Drugstore.com Uses Dynamic, Personalized Ads To Reach Customers

Last week, in order to write my last blog "Online Sales of Nutritional Supplements", I visited a few online supplement retailers, Drugstore is one of them. Separately, I Google searched a product named "Sambucus Original Syrup" together with a few vitamins. Yesterday, when I was playing a Chinese song on YouTube, I noticed that there was a drugstore Ad on the right side of the screen displaying 3 sambucus products and one vitamin. I was surprised for a second and then realized that it is customized advertising, which we just learned in class!

 

Drugstore calls this approach as “behavioral targeted advertising”, a function conducted by a third party on their behalf. On Drugstore's website, there is a web page explaining what information they collect and how they approach individual customers. Using cookies, web beacons, and other technologies Drugstore's partner collects data such as customer's browser type, operating system, Web sites an individual has visited, the time of the visits, the content and ads viewed, etc. By connecting information about an individual's visit on drugstore.com website with the information on other sites, Drugstore's partner could tailor advertisements and deliver product-specific, personalized ads.


In further research, I found out that Drugstore's third party should be TellApart. TellApart is a Silicon Valley based company founded by ex-Google product and engineering executives Josh McFarland and Mark Ayzenshtat. From October, 2010, Drugstore chose TellApart to deliver its dynamic, personalized Ads.

TellApart's target shoppers are those visited Drugstore online shop but left without purchasing. To display proper content in these personalized ads, TellApart rulled out a list of personal products from this retargeting program. Also, per Drugstore's request, TellApart managed to selectively display coupons and special offers to individual shopper based on the products the shopper viewed previously.


Of all of the drugstore.com shoppers who are served dynamic personalized ads from TellApart, 4% click on an ad and return to drugstore.com.Study showed that the presence of TellApart ads increased drugstore.com’s conversion rate by 19% and drove millions in incremental revenue (data from TellApart's case study on drugstore.com). 

The future of personalized ads

Sources:
1. drugstore.com Gains Substantial Incremental Revenue with TellApart’s Transactional Retargeting
http://tellapart.com/wp-content/uploads/2011/10/drugstore_casestudy_approved_08051111.pdf


2. drugstore.com web page.
http://www.drugstore.com/drugstore/qxc148674