What are retargeting ads and how do they work?

SecureCategory
9 min read
Harshit Baluja

How often have you seen the customers purchasing the product or service at first glance? Well, less often.

Many of the people who visit your site for the first time leave without purchasing anything.

That’s when retargeting comes in. It helps you bring back those who had abandoned the cart or left after performing some action.

But what does this term broadly mean and how can businesses use this form of sales technique?

In this blog, we will dive deeper into the definition of retargeting including its benefits and strategies. We will also suggest popular retargeting software.

What is retargeting?

Retargeting is a form of online advertising technique used with people who have left your website or your company’s social media profile after viewing it.

Suppose a shopper abandoned the cart after adding the product.

You can display the retargeting ads on their social media or another website they visit.

Seeing these ads, shoppers can reconsider their decision while it is still fresh in their minds. The benefit for your business is more sales and revenues. It’s a win-win situation.

How does retargeting work?

Businesses use retargeting with multiple digital channels including:

  • Paid ads
  • Search and display networks
  • Social media
Example of a retargeting ad

When these visitors browse the internet, the cookie works in tandem with a retargeting provider like Google ad network to display an ad on the website or their social media.

To set up the search and display ads retargeting campaign, you can use the retargeting software that tags users and compiles them in a list with their unique ID.

Types of retargeting strategies

Businesses use various retargeting ads to boost conversions and gain leads through digital advertising.

Conversion rate is the number of people who take a desired action — for example, make a purchase or request an estimate.

While there are a number of retargeting strategies, here are the three that are creating a buzz in the market:

1. Pixel-based retargeting

The most common type of retargeting uses pixels (i.e., JavaScript code) to display your retargeting ads to any anonymous visitor to your website.

When a user visits your website, the browser sets a cookie that displays the retargeted ads to that person based on their past behaviour.

Using this form of retargeting, the user sees the ads as soon as they leave after visiting the specific pages on your website.

The only downside to pixel-based retargeting is that you need a higher traffic volume to your website to get better ROI (return on investment) from this type of campaign.

2. List-based retargeting

If you have got a long email list of your website subscribers, list-based retargeting will come in handy.

List-based retargeting works by targeting the audience from your existing lists. This list can be:

  • Your email database
  • The list of visitors gathered from your previous retargeting ads

It works simply by uploading the list of prospects to a retargeting platform, like Facebook or Twitter. Next, you create an ad that is tailored to these users.

Once you set up the campaign, the ad platform will show ads to the users on these networks using their email addresses.

The good thing about list-based retargeting ads is that it lets you create highly personalized ad campaigns.

However, chances are that there might be a mismatch between the email addresses on your list and the ones that users use to manage their social media accounts.

3. Search-based retargeting

Search-based retargeting not only helps with conversions, but also drives qualified traffic to your website. For this reason, it is one of the most popular retargeting strategies.

This form of remarketing targets people who have previously searched for certain keywords or phrases on the internet. 

Let’s say a user searches for “sports shoes'' on the internet. Footwear brands like Nike can use these search queries and similar phrases to re-target users on their social media, apps, or video streaming platforms.

So, the next time a user visits Facebook or Instagram, they will be continuously shown Nike ads showing sports shoes.

Is retargeting worth the effort?

With a tactical retargeting strategy in place, businesses have various advantages:

Higher conversion rates

One of the significant benefits of retargeting is the increase in sales. Retargeted visitors are more likely to become customers.

By presenting visitors with personalized ads, businesses get a chance to display their products tailoring to the individual’s needs.

Connect with potential customers

Person looking at Instagram on their phone

The good thing about retargeting strategy is that it is aimed at those who are already interested in your product or service.

For instance, a travel agency can retarget the visitors who have already checked out the hotels but did not take the plunge to book one. The agency can run retargeting ads to prospects with better deals and offers.

Cost-effective strategy

Higher conversions mean better ROI.

Since your ads are presented to the users who have already shown some interest in your product, you avoid spending on a large section of people who may or may not be interested.

Reduce the cart abandonment rates

For eCommerce, cart abandonment has always been an issue of concern. This is when a visitor adds the products to their cart but leaves before paying for the order.

Retargeting can be a great outreach marketing tool for eCommerce sellers.

It helps retain these abandoned cart prospects using email marketing. Businesses can nudge potential buyers by reminding them about the products they wanted but walked away from.

Editor's note: If you build your ecommerce store with GoDaddy's store builder, you can set it to automatically send out a reminder email to any shopper who puts something in their cart but leaves without checking out. Try GoDaddy's store builder for free.

Boost brand visibility

Not every buyer would scour the internet with the intent of buying. Retargeting can be a great marketing tool to keep your brand ahead of competitors.

This means when a prospect considers purchasing a product next time, they will reconsider checking your website because of the constant ads on their social media platform or the websites they visit.

Retargeting vs remarketing: Know the difference

Retargeting and remarketing are often used interchangeably because of their shared end goals. Though the two terms might have different meanings, there is a striking similarity in methodology as well as the tools.

  • Retargeting engages previous site visitors through emails, social media, or display ads
  • Remarketing helps in re-engaging with customers through email

Retargeting can be used when a prospect is close to becoming a customer. In contrast, remarketing is a top-of-the-funnel strategy where the goal is to bring the customers in to your website, where you can convince them to buy.

The shared goal of both these approaches is to remind the users about your company’s existence, improve brand awareness and encourage action.

Related: Brand marketing for web developers

How to launch a retargeting campaign?

A lot of things go into creating a retargeting campaign. The first thing is to know the right time to launch the retargeting campaigns.

It is best to run these campaigns once your website has hundreds of monthly visitors.

The next thing is to choose the type of retargeting campaign. Choose whether you are looking to drive more conversions or build brand awareness.

  • If your goal is to drive sales, it is better to create sales-oriented ads tailored to specific users.
  • In the case of brand awareness, you can create a retargeting ad that conveys the mission of your company.

Do not forget to segment your audience before launching the retargeting campaign. Most retargeting tools offer filters for segmenting the audience based on various factors.

Here are two of these factors:

Demographics: Where are the majority of your target audience located? What is the average age of those who buy from you? What languages do your site visitors speak?

By answering these questions, businesses can better create ads for their target audience.

Time frame:  Retargeting tools also use the time spent as the metric for audience segmentation. By identifying the time between the first and last visit, these tools would only target the users that lie within that specific time frame.

Related: How to create a multilingual website

It might be hard to launch your retargeting campaigns without the right retargeting software. A retargeting tool helps you set up campaigns, tracks shoppers' journeys, and provides insights.

Hence, here are the top three such tools:

Mailchimp

Mailchimp is an AI-powered marketing tool that sends automated campaigns. You can:

  • Set up ad campaigns
  • Schedule emails
  • Build landing pages
  • Run social media ads within a single dashboard

They have a suite of user-friendly free tools in their arsenal. For this reason, 72% of their audience database comprises small businesses for ad campaigns.

Man looking at a restaurant website

AdRoll

For over 12 years, AdRoll has been helping eCommerce business owners create retargeting campaigns. It integrates with eCommerce platforms like Shopify and Magento.

Further, AdRoll can also connect with other marketing tools like Mailchimp and Marketo to seamlessly transfer customer information from one place to another.

This retargeting tool works best for abandoned shopping carts and brings lost customers through product recommendations.

Criteo

Criteo is one of the popular remarketing tools, with over 16000 publishers. It is a dedicated retargeting solution that evaluates the shopper’s journey across every device and assesses the shopper’s intent.

You can connect Criteo with Facebook, Instagram, or any other retargeting platform to display personalized ads.

Final thoughts

Retargeting is all about bringing back the users who have shown interest in your product. Hence, it can maximize the chance for conversions as well as ROAS (return on advertising spend).

With personalized retargeting ads, businesses can further compel the lost customers to take action.

It might sound easy, but there are a lot of things that go into creating a powerful retargeting campaign.

Here is a quick highlight of how to do it:

  • Set your marketing goals
  • Run a list of customers and segment them
  • Design a powerful and captivating ad copy
  • Determine the retargeting platforms to run your ads

Best of luck in retrieving all those lost customers!