Retargeting Ads for Shopping Cart Recovery: Evidence from Online Field Experiments

42 Pages Posted: 5 Oct 2016

See all articles by Takeshi Moriguchi

Takeshi Moriguchi

Waseda University - Graduate School of Commerce

Guiyang Xiong

University of Georgia

Xueming Luo

Temple University

Date Written: October 4, 2016

Abstract

Online marketers have widely adopted retargeting ads to convert customers who had previously browsed the websites or abandoned shopping carts. Yet, the effectiveness of such retargeting remains unclear. This study exploits several randomized field experiments to test how the effects of retargeting ads vary depending on the ad copy content and purchase funnel stages. The experimental results suggest that compared to the hold out without retargeting, the retargeting ads in lower funnel based on shopping cart abandonment history can engender significant incremental purchase responses. The effects are driven by the ad copy that highlights product return information rather than product reminder or shipping content. Due to the lack of touch, feel, and product trial of online orders, the ad copy with product returns can nudge customers to try the products with reduced online shopping risks and, thus, increase the purchase conversation rates. The net revenue for retargeting ads with product return information is about 49.7% larger than the conventional retargeting ads with production information. Also, a causal comparison with similar and randomly assigned customers suggests that the lower funnel retargeting is about 2.25 times as effective as the upper funnel retargeting in lifting purchase rates. These findings implicate that retargeting ads with customer services of product return information can effectively recover the shopping carts and boost sales revenues.

Keywords: Targeting, Retargeting, E-commerce, Online ads, Purchase funnel, Shopping cart recovery

Suggested Citation

Moriguchi, Takeshi and Xiong, Guiyang and Luo, Xueming, Retargeting Ads for Shopping Cart Recovery: Evidence from Online Field Experiments (October 4, 2016). Available at SSRN: https://ssrn.com/abstract=2847631 or http://dx.doi.org/10.2139/ssrn.2847631

Takeshi Moriguchi

Waseda University - Graduate School of Commerce ( email )

1-6-1, Nishi-Waseda
Shinjuku-ku, Tokyo 169-8050
Japan

Guiyang Xiong

University of Georgia ( email )

Department of Marketing and Distribution
148 Brooks Hall, Terry College of Business
Athens, GA Athens 30602-6254
United States

Xueming Luo (Contact Author)

Temple University ( email )

1810 N. 13th Street
Floor 2
Philadelphia, PA 19128
United States

HOME PAGE: http://www.fox.temple.edu/mcm_people/xueming-luo/

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