top performers and cut your bottom performers. (At AdRoll, we always provide as much website-level transparency as possible). I personally found it very interesting that blogspot.com was number 1 in the results. This says to me that ads on very small personal blogs actually perform better than any premium publisher sites. The readers on those blogs are probably a very engaged audience, think friends and family, and may almost view the banner ad as somewhat of an endorsement by the author.

CTR by Sites
Site URL Impressions CTR
Blogspot blogspot.com 31,514 1.66%
KOMO News – Seattle, Washington komonews.com 12,328 1.35%
Dog Breed Information Center dogbreedinfo.com 11,042 1.21%
Mail2web mail2web.com 14,368 0.93%
Mylifeisaverage mylifeisaverage.com 78,860 0.75%
CastTV Video Search casttv.com 18,448 0.72%
National Review Online nationalreview.com 32,193 0.67%
Metrolyrics metrolyrics.com 27,239 0.65%
http://associatedcontent.com associatedcontent.com 59,148 0.64%
Cricinfo cricket.org 26,347 0.62%
Weather Underground wunderground.com 129,737 0.59%
Healthgrades.com healthgrades.com 25,535 0.56%
Sparkpeople sparkpeople.com 36,009 0.54%
Songmeanings songmeanings.net 26,670 0.53%
Questionable Content questionablecontent.net 56,652 0.52%
Brainyquote brainyquote.com 41,452 0.51%
HighBeam Encyclopedia encyclopedia.com 34,377 0.50%
ThinkExist.com Quotations thinkexist.com 35,252 0.50%
Intellicast intellicast.com 79,657 0.49%
MindJolt Games mindjolt.com 29,485 0.49%