Find Ease with Remarketing: The Future of Ad Targeting

0:07Hello and welcome to another episode of the duct tape marketing podcast. This is John Jantz. My guest today is Larry Kim. He is the founder and CEO of Customers.ai, a first-party website visitor, identification, and remarketing pixel. He's also the founder of WordStream, provider of Google and Facebook ad management software for tens of thousands of customers globally, acquired by Gannett in 2018 for approximately$200 million. So, Larry, welcome to the show. I wonder what in the world you're doing hanging around with the Lowly Duct Tape Marketing Podcast at this point. Thanks, John. It's great to be here.

0:49So, it's just awesome. So, I think I had you on back in the day to talk about WordStream. Are you involved in any way, shape, or form with WordStream or that's completely out of it? It was acquired by companies and so other things. Yeah. So did you take a, I'm curious, did you take some time and say, I'm just going to, I've picked up a little money here. I've got some ability to enjoy myself. Or did you just immediately start thinking of what's next? It's still a long career ahead and digital marketing is a fascinating field. So I just jump right into the next thing. So we'll talk about customers.ai, but is there anything in particular that you looked out and said, this is the next thing to tackle?

1:32or do you feel like you just stumbled into an opportunity? No, when you sell a business, they ask you to not recreate the same business for obvious reasons, and that's perfectly reasonable. So I was just looking for opportunities in digital marketing, but outside of the Google you use. Yeah. I mentioned in the intro what Customer AI is, website, visitor identification, remarketing pixel. A lot of people, a lot of listeners know what remarketing is, but maybe we ought to start there. In the ad world, what exactly is remarketing? An incredibly effective way of doing ad targeting to people who have recently visited your website.

2:13And the reason why this works so smashingly well is just that people are two to three times more likely to engage with ads for brands that they've heard of. And targeting, it kind of figures out, it solves for that by narrowing the ad targeting of the people who have recently been to your website, which means that they're in market for the products and services that you're selling, as well as they've heard of you. It's a crown jewel of, or has had been historically the crown jewel of ad targeting methods and was responsible for a lot of the growth of digital ads that were driving company growth.

2:51So back particularly in your WordStream days, and maybe you don't have an exact number, but how likely or how much better was retargeting? If you could retarget somebody, how much more effective was that in terms of a conversion, in terms of return on ad spend, things of that nature? It's an order of magnitude better. The engagement rate was two to three times higher. That implied substantially lower cost per click. But also that excitement, that higher engagement would carry through to purchases or apps because they're excited to engage. And what we found was in advertising business, there's a concept of ad fatigue where it's like the engagement rate, even a fatigue plus 20 impression remarketing targeted ad will still perform better than a brand new interest or demographic based targeted ad.

3:46The ones I hate is when I see it 20 or 30 times after I've made the purchase and I'm still seeing the ads. Those are the ones I hate. This opportunity, they should be segmenting you into an upsell ad flow. Of course, yeah. All right. I get the concept. I've visited the website. And so now you're going to show me target or you're going to show me ads because you know a lot about me. or at least one thing about me, I visit your website. What's changed in the world of pixels and targeting and privacy? And again, maybe that's a big question with a lot of answers, but when it comes to remarketing, what's changed?

4:23It's nearly dead that this entire phenomenon was 100 % reliant on third-party cookies. So the way that retargeting would work for Facebook or Google was that you would log into Facebook or Gmail or some Google service on either your browser or on your device. And using the power of third-party cookies, they could share data between one browser tab to another. And someone visited DuckTap Marketing or Customers.ai. It used to be the case that if you install a Facebook or Google AdPixel on your website, You could attempt to look for the Google pixel, look for a Google third party cookie. The Facebook pixel could do the same and it would then pick up an ID.

5:10If it was there and 50 % of times this would work, I would then phone home that ID to the mothership and saying, John visited customers on AI. So let's add John's ID into Larry's ad manager so that he can retarget to them. So this whole thing is like very tenuous right now. It started in 18, a Firefox drop third-party cookies and then 2019 iOS third-party cookies opt-in rather than opt-out. And Chrome is like the last shoe to drop here. I don't know if you saw the news history, they kind of extended the time to sometime six months from now or something a year early 2025 is what they're saying now but but it is in the process of being sunsetted and we're already that retargeting signal just because of all the other players in the ecosystem excluding chrome is still like 50 60 percent of the signal it's been in decline for you know five years now so how what's the level of degradation now of that type of tactic?

6:16So at the heyday, so when you were able to market using a pixel, it would vary based on where you lived and who your audience was. But on average, they could ID somewhere around 50 % of the people who were visiting your website and graded by, call it 70, 80 % over the last five years. So what's driving these changes? Is it just consumer privacy theoretically or is it just a legislative backlash? The thing that people don't realize about the Facebook and Google AdPixel was it was just a massive Trojan horse. The use case was limited to what we've described here, like just being able to ID the people who visited your website and show them ads.

7:05Like it might have not been such a big deal, but the other thing that Google and Facebook pixels were doing was they were phoning home like every bit of user journey data, like for every visitor, but then uploading that to their ad systems to then power the display network capabilities of those ad platforms. So it was like they had this pixel on 10 million sites and you would visit a phishing site. Okay. And then Google would ascertain that John's must be going to do a phishing trip. And then other competitors in the ecosystem, there's 10 million advertisers would then be able to run ads using display targeting segments like interested in phishing or something.

7:47And that's exactly the mechanism of how that data was being populated. And I think that is very questionable and it wasn't really well disclosed. And so it did run afoul of a lot of regular jewelry practices. But Google and Facebook weren't necessarily even disclosing that to the people who are in some of the pixels. There was some concern, but that is the genesis of the demise of third-party cookies. So some of these bigger players, the Googles, the Facebook, even Apple, now jumping on killing third-party data, does that put a big dent in their ad revenue as well? Or does it actually increase ad revenue because targeting goes away?

8:24So they're putting on a bold face. They're saying, you know what, we have this new, Facebook is calling it audience plus ad targeting. and they're saying you don't need data you need like our ai will figure out who your perfect customers are okay and it's mixed reviews like this is nothing new it's it's called similar it's uh rebranding of similar audience target exactly and look at what audience targeting was there in like 2010 like when i started and it was always the backup kind of stepchild of ad targeting methods where if you didn't have any signal, you would go to similar ad target, similar audience targeting.

9:03And they just reverse the pecking order. They're saying now the default is similar audience targeting. And if you happen to have data, then that's still an option, but it's not required. Now I don't, does it actually work? Sure. It can work a little bit, but apex of like what they had going back in 2017. This was pretty hard to eat. It's my pleasure to welcome a new sponsor to the podcast, our friends at ActiveCampaign. ActiveCampaign helps small teams power big businesses with a must-have platform for intelligent marketing automation. We've been using ActiveCampaign for years here at Duct Tape Marketing to power our subscription forms, email newsletters, and sales funnel drip campaigns.

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11:52Yeah, that's exactly the thing. It was like this weird phenomenon between, for about a decade, between 2010 and 2018-ish. You had Google and Facebook trying to kill each other by providing like the best possible data for their advertisers and the best possible tools. And I think advertisers were the beneficiary of this free, it wasn't free, but they were licensing the data to you through their ad products. But just even having that access was something that marketers ever had before and providing very granular analytics to understand the ROI of that ad spend is what's quite remarkable in terms of like where we're headed.

12:28These companies are now trillion dollar behemoths and they have monopolies and there's just not with the specter of regulatory concerns overhead. There's just no upside to sticking your neck out there and trying to provide like really great ad targeting in 24. So they're making things more opaque. In case in point, like little analytics, It used to have people explore data. You could understand more about the people and the demographics of the people who are visiting your website. They ripped it out. The audience managers in Facebook used to have audience insights. That's been ripped out. You start saying Google Analytics used to be able to get very granular music journey data.

13:10They replaced it with sampling where they don't tell you the exact numbers. They just round to the nearest thousand. So it's just, I think, does that answer your question? Yeah, absolutely. So really a lot of where I'm really going with this is a lot of what you're doing at Customers.ai is really trying to help people recover the ability or the capability to do remarketing. So if third-party data is not the answer, what is the answer? What's the technology now that's allowing some recovery of this? You need to lean into your first-party data. And we just got very complacent and lazy and forgot to, of the importance of engaging in marketing, driving traffic to your site through top of phone campaigns.

13:50And then what we do is we have something a little bit comparable to what the Facebook and Google Pixels used to do, but it's limited to a first party context. So what we can do is - So maybe, I hate to do this, but maybe explain what first party data is first. It's your competitive advantage. It's your understanding of the market, like in terms of the people who are visiting your website, the information that they fill out on your website, the pages that they view. It's the data in your CRMs, in your HubSpot, in your MailChimp. It's all that information. And third-party data, on the other hand, is like ZoomInfo, where you could just buy a list of CEOs.

14:32So that was this purchased data or ads where it's like you specify like an audience and they just happen to know who's looking to do a fishing trip this weekend. And that's their credit data. So what we're saying is the pendulum is swung in the other direction. We recover these remarketing use cases, but in the first party content, meaning we will provide you with a ton of information about the people who are visiting your own website. So this is augmenting your first party website data with all sorts of valuable information. I'm sure all of your visitors will be familiar with this idea of augmenting your visitor data with whatever.

15:16Geo-targeting is one of them, big ones, like city, state. And we can invent that to include identity as well as attributes of the people who are visiting. So email, phone number, mailing address, et cetera. And this is still your first party data. It's not, I'm not just giving you a list of ideal customers. You have to bring them into your funnel first. And then what we can do is we can, in a first party way, augment the data and unlock different use cases, such as email marketing, such as retargeting. So that's, in the case of retargeting, we can like securely encrypt those identifiers and send them back to whichever ad platforms that you care about in a way where it's just your data being sent to your account and it's not populating 10 million other ad accounts.

16:06So this is what we're talking about with compliance and privacy, compliance, any questions? So is there an easy way to explain the technology? It's some sort of server-to-server connection? Yes. Obviously, we can't be using third-party cookies because then we would have the same fate as the ad scripts that are being blocked. And obviously we can't be using like browser scripting calls because that's also what Google uses. It is a server to server call. So different recognizing that the, like the ad platforms recognize that the scripting communication channel was likely to be a little bit more tenuous.

16:45moving forward, they have all built sort of these server APIs where vendors like customers AI can now securely and reliably encrypt and send over that information so that you can still remarket like it's now 2018 again. So I always like to, especially somebody like you that's watching what's coming, any trends or technologies that you think are coming that are going to further impact this space? As marketers, I think the most successful marketers are the ones that can tell the future. And the easiest way to tell the future is to look at the past. And because we just go around and around. Before Google and Facebook were invented and were providing these really radically amazing targeting offerings, like ad targeting capabilities and analytics, the companies that were doing really well were old school, big companies that had a lot of data, like Walmart or or Harrah's entertainment or other big data companies.

17:46And they had a huge advantage over small retailers or vendors. And that advantage had been diminished over time because Google and Facebook were democratizing the availability of this party data. And I think where it's moving back is where we've been before. It's just like the companies that are going to be amazing are the ones that have a lot of data. So you should be like really taking stock of all the first party data that you're generating, making sure that it's fully augmented using first-party pixel technology so that you can maintain all that valuable information and then act on it in terms of powering, you know, email automation campaigns, advertising campaigns.

18:25We can do mailers, like we can send postcards if we have the address. It's a first-step try. Yeah, yeah. One more in the weeds question. Does customers.io am i getting that right ai sorry integrate with any crms or any or is it all uh you have to integrate through a zap or something like that uh so so we do have uh emailing capabilities and email automation capabilities within a platform however a lot of businesses that they have preferred crms or esps like email service providers that they wish to work with we have native integrations with a couple of the big ones including clavion lane mailcham and a couple of those, high level, high level.

19:06Okay. And dozens of others. Awesome. Well, if somebody wanted to find out a little more about whether or not this makes sense for them, how would they explore and get started with a tool like yours? There's a free trial on our website, customers.ai, and you just put the pixel on your website. I believe it includes 500 leads or seven free days of utilization, whichever comes first. So if you have a high-traffic website, I think that might be very interesting. You'll see all the attendees of the folks who are visiting your site, and you can tell your friends to, like, guys, come click on my website.

19:41I just want to see all these interesting names. Awesome. All right, Larry, again, I appreciate you stopping by. This is an interesting, evolving topic. People can find out more at Customers.ai, and hopefully one of these days we'll see you out there on the road.

19:59We'll be right back.