Retargeting

The latest numbers show that only 4% of site visitors end up making a purchase. This leaves marketers with a pressing problem: How do you convert the 96% who left without buying? Retargeting.

Retargeting reminds shoppers about products they were interested in and encourages them to complete their purchase. It keeps the products fresh in the minds of potential customers. By reminding them of their interest, it increases the likelihood of them making a purchase. Let’s take a closer look.

What is retargeting?

Retargeting is a digital marketing strategy where brands serve tailored ads to potential customers based on their previous interactions with the brand, such as browsing products on a website without making a purchase. This tactic acts as a friendly nudge, re-engaging shoppers by showing them retargeted ads for those products and related items on their mobile devices, increasing the chances of them returning to complete the purchase.

Lets see it with an example:

A shopper, let’s call her Kim, browses products on your website from her laptop. She views several items, but leaves your website without putting anything in the cart. A few days later, Kim is on her mobile device and sees an ad for a product she viewed, plus some other related items she hadn’t seen before. She remembers your brand, finds the ad intriguing, and comes back to buy. This is retargeting in action.

Kim’s case illustrates a retargeting approach that establishes touchpoints to remind prospects about the products and services they showed interest in after they’ve left your site.

Whether they’re on social media, reading the news, or checking out competitors, your products stay top of mind. With abandoned carts costing ecommerce stores a whopping $18 billion in lost revenue, it’s high time to start using retargeting to recapture those sales.

How does retargeting work?

Retargeting is possible thanks to a piece of code known as: “retargeting pixel”, which is a small JavaScript code placed on the business’s website. This pixel leaves cookies on the user’s browser enabling the tracking of visitor behavior, such as pages viewed, products added to the cart, or forms filled out. By collecting this data, businesses can identify potential customers who have already shown an intent to purchase.

One great benefit of retargeting is its ability to boost brand awareness and recognition. By consistently showing relevant ads to potential customers, you can reinforce your brand message and build a stronger connection with your audience. Plus, targeting users who’ve already shown interest means they’re more likely to engage with your retargeting ads and take action.

You’re not merely allocating your budget to a wide audience; you’re focusing on those who have already shown their interest. This makes your campaigns more efficient and effective.

Retargeting vs remarketing – what’s the difference?

Retargeting and remarketing are sometimes used interchangeably, but in most marketing circles, they are not the same thing. Retargeting and remarketing are both strategies to convert a site visitor who hasn’t yet bought anything. It’s the method of outreach that’s different.

Retargeting attempts to bring visitors back to buy via display or native ads on other sites or apps.
Remarketing tries to do the same, but via email marketing. Examples include a cart abandonment email, reminding shoppers of an item still waiting in a cart, or an upsell/cross-sell email pushing other products based on what browsing history.

Most common retargeting campaigns

Site retargeting, also known simply as “retargeting”. Involves showing display ads to users who visited your site but left without making a purchase. Unlike search retargeting, it is not keyword-based and targets people already familiar with your brand. This strategy uses information from the user’s site visit to understand their intent and serve ads that encourage them to return and complete a purchase. A lower funnel, conversion-focused strategy with high ROI re-engages shoppers with ads for products they viewed or left in their cart, and can include personalized product recommendations and dynamic creative optimization.
Search retargeting. Serves display ads to users based on their keyword search behavior. For example, a furniture retailer might target users who have searched for “leather couch” or “leather sectional.” This approach leverages user intent to connect with shoppers who show interest in relevant products, even if they aren’t yet familiar with your brand. As an upper funnel strategy, search retargeting uses display ads, making it a cost-effective alternative to competitive search marketing campaigns, while also allowing for visually impactful, branded ads.
Social media retargeting. Facebook and Instagram enable marketers to retarget users with various ad formats. When a user takes actions like adding items to a cart or viewing products, a cookie tracks these actions. This cookie allows retargeting partners to serve relevant ads to these users on other sites or social media platforms, refining ad targeting over time based on user behavior and purchase intent.
Email retargeting. Targets users who have previously interacted with your website or emails by sending them personalized follow-up emails. For example, if a shopper abandons their cart or views a product without making a purchase, they can receive an email reminding them of the items they showed interest in, sometimes including promotions or discounts to encourage them to complete the purchase. This method leverages user behavior and engagement to re-engage potential customers, providing a cost-effective way to nurture leads and drive conversions.

Why use retargeting advertising?

Besides addressing the 96% problem, 28% of purchases are products that weren’t previously viewed, that’s what makes retargeting an effective strategy for businesses looking to increase brand awareness, boost conversion rates, and enhance ad relevancy.

Let’s dive into these benefits and see how retargeting can elevate your marketing game:

It reinforces and reminds. Shoppers need to be exposed to an ad several times before they’ll buy something. Especially today, where there are so many twists and turns and distractions along the path to purchase. Retargeting provides a gentle reminder of that shirt, or pair of shoes that a shopper was browsing, and reignites their desire to buy.
Higher conversion rates and ROI. Retargeting is highly profitable, especially when run according to best practices. Personalized ads, served at the right time, deliver maximum engagement. And with CPC-based pricing (offered by some retargeting providers), you only pay when someone clicks, so your budget goes further.
It’s a cross-device, omnichannel solution. Shoppers move across screens with ease – to meet them, advertisers need to be able to do the same. Some retargeters can match a shopper across desktop, mobile, and apps, allowing you to reach them with a consistent message and experience wherever they are. Some can even use offline data to inform the retargeting program, like stopping ads because a shopper bought the product at a physical store.
Improved ad relevancy and targeting. Unlike traditional advertising methods, retargeting allows for more precise ad targeting. You can segment your target audience based on their interactions with your site, delivering tailored ads that align with their interests and preferences. This customization leads to better ad relevancy, making users more likely to engage with your ads and take the desired action.
It’s a smart way to convert an already interested shopper. Whether they were just visiting your site, or actually put an item in the cart, these are people who have shown an interest in your products. Which means the effort it will take to win them over is much less than someone who’s never been to your site before. A smart retargeting solution can help you reach these shoppers at the right time, with the right product for maximum sales and profits.

How much does retargeting cost?

The actual cost of a retargeting campaign depends on the cost of each ad placement and, of course, on the budget you allocate. The value you get depends on the pricing model being offered and your specific goals.

Typically, retargeting campaigns are offered on a CPM or CPC cost basis:

CPM = Cost per “mille” or 1,000 impressions
CPC = Cost per click

CPM is best when your goal is awareness. As you pay for impressions, but aren’t guaranteed any clicks, Often, you end up paying for an ad placement that’s at the bottom of the page and goes unnoticed. This isn’t the best strategy for boosting sales.

CPC is the optimal strategy when your goal is conversion. Implies that you’re only charged when a user clicks. When you have a specific performance goal, like increasing revenue, CPC is the model of choice.

What’s the difference between static and dynamic retargeting?

Static retargeting involves creating a set group of ads to be served depending on which pages of your site someone visited.

Say you developed a marketing campaign around an eBook. You create four ads that direct people to the eBook. Each one is triggered when a visitor browses a specific product page or article on your site. One ad may target people who looked at the product, while another may appeal to those who read articles about a topic similar to that of your eBook.

Static retargeting is best for B2B companies. This is also an effective approach when your goal is to reach a particular demographic, rather than a specific person, or when you’re focused on promoting a single product or deal.

Dynamic retargeting creates custom ads for each shopper. It requires more sophisticated technology, including machine learning, to analyze shopper behaviors, tailor the ad based on individual preferences, and determine when to serve the ad to maximize the likelihood of conversion.

If you’re in the B2C commerce business, and have a large product catalog, and a large existing customer base, dynamic retargeting is for you. The variables involved in a successful retargeting ad are simply too great to do manually, and the ROI of delivering personalized and ads is too great to pass up. In fact, 88% of U.S. marketers reported seeing measurable improvements due to personalization — with more than half reporting a lift greater than 10%.

What are some dynamic retargeting best practices?

Use a technology that deeply understands your site visitors. Having access to a massive amount of shopper data that can adapt in real-time to constantly changing behaviors and interests is crucial for driving performance at scale. This requires a powerful technology that can do just that, aligning with your objectives and driving growth for your business over time.
Show only the most relevant products. Important for you to go beyond showing shoppers the last product that they viewed on site, or even the top converting products. To inspire them to engage with your brand, you need a proven product recommendation technology that’s able to predict which products they would be most interested in buying – even if they haven’t viewed them on your site.
Reach shoppers when and where they are most likely to convert. Having the ability to predict in real-time when a shopper is most likely to convert, and reach them at that moment requires both a powerful predictive technology and access to the best and broadest inventory – including app and video inventory.

5 steps to run a successful retargeting campaign

Segment your audience. Divide your audience into specific groups based on behaviors, interests, or demographics. This allows for personalized ad experiences that resonate with each segment, increasing the chances of conversion.
Create compelling ad creatives and messaging. Design visually appealing ads that stand out and craft persuasive messages highlighting your product’s unique value. Addressing pain points and focusing on benefits can entice potential customers to take action.
Optimize frequency and ad placements. Balance ad frequency and placements to avoid ad fatigue and annoyance. Show your retargeting ads in the right places at the right times to capture potential customers’ attention. Test different frequencies and placements to find the best combination for conversions.
Use comprehensive technology. Leverage technology for real-time data adaptation, recommending relevant products beyond recent views, and reaching shoppers at optimal conversion times.
Analyze and optimize. Evaluate your data, conduct A/B testing and enhance according to patterns and findings. Be prepared to alter what isn’t working properly.