What Is Retargeting and How Can It Boost Conversions?

What is retargeting?

Retargeting is a strategy in digital marketing. It identifies users who recently visited a company’s website or engaged with a previous advertisement for the brand. Then, it delivers additional ads to them. This is intended to increase engagement and, ultimately, drive conversions. By focusing on an audience that’s already demonstrated interest in your business, you can get more bang for your marketing buck.

“Retargeting is a digital strategy that is used to maximize media spends by reserving ads to warm users,” said Gerard LaFond, managing director of The Hoffman Agency. “By engaging with nonconverting recent site visitors, you are serving ads to targets more likely to respond favorably with engagement, like clicking on your ad again and completing the intended conversion — typically a form fill, site visit or transaction.”

The rationale for a retargeting ad is that a user who previously engaged with an advertisement had at least a modicum of interest in the associated product or service. The theory goes that this is a better retargeting demographic than spending marketing funds delivering ads to users who may or may not be interested in your brand. Also, since most consumers visit a company’s website for the first time to simply browse, retargeting helps keep the brand in the prospect’s mind. It also dramatically increases the likelihood that they will convert.

“Retargeting helps to reengage potential customers and get your offer in front of them again,” said Joe Harulow, founder of Sprint Creative. “This can have a big impact on sales, as the people being remarketed to have normally shown some form of commercial intent.” 

How does retargeting work?

Retargeting can occur on several channels and ad platforms. It starts with setting up advertisements and calls to action (CTAs) with the appropriate technology; this practice tracks user impressions and engagement.

“The main channels for retargeting are search, social and display,” said LaFond. “The best way for a small business owner to start their retargeting efforts would be to ensure all tracking, including the appropriate channel pixels for attribution and audience bucketing, are set up correctly and in place.”

Once you start tracking your audience’s online activities, you can determine precisely which type of potential customer to remarket to. Generally, ad retargeting focuses on users who have expressed some interest in making a purchase but, for whatever reason, dropped out of the sales funnel along the way.

Example of retargeting

If you see ad content for a funny T-shirt on your social media feed and like the post, you’ll likely see the same advertisement on your feed again. That’s because your engagement with the ad allows the t-shirt brand to identify you as a potentially interested user; it then remarkets its advertisement to you.

“If your prospects are spending time on social media platforms, it may make sense to tap into some of the platform’s retargeting features,” LaFond said. “Have you ever wondered why you see an ad on Facebook for a product you just looked at online? That’s retargeting, and it can be very powerful for certain brands and audiences.”

As you connect with your audience on social media, you’ll increase the likelihood they’ll make a purchase from your business. Similarly, search retargeting focuses on bringing previous, nonconverting website visitors back to a brand’s page to drive conversions.

How can you boost conversions with retargeting?

The following tips can help you boost conversions — whether that means sales, sign-ups or some other action — during your retargeting campaign.

• Include simple CTAs: Retargeting advertisements should differ from those intended to drum up general brand awareness. Retargeted users are more likely to engage with clear and simple CTAs, such as “shop now” or “learn more.” Deliver these CTAs in a short, imperative language and make them easily clickable to lead to your preferred landing page.
• Employ A/B testing: To know which types of ads are the most effective for your retargeting campaign, test two different versions of the same advertisement. After a brief trial period, review which version drove more engagement and consider widely deploying the more successful one.
• Be creative with retargeting options: Retargeting advertisements could be static, dynamic or video-based. Depending on what suits your value proposition and your audience segments, consider employing different types of ads to keep things fresh.
• Continuously optimize your approach: Don’t let your retargeting campaign run on autopilot. The best marketing campaigns are those that brands reassess and fine-tune regularly. Revisit your retargeting campaign continuously, analyze the results and consider opportunities to improve it; this can consist of altering the frequency with which ads are served to prospects or revising the CTAs in those ads.

What are the benefits of retargeting?

Retargeting complements every aspect of your broader digital marketing strategy; it identifies mid- to low-funnel prospects who have not yet converted and keeps your products and services top of mind. By reserving advertisements or CTAs to users who previously considered a purchase or indicated an interest in your product or service, you increase the odds that they will eventually become customers. The chances that a user forgets about their initial engagement and never returns to your brand’s webpage are significant without retargeting.

“Retargeting is one of the most effective advertising techniques at the conversion level since we direct our efforts to users who have previously been in our store and, therefore, are interested in the products we sell,” said Laura Aranda Rivera, data steward at Leadtech Group. “With retargeting, we will decide which of our users to impact. For example, we could remarket to only those who have abandoned the shopping cart in the last 30 days.”

By retargeting that specific audience segment, Rivera’s marketing efforts are more effective. Keep reading for more information on why retargeting is beneficial.

Reaches the right customers.

Traditional marketing outreach creates contacts with random strangers, and there are no guarantees you can generate any purchasing interest from them at all. You cast a wide net and hope for the best — even though the number of quality leads per spending in these outreach programs is usually low. But with retargeting, you’re spending marketing resources on individuals who have already demonstrated interest in your business. That interest level may vary, but you are ditching the mass rejection that comes with cold-contact marketing.

Adds value to cold contacts.

Cold contacts still have value. But, you can boost your return on investment (ROI) if you try to capture their attention with retargeting. To retarget cold leads, you must connect with them using a theme. This could include something personalized, such as a reason why your company is better than its competitors or a new product launch. Make your theme recognizable to your brand and provide an incentive for cold leads to get excited about your business.

Presents upselling and cross-selling opportunities.

Getting a customer to buy your product once is only half the battle. The true goal is to turn a one-time customer into repeat business and drive more revenue from them. By tracking which products a customer has shown interest in, you can create targeted ads for them. They’ll show a range of related products and encourage the customer to purchase additional products when they are checking out or after making their first purchase.

You can upsell and cross-sell to potential and existing customers. Retarget these individuals by using the abandoned cart method. Or, you can provide a discount for bundled services or offer complimentary product samples. These efforts can increase overall revenue.

Increases brand recognition.

The more a consumer is exposed to your brand via retargeting, the more your company will stay in their consciousness. This recognition can lead to referrals, word-of-mouth buzz and even the potential for brand ambassadors.

What are the downsides of retargeting?

Before you develop a retargeting campaign, it’s important to understand a few potential drawbacks.

Privacy issues

Some retargeting tools can use tracking methods and cookies to gather data without consent. Companies must be transparent with consumers about the data they collect and comply with laws like the General Data Protection Regulation.

>> Learn More: How to Make Your Website GDPR-Compliant Quickly and Easily (and Why You Should Immediately)

Always be cautious when personalizing ads. Most consumers today understand how ad targeting works. But, you don’t want to be intrusive or make potential customers feel like you are spying on them.

Too many ads

Sometimes, successfully retargeting a lead or customer can take several rounds of ads. The risk here is turning the consumer off, so be careful not to overuse retargeting. If someone sees the same or similar ads too frequently, they may start to dislike your brand. Or, perhaps just as bad, they’ll unsubscribe from your email list or purchase from a competitor.

What is the difference between retargeting and remarketing?

The term “retargeting” is often used synonymously with “remarketing.” However, there is a slight difference between the two. Retargeting and remarketing are both intended to reengage past customers and prospects who previously indicated an interest in a brand’s products or services. However, remarketing is typically reserved for the email channel.

“Remarketing is the act of bringing people back to your business through email campaigns and reaching out to the people who have had certain interactions on your website,” Harulow said. “Retargeting, however, is more focused on paid advertising and tracking events that happen on your website or ad campaigns, [such as] product clicks, clicks on your ad [and] form fills.”

The difference in terminology today is largely semantics. Both retargeting and remarketing can be part of a marketing plan that brings previously engaged users back into the sales funnel and encourages them to become customers. The significant difference between the two is the channels through which the strategy is applied.

“These terms are used fairly interchangeably these days,” said LaFond. “For a more technical definition, remarketing is considered to be more email-specific and retargeting is site- or cookie-based. Both of these strategies are pushing users back to complete an action on site, but the path can vary.”

High-quality email marketing services can help you with remarketing, while the best website builders and tools like Google Ads are useful for retargeting.

“Remarketing is a powerful marketing tool that complements your brand and drives conversions across your marketing funnel,” LaFond said. “It should be considered complementary to all your marketing efforts.”

When should you use retargeting?

There are scenarios where retargeting makes more sense than other marketing strategies. For example, a common practice is to retarget customers who have abandoned an online shopping cart. However, you may also want to use retargeting not because of a consumer’s action but because of changes in your business.

For example, when you roll out a new product or service, you want to ensure loyal customers are aware of it. So, you might launch a retargeting campaign to draw attention. There may be times when you need to sell excess inventory; retargeting can be helpful then, too. Another scenario is with rebranding: Retargeting can inform your customers of updates to your brand and drive home your new message.

Done right, retargeting can help you boost conversions of all kinds easily and improve your overall ROI for your digital marketing campaigns.

Kimberlee Leonard and Julie Thompson contributed to this article. Source interviews were conducted for a previous version of this article.