The impact of cookie regime change on the effectiveness of automatic retargeting in advertising

Abstract

The constantly evolving legislation concerning the usage of cookies raises many concerns about the effectiveness of targeted online advertisements. Retargeting represents an advanced targeting strategy requiring detailed user data and thus may be potentially highly sensitive to cookie restrictions. The retargeting effectiveness is tested in terms of type (standard, dynamic), advertising platform (Meta Ads, Google Ads), and the ad performance development in time. The data were collected through a Czech home goods online retailer. This paper tests the effectiveness of 432 retargeting ads collected during the opt-out cookie regime by comparing them with 432 retargeting ads collected after the transition to the opt-in cookie regime. The study created 216 ads on Google and 216 ads on Facebook. The entire experiment took one month to be implemented in 2021 and repeated in precisely the same manner in 2022. After this period, data were processed with SPSS Statistics. Both Facebook and Google (Conversion Lift) provide A/B testing tools. The results suggest that standard retargeting ads are more effective in utilitarian browsing. In contrast, dynamic retargeting is more successful in reaching users in the hedonic environment of social networks. Moreover, the performance of retargeting ads evolves in the different stages along the customer journey. There are differences in the total number of tracked users in terms of the transition from the opt-out to the opt-in cookie regime. However, the performance of programmatic advertising appears moderately affected. AcknowledgmentThis work is supported by the Technology Agency of the Czech Republic under the Program of Applied Research ZETA through the Grant TJ02000206 – Developing the skills necessary for the digital business transformation.