Last Updated on June 21, 2023 by Hanson Cheng
This comprehensive guide will walk you through the world of retargeting ads, including their importance for increasing brand awareness, improving conversion rates, and reducing cart abandonment. With an in-depth understanding of how retargeting ads work and the different types available — such as pixel-based, list-based, search, email, mobile, video, and social retargeting — you’ll learn how to set up a successful retargeting campaign.
The article also discusses crucial metrics and KPIs to track and best practices to follow. Additionally, you’ll gain knowledge of various retargeting platforms and tools and understand the challenges and privacy concerns surrounding retargeting ads.
Understanding Retargeting Ads
What are Retargeting Ads?
Retargeting ads, also known as remarketing ads, are online advertising campaigns specifically designed to target users who have previously visited or interacted with a brand’s website or content. The main aim of retargeting ads is to bring back potential customers who left without completing a desired action, such as making a purchase, signing up for a newsletter, or requesting a demo.
By displaying relevant and personalized ads across different platforms or websites, retargeting ads remind users to return to the brand and complete the intended action.
Why Retargeting Ads Are Important
For several reasons, retargeting ads play a crucial role in an effective digital marketing strategy. They help increase brand awareness, improve conversion rates, and reduce cart abandonment.
Increasing brand awareness
Retargeting ads are often used to maintain and strengthen brand awareness. When users see a brand’s advertisement multiple times, they become more familiar with it, and the brand remains at the top of their minds.
This increased visibility can help create a sense of trust and credibility, especially for new businesses trying to establish themselves in a competitive market. Retargeting ads can be considered a reinforcement tool that helps the target audience recognize and recall the brand when they are in need of the products or services it offers.
Improving conversion rates
One of the primary goals of most digital advertising campaigns is to drive more conversions. However, not all users visiting a website or landing on a product page are ready to convert immediately. Retargeting ads help in guiding these users, who might be in different stages of the sales funnel, back to your website for further interactions. Personalized and targeted ads will also help address specific user concerns or objections, making it more likely for them to convert.
By retargeting previous visitors and nurturing their engagement with the brand, marketers can improve overall conversion rates as well as the return on investment (ROI) of their marketing efforts.
Reducing cart abandonment
Shopping cart abandonment is a common issue faced by many e-commerce businesses. Users might add items to their cart but leave the website without completing the purchase – often due to distractions, second thoughts, or unexpected issues. Retargeting ads can help remind these users of the items they left behind and nudge them toward completing the transaction.
Offering exclusive discounts, free shipping, or time-sensitive deals through retargeting ads can effectively encourage users to revisit the website and complete their purchases.
How Retargeting Ads Work
Marketers rely on a combination of tracking technologies and ad platform algorithms to implement effective retargeting ads.
Tracking cookies and pixel tags
The most common method for tracking user behavior and engagement for retargeting purposes is through cookies – small text files stored on a user’s device – and pixel tags. A pixel tag, also known as a tracking pixel or web beacon, is an invisible 1×1 image embedded in a website or email that triggers the placement of a cookie on the user’s device when they visit the page or open the email.
The information collected by these cookies, such as pages visited and items added to the cart, helps to inform the retargeting ad campaigns and serves personalized ad content to the users.
Ad platform algorithms
Once a user is “cookied” by visiting a website or interacting with specific content, ad platforms like Google AdWords or Facebook Ads use their algorithmic tools to display retargeting ads to these users as they browse other websites or use social media. The ad platforms identify the cookied users, match them with the retargeting campaigns created by the advertiser, and serve the appropriate ads based on the user’s past behavior and preferences.
By leveraging these intelligent algorithms, retargeting ads can focus on highly relevant audiences and increase ad performance, ultimately delivering better results for brands and marketers.
Different Types of Retargeting
Retargeting is a powerful digital marketing strategy used to re-engage audiences who have previously interacted with your brand, visited your website or shown interest in your products or services. By serving specific ads to this highly interested audience, retargeting can significantly boost your conversion rate, sales, and brand recognition.
This type of retargeting is highly effective, as it is real-time and allows advertisers to target users as soon as they leave their website. However, since pixel-based retargeting relies on cookies, it can be affected by increasing privacy regulations and users who delete or block cookies.
List-based retargeting targets a specific list of users, typically compiled from email addresses or other contact information. The list can be uploaded to an advertising platform that will then serve ads to users associated with those email addresses.
This type of retargeting can be effective for targeting specific segments of your audience and personalizing campaigns, but it depends on the accuracy and relevance of your list data. It can also be less effective than pixel-based retargeting in targeting anonymous website visitors, as it relies on already collected contact information.
Search retargeting targets users based on the search terms they have entered into search engines like Google, Bing, or Yahoo. By analyzing these search queries, advertisers can serve relevant ads to users even if they haven’t visited their website.
This type of retargeting is effective in reaching new audiences who may be interested in your products or services but have not yet interacted with your brand. However, it requires accurate keyword research and can sometimes be more expensive than other retargeting methods due to keyword bidding competition.
Email retargeting involves personalizing email content based on the user’s previous interactions with your website or email campaigns. You can use email retargeting to send personalized offers, upsells, or abandoned cart reminders based on user behavior.
This type of retargeting can be highly effective for boosting email open rates, click-through rates, and conversions but relies heavily on having an engaged and well-maintained email list.
Mobile retargeting focuses on engaging users who have interacted with your brand through a mobile app or mobile website. Considering the substantial growth in mobile usage, mobile retargeting can effectively reach users on their smartphones or tablets.
This type of retargeting can provide a strong return on investment, but it requires delivering an optimal mobile experience, including a user-friendly app or mobile-optimized website.
Video retargeting involves serving video ads to users who have previously watched your videos or interacted with your brand on platforms like YouTube or Vimeo. It can also include targeting people who have engaged with specific video content, making it a powerful tool for brands with a strong video presence.
This type of retargeting is particularly effective for boosting brand awareness, but it requires investing in high-quality video content and optimizing video ads for different platforms.
Social retargeting targets users who have interacted with your brand on social media platforms like Facebook, Twitter, LinkedIn, and Instagram.
Facebook retargeting, also known as Facebook Custom Audiences, allows advertisers to target users who have previously visited their website, used their mobile app, or engaged with their content on Facebook.
Twitter retargeting, or tailored audiences, works by targeting users who have engaged with your tweets, visited your website, or are part of your email list.
LinkedIn retargeting utilizes the platform’s Matched Audiences feature to target users who have visited your website or fit specific profile characteristics.
Instagram retargeting is particularly powerful for brands with a strong visual presence, as it enables you to target users who have engaged with your Instagram content, visited your website, or interacted with your Facebook ads.
Overall, retargeting can be a highly effective strategy for re-engaging your audience and boosting conversions. To achieve optimal results, consider combining different types of retargeting methods to reach leads across various channels and platforms.
Setting Up a Retargeting Campaign
Retargeting campaigns enable businesses to re-engage with consumers who have visited their website or interacted with their brand but have not made a purchase. By setting up a retargeting campaign, marketers can influence those people to return to the website and potentially convert.
Steps to Set Up a Campaign
- Defining the audience: The first step to setting up a successful retargeting campaign is to determine the desired audience. A well-defined audience ensures that the ads reach the right prospects on the right channels. Consider factors like browsing and purchase history, time spent on site, and visitor demographics while defining the audience.
- Creating or collecting creative assets: Engaging, well-designed, and relevant creatives are essential for the success of a retargeting campaign. Marketers must ensure that the ad copy and visuals are tailored to the audience’s preferences. Using dynamic ads, which feature personalized layouts or recommendations, can increase relevancy and improve performance.
- Setting budget and bidding strategy: Establishing a budget and determining the bidding strategy are essential for maximizing return on investment. Set a daily or lifetime budget, and decide whether to use manual or automated bidding. Manual bidding allows for precise control over costs, while automated bidding can optimize bids for the desired outcome.
- Launching the campaign: After defining the audience, gathering creative assets, and setting the budget, the retargeting campaign can be launched. Monitor performance closely, and make adjustments as necessary to optimize results.
Crucial Metrics and KPIs to Track
- Conversion rates: The conversion rate measures the percentage of people who click on the retargeting ads and complete a desired action, such as making a purchase. Low conversion rates indicate that the audience targeting or ad creatives need to be refined.
- Click-through rates (CTR): CTR shows the percentage of people who click on the retargeting ads out of those who see them. Low CTRs may indicate that the ads are not compelling enough or are not reaching the right audience.
- Return on ad spend (ROAS): ROAS is calculated by dividing the revenue generated from the retargeting campaign by the total cost of the campaign. This crucial KPI shows how much money is made for every dollar spent on advertising, allowing marketers to evaluate the effectiveness of their efforts.
- Cost per acquisition (CPA): CPA measures the total cost of acquiring a new customer through the retargeting campaign. Optimizing for a lower CPA ensures a more cost-effective campaign that delivers better results within budget constraints.
Best Practices for Retargeting Ads
- Segmenting audience: Divide the audience into categories based on their behavior, interaction with the website, and preferences. Tailoring ads for each segment will increase relevance and overall performance.
- Frequency capping: Set a limit on the number of times an ad is shown to a user within a specific time frame. Frequency capping prevents overexposure, which can lead to ad fatigue and decreased performance.
- Updating creatives: Regularly update ad images, copy, and offers to maintain engagement and avoid ad stagnation. Fresh, relevant content contributes to better conversion rates and ROAS.
- A/B testing: Experiment with different ad creatives, audience segments, and bidding strategies to identify the highest-performing combinations. Continuous A/B testing enables campaign optimization and helps to maximize results.
- Excluding users who have converted: Exclude users who have already made a purchase or completed a desired action to avoid wasting ad spend on unnecessary impressions. Focusing on users who have not yet converted maximizes the campaign’s efficiency and improves overall results.
Retargeting Platforms and Tools
Retargeting, also known as remarketing, is a powerful digital marketing technique used to show relevant ads to users who have previously interacted with a website or mobile app. This helps businesses stay connected with their audience after they leave the site, increasing the likelihood of conversions and customer retention. Here is an in-depth look at some popular retargeting platforms and tools.
Google Ads (formerly AdWords)
Google Ads is one of the most widely used retargeting platforms that enables businesses to display ads on Google’s Display Network (GDN), which reaches over 90% of internet users worldwide. It offers a range of targeting options, including displaying ads to users who have previously visited your site or interacted with your content.
With Google Ads, you can create and manage retargeting campaigns based on specific goals, such as driving sales, generating leads, or increasing brand awareness. You can target users based on website behavior, demographics, and other interests. Moreover, Google provides outstanding analytical tools to optimize and track campaign performance.
Facebook Ads Manager
Facebook Ads Manager is a powerful retargeting tool for businesses looking to capitalize on Facebook’s vast user base. It allows you to create targeted ad campaigns that appear in the Facebook News Feed, Instagram, Messenger, and Audience Network.
Using Facebook Pixel, a small piece of code that you install on your website, you can track user behavior and use it to retarget users on Facebook. This tool offers a wealth of targeting options, including custom and lookalike audiences, making it easy for you to find and target the right audience.
Twitter Ads is another effective retargeting platform that takes advantage of Twitter’s user base. It allows you to create ad campaigns targeting users who have previously visited your site, engaged with your content or used a specific hashtag, among other targeting options.
Twitter Ads also works with the Twitter Audience Platform, which extends your ad reach to millions of users across thousands of mobile apps, further increasing your retargeting efforts. With Twitter Ads, you can track your ad campaigns’ effectiveness and optimize them for better engagement and conversion rates.
AdRoll is a popular retargeting tool that offers a comprehensive suite of display advertising, social media, and email retargeting options. It uses AI-driven techniques to optimize ad targeting and helps you reach users across 500+ exchanges, including Google, Facebook, and Instagram.
AdRoll offers granular targeting options, including website users’ behavior, CRM data, and social media engagement. Additionally, its insightful analytics and reporting tools provide valuable insights into your retargeting campaign, making optimizing it for the best results easy.
Criteo is a performance marketing platform that offers retargeting solutions to engage and re-engage your customers. Known for its dynamic retargeting ads, Criteo helps you display personalized, relevant ads based on user behavior and preferences.
Criteo’s platform uses machine learning and predictive algorithms to identify high-intent users, improving the chance of conversions. It supports retargeting across platforms, including desktop and mobile, and is integrated with major advertising networks and publishers, providing a wide reach for your ads.
Retargeter is a full-service retargeting platform that helps you optimize customer engagement and reach through display advertising. It offers website, CRM, and search retargeting tools and provides dedicated account management to help you plan and execute successful campaigns.
Retargeter supports retargeting on various platforms, including desktop and mobile, and offers advanced segmentation options, ensuring your ads reach the right audience for maximum engagement and conversion rates.
Perfect Audience is a cross-channel retargeting platform that enables businesses to re-engage with their audience through display ads, social media, and video campaigns. It supports retargeting on Facebook, Twitter, Instagram, and thousands of websites within the Google Display Network.
With Perfect Audience, you can track and optimize your retargeting campaigns in real time, access detailed analytics and reporting, and benefit from a simple, easy-to-use interface. It’s an excellent tool for businesses looking to improve customer retention and increase their digital marketing ROI.
Retargeting Ad Challenges and Privacy Concerns
Retargeting, also known as remarketing, is an advertising strategy that involves targeting users who have previously visited a particular website or interacted with an ad. While retargeting can be a powerful and effective marketing tool, it also faces several challenges and poses privacy concerns.
One major challenge for retargeting ads is the widespread use of ad blockers. Ad blockers are browser extensions or software that prevent ads from appearing on websites, and they have become increasingly popular in recent years. According to a report by PageFair, over 600 million devices were using ad blockers by the end of 2016.
Ad blockers can significantly impact the effectiveness of retargeting campaigns, as they prevent ads from being displayed to users even if they have shown interest in a product or brand. This reduces the reach of retargeting campaigns and makes it harder for advertisers to recapture the attention of potential customers. To overcome this challenge, marketers need to come up with innovative strategies, such as native advertising or sponsored content, that can bypass ad blockers and reach consumers effectively.
Data privacy regulations
With growing concerns over data privacy, various regulations have been implemented to protect users’ personal information. These regulations directly impact retargeting ads, as they impose strict rules regarding the collection, processing, and use of user data.
The General Data Protection Regulation (GDPR) is a data privacy law implemented by the European Union in 2018. It is aimed at giving users greater control over their personal data and imposes strict rules on organizations that collect and process data of EU citizens. Under GDPR, advertisers and marketers must obtain explicit consent from users before collecting and using their data for retargeting purposes.
Non-compliant companies can face fines of up to 4% of their annual global turnover or €20 million, whichever is higher.
The California Consumer Privacy Act (CCPA) is a data privacy law enacted in 2018 that aims to give California residents more control over their personal information. Like GDPR, CCPA mandates that businesses obtain explicit consent from users before collecting and using their data for retargeting purposes. Companies that violate the CCPA can face fines of up to $7,500 per intentional violation, which can quickly add up if the number of affected users is high.
Another challenge for retargeting ads is the rise of cookieless browsing. Cookies are small files stored on a user’s device that contain information about their browsing habits, and they are an essential component of retargeting. However, as privacy concerns grow, more users are opting for cookieless browsing by either blocking cookies or using privacy-focused browsers. Additionally, major web browsers like Google Chrome and Mozilla Firefox are implementing new features aimed at limiting the use of third-party cookies.
This shift towards cookieless browsing poses a considerable challenge for advertisers and marketers, as they need to find alternative ways to track and retarget users without relying on cookies. Some potential solutions include using first-party data, fingerprinting, and device graphing to build more comprehensive user profiles and target users more accurately.
Consumer Perception and Trust
Lastly, retargeting ads may face challenges related to consumer perception and trust. Some users view retargeting ads as invasive and creepy, as they seem to “follow” them around the internet. This can lead to negative feelings towards the advertised brand and may cause users to lose trust in companies that engage in retargeting.
To mitigate this challenge, advertisers must strike a delicate balance between effective targeting and respecting user privacy. This can be achieved by limiting the frequency and visibility of retargeting ads, ensuring that ads are relevant and timely, and being transparent about data collection and usage practices. By doing so, advertisers can build trust with consumers and create a more positive perception of retargeting ads.
Retargeting Ads – FAQs
1. What are retargeting ads, and how do they work?
Retargeting ads are digital advertisements aimed at consumers who have previously interacted with a website, product, or service. Using tracking pixels or cookies, retargeting ad platforms collect data on user behavior and show targeted ads when these users visit other websites, thereby increasing chances for conversion and customer retention (Singh, 2021).
2. What is the purpose of using retargeting ads in digital marketing?
Retargeting ads allow businesses to re-engage potential customers who have displayed interest in their offerings. By serving personalized ads based on users’ browsing history and preferences, marketers aim to build brand awareness, improve conversion rates, and increase customer lifetime value (Gupta, 2021).
3. What are the common misconceptions related to privacy and retargeting ads?
Common misconceptions include the belief that retargeting ads access personal or sensitive data, or that they track users across devices without permission. In reality, retargeting relies on anonymous browsing data collected through cookies, respecting data privacy regulations and user consent (Chaffey & Ellis-Chadwick, 2019).
4. How can retargeting ad performance be measured effectively?
Measuring retargeting ad performance involves assessing key performance indicators such as click-through rates (CTR), conversion rates, return on ad spend (ROAS), and cost per acquisition (CPA).-Regularly analyzing these metrics helps marketers optimize campaigns and allocate resources effectively (Dhole, 2021).
5. Which businesses benefit most from retargeting ads?
Almost all businesses can benefit from retargeting ads, especially those with an online presence. Retailers, e-commerce platforms, and service providers often use retargeting ads to increase brand awareness, drive repeat purchases, and nurture customer relationships (Nusca, 2021).
6. How can businesses avoid retargeting ad fatigue among users?
To avoid ad fatigue, limit exposure by setting frequency caps, segment audiences based on user behavior and product offerings, and continually refresh creative elements. Engaging ad formats, such as native and video ads, can also reduce fatigue and improve user experience (Dowane, 2019).