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Online Retargeting Based on Consumer Behavior: a Comparison Between Models

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Online Retargeting Based on Consumer Behavior: a Comparison Between Models Online retargeting based on consumer behavior: a comparison between models Master thesis Menno Nelis Student no: 5929040 Supervisor: Prof. Dr. Dick Heinhuis University of Amsterdam Amsterdam, The Netherlands Faculty of Science Information Studies Track: Business Information Systems August 2017 Abstract Behavioral retargeting is a widely used technique within the field of online marketing to generate sales out of customers that already visited your website. These campaigns are based on the online behavior and interests of the customer. Although there is a huge growing market for behavioral retargeting, current online campaigns do not yet use models of consumer behavior or decision making as input for their campaign design. Behavioral retargeting is seen as a trick by marketers and their campaigns are optimized empirically. This research selected three models of consumer behavior or decision making; the Howard-Sheth model, the EBM model and the Bettman model. The phases of these models were translated from offline to online behavior and used to create three different retargeting campaigns. The fourth campaign is the control group, which is not based on a model. A Dutch travel company, Corendon, provided a platform to run the different experiments. Their visiting customers on the website were used in the experiment to sub divide customers among the different experimental campaigns, based on the selected models. The results obtained from these experiments were measured in six online metrics: the bounce rate, click through rate, conversion rate, cost per action, cost per click and the return on investment. After the campaigns ran for a week, results showed that the campaigns based on a consumer behavior or decision making model all scored better than the control group. Comparing the experiments on the different metrics, it can be concluded that a retargeting campaign based on the Bettman model scores highest on five of the six metrics. Therefore the Bettman model is identified as the most suitable model for the design of an online retargeting campaign, out of the three models used during this study. This research shows that marketers should not neglect models of consumer behavior or decision making, but should embrace and implement them to improve their behavioral retargeting campaigns. Keywords Behavioral retargeting, consumer behavior, buyer intention, decision making process, online banners 2 Acknowledgments A lot of time and effort has been put into this thesis. I would like to thank all people who have been supporting me during this research. First of all I would like to thank my supervisor Prof. Dr. Dick Heinhuis for his support, patience and shared knowledge. Second I would like to thank Corendon for sharing information and the freedom of running my experiments with their data and assets. Special thanks to Stefan van den Berg with his help to set up the experiments. Last but not least I’d like to thank my friends and family for their support, special thanks to Lianne Wensveen, Baukje Faber, Saskia Epping and Michelle van der Klauw for their support. 3 Contents Abstract ................................................................................................................................................... 2 Acknowledgments ................................................................................................................................... 3 Contents ................................................................................................................................................... 4 List of Figures ......................................................................................................................................... 7 List of Tables ........................................................................................................................................... 8 1. Introduction ......................................................................................................................................... 9 1.1 What is behavioral retargeting? ................................................................................................... 11 1.2 How does behavioral retargeting work? ...................................................................................... 11 2. Literature review ............................................................................................................................... 13 2.1 Which theories of consumer behavior or decision making are applicable for behavioral retargeting? ........................................................................................................................................ 13 2.1.1 Selection criteria of theories ................................................................................................. 13 2.1.2 Theories of consumer behavior and decision making .......................................................... 14 2.2 Which recent studies are conducted on behavioral retargeting? ................................................. 16 2.3 Which models will be selected for this research?........................................................................ 18 3. Experiment ........................................................................................................................................ 21 3.1 Hypotheses .................................................................................................................................. 21 3.2 Method ........................................................................................................................................ 24 3.3 Experiment scope ........................................................................................................................ 25 3.4 Data collection ............................................................................................................................. 26 3.5 Advertisements ............................................................................................................................ 27 3.6 Models translated into online behavior ....................................................................................... 28 3.6.1 Howard-Sheth model ............................................................................................................ 28 3.6.2 EBM model .......................................................................................................................... 31 3.6.3 Bettman model ..................................................................................................................... 35 3.6.4 Traditional behavioral retargeting campaign ........................................................................ 39 3.7 Summary of selections ................................................................................................................ 39 4. Results ............................................................................................................................................... 41 4 4.1 Overall results .............................................................................................................................. 41 4.2 Metric 1: Bounce rate .................................................................................................................. 42 4.3 Metric 2: Click Through Rate...................................................................................................... 43 4.4 Metric 3: Conversion Rate .......................................................................................................... 43 4.5 Metric 4: Cost per Action ............................................................................................................ 44 4.6 Metric 5: Cost per Click .............................................................................................................. 45 4.7 Metric 6: Return on Investment ................................................................................................... 45 5. Discussion and conclusion ................................................................................................................ 46 5.1 Discussion ................................................................................................................................... 46 5.2 Conclusion ................................................................................................................................... 48 5.2.1 Limitations............................................................................................................................ 50 5.2.2 Future work .......................................................................................................................... 50 References ............................................................................................................................................. 52 Appendices ............................................................................................................................................ 55 Appendix 1: calculations Bounce Rates ............................................................................................ 55 Appendix 1.1: Bounce Rate Experiment 1 vs control group ......................................................... 55 Appendix 1.2: Bounce Rate Experiment 2 vs control group ......................................................... 56 Appendix 1.3: Bounce Rate Experiment 3 vs control group ........................................................
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