Ever notice after searching online for a new pair of shoes or that cool new backpack ads for those very same products start popping up everywhere you go online. It’s not coincidence, it’s retargeting (or as digital marketers call it remarketing). Its a widespread technique advertisers use to keep their products top-of-mind. Why, well it kinda works – even though it is often cited as one lf the most annoying parts of online ads for users.
But these seemingly harmless ads, have a more sinister side, silently inflating the prices you pay and limiting your choices without you realizing it.
How you ask, well to understand the how we need to how retargeting works.
How Retargeting Ads Actually Work
Retargeting, or remarketing, is a digital marketing tactic used be advertisers to show ads to individuals who have previously shown interest in their products or services.
“Interest” is a used very loosely here. Well executed retargeting feels, personal and, well targeted – its ads from product pages you have visited or items left in your Wishlist. But the reality is businesses are desperate to use any data they can to show you targeted ads that any visit to a site that is set up for retargeting results in those ads following you around the internet, often with products that you simply don’t want.
Websites that are set up for retargeting carry cookies or tracking pixels placed to record your browsing behaviour, allowing ad networks, and by extension advertisers, to serve you ads tailored to your previous interactions.
Retargeting as a tactic is so popular as it has significant impact on conversion rates, as targeted consumers are more likely to purchase items they’ve previously considered – and if that sounds a bit obvious, Well it is.
But what are the hidden costs of this approach to the end user? The answer to that lies in pricing.
Hidden Costs: How Personalised Ads Affect Pricing
Data is one of the most important cogs in the digital marketing machine. The ad network ecosystem (Google, Meta et al) trade on data, make money from data and change businesses money to access data to place ads.
Retargeting appeal lies in the relative ease of data capture. Drive traffic to our site, track user behaviour and hey presto we can follow you around with (so-called) tailored adverts ad-nauseum.
The hidden cost is far more than the anger you might feel from being followed online. When advertisers know exactly what you’re interested in, they can employ pricing strategies designed to capitalise on your demonstrated intent.
Some of the most common pricing strategies include;
- Price Discrimination: Different prices shown to different consumers based on their perceived willingness or ability to pay. Orbitz, for instance, once displayed higher-priced hotel options more prominently to Mac users, assuming they would pay more.
- Selective Pricing: If you’re being retargeted after showing interest, you might never see special discounts or promotional offers that are available to other customers. Retailer often customise prices based on your browsing history
- Reduced Competition: Targeted retargeting ads can monopolise your attention on a single retailer or brand, making it less likely you’ll shop around for better deals or alternatives.
Case Studies: Real Examples of Inflated Prices
- Orbitz and Mac Users: Orbitz steered Mac users towards more expensive hotels after discovering this demographic tended to spend more, subtly manipulating users into pricier options.
- Staples’ Pricing Strategy: Investigations revealed Staples displayed different prices online depending on customers’ locations – higher prices appeared for users further from competitor stores – clear gouging of people located further away
The rise of dynamic pricing
Dynamic pricing, a strategy where prices fluctuate based on various factors, is prevalent in industries like airlines, accommodation booking services, and ticketing platforms is a hot button topic, and the bastard child of traditional retargeting and state of art data-led on site Behavorial targeting.
These industries utilise user data, browsing behaviour, and retargeting techniques to adjust prices dynamically.
In the airline industry, dynamic pricing algorithms analyse factors such as demand, booking patterns, and even competitor actions to set ticket prices in real-time. For instance, you start searching for flights, switching between airlines and comparisons sites. Yournbooking intent is tracked and prices adjusted accordingly. Similarly, hotel booking platforms adjust room rates based on occupancy levels, booking windows, and user behaviour, leading to significant price variations for the same room depending on when and how a customer searches
Ticketing services for events also employ dynamic pricing, where ticket prices can escalate rapidly based on demand and user engagement. For example, concert tickets may initially be offered at a standard price but can surge to higher amounts as demand increases, sometimes resulting in significant price disparities among attendees.
These practices highlight how dynamic pricing, combined with user data and retargeting, can lead to consumers paying more based on their online behaviour and perceived willingness to pay. This reinforces the importance of transparency and fairness in pricing strategies, as well as the need for consumers to be aware of how their data influences the prices they encounter online.
How can you make more informed decisions about how your data is tracked and used?
Transparency and Fairness: The Need for Change
The introduction of Apple’s App Tracking Transparency (ATT) feature in iOS 14 marked a significant shift in user privacy awareness. This update required apps to obtain explicit permission from users before tracking their activity across other companies’ apps and websites. As a result, users became more conscious of how their data was being used, leading to increased scrutiny of online tracking practices.
This heightened awareness has prompted other companies to adopt similar measures, such as implementing more transparent privacy policies and offering users greater control over their data. Consequently, users now frequently encounter prompts and messages on websites and apps, informing them about data collection practices and seeking consent for tracking activities.
While this shift towards greater transparency is good, it still falls way short – who reads those consent prompts on a website anyway?
I bet you are still seeing loads of a ads?
What can you do to take action;
- Clear Cookies and Trackers: Regularly delete cookies or use privacy-focused browser extensions.
- Use a Privacy-Centric Search Engines: Timpi actively protect your data while providing the only unbiased web index.
- Support Transparency and Regulation: Advocate for clearer online pricing disclosures and data privacy regulations.
Search engines are often our starting point, directing us to the sites and solutiomns we seek. So they need to play a bogger role in unmasking how your data is used. Decentralized and privacy-focused search engines, like Timpi, offer users a different online experience. Without tracking user behaviour, Timpi delivers fair and transparent search results and pricing. Reults are contextutal – ads relevant only to your immediate query rather than your entire browsing history (Timpi does not support any form of retargeting) – leveling the playing field, ensuring everyone sees the same price.
Empower Yourself, Protect Your Wallet
Awareness is the first step in regaining control over your online shopping experience. Recognising how retargeting manipulates your purchase decisions and inflates prices empowers you to demand better. Choose setting that help control data, choose platforms that prioritise your privacy and transparency, and protect your wallet for data manipulated pricing.