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Updated Nov 06, 2023

What Is Retargeting and How Can It Boost Conversions?

Brands can reengage users with relevant advertisements to come back into the pipeline.

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Adam Uzialko, Senior Editor & Expert on Business Operations
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If you’ve seen the same advertisements repeatedly on your social media feeds after searching for a product, you’ve been the subject of retargeting. Retargeting is a way for brands to serve previously engaged users with advertisements that might be relevant to them, increasing the odds that a user will engage with the ad and reenter the conversion pipeline.

Retargeting can help your business use its marketing budget better and complement virtually every facet of your broader digital marketing strategy. Here’s everything you need to know about retargeting and how it could boost your business’s sales.

What is retargeting?

Retargeting is a strategy in digital marketing that identifies users who visited a brand’s website or engaged with a previous advertisement recently and delivers additional ads to them. This is intended to increase engagement and, ultimately, drive conversions.

“Retargeting is a digital strategy that is used to maximize media spends by reserving ads to warm users,” said Gerard LaFond, chief digital officer/executive vice president of The Hoffman Agency. “By engaging with nonconverting but 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 of a retargeting ad is that a user who engaged with an advertisement previously has at least a modicum of interest in the associated product or service. Rather than spend marketing funds delivering ads to users who may or may not be interested, it often behooves brands to deliver a retargeting ad to users who have indicated some level of interest before.

According to a recent study by SharpSpring Ads, only 2 percent of website visitors convert on the first visit. Consumers who view retargeted ads are 70 percent more likely to convert.

“Retargeting helps to reengage potential customers and get your offer in front of them again,” said Joe Harulow, founder at 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 to track 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 can track your audience’s activities online, 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 conversion funnel along the way.

Benefits of 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, business intelligence analytics lead at Medida. “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.”

Demonstrated interest

Traditional marketing outreach creates contacts with random strangers. There are no guarantees that you can generate any interest at all. The plan is to 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.

With retargeting, you are spending marketing resources on individuals who have already demonstrated interest in your business. That interest level may vary, but you are abandoning the mass rejection that comes with cold contact marketing.

By tracking which products customers have visited, you can create targeted ads that show a range of related products. Retargeting allows you to engage customers to purchase additional products when they are checking out or after making their first purchase.

Adds value to cold contacts

Cold contacts still have value; they are a fantastic way to expand your audience, but cold connections can be bolstered dramatically by any marketing component that can boost your return on investment (ROI).

To retarget cold leads, you must connect with them using a theme. This could include something personalized, a reason why you are better than your competitors or a new product launch.

Make your theme recognizable to your brand. Provide an incentive for cold leads to get excited about your company. With each connection, allow a time gap between communications so you don’t overwhelm or annoy.

Upsell and cross-sell

A customer buying your product once is only half the battle. To turn a one-time customer into a loyal follower, you must personalize the experience.

Upsell and cross-sell to potential and existing customers. Retarget these individuals by using the abandoned cart method, providing segment customers — like those who only buy during the holidays — a discount or offering complimentary product launches. 

Did You Know?Did you know
Despite growing privacy concerns, data from Entrust shows that 64 percent of consumers are willing to trade personal information in an app for relevant, personalized or convenient services. Millennials are the most likely to provide personal information (70 percent), followed by Gen Z, Gen X and baby boomers.

Increase brand recognition

Providing consumers with helpful information is as important as selling products for business longevity. While sales pay the bills, your niche information keeps visitors returning for more.

Once visitors to your site enter contact information, you can engage them by offering free information, such as an e-book, exclusive video, webinar or whitepaper.

Downsides of retargeting

There are many benefits of retargeting. However, retargeting could also decrease your target audience in a few ways.

Privacy issues

Retargeting can use tracking methods and cookies to gather data without consent. Companies must be transparent to consumers about the data they collect, including complying with General Data Protection Regulation data collection.

Always be cautious when personalizing ads. While connecting with your target audience is vital, gathering too much personal data can give the wrong impression.

Too many ads

Sometimes, retargeting a lead or customer can take several rounds of ads. Be careful that you don’t overuse retargeting. If consumers see the same or similar ads too frequently, it can cause them to dislike your brand, unsubscribe from your email list or purchase from a competitor.

FYIDid you know
If your ROI is low from retargeting, remember that some consumers use online ad blockers and third-party cookie blockers.

Examples 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 a brand has identified you as a potentially interested user and remarketed 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.”

Similarly, search retargeting focuses on bringing previous, non-converting website visitors back to a brand’s page to drive conversions.

Retargeting vs. remarketing

The term “retargeting” is often used interchangeably with “remarketing.” However, there is a slight difference between the two. While retargeting and remarketing are intended to re-engage prospects who previously indicated an interest in a brand’s products or services, remarketing is typically reserved for the email channel. [Related article: The Best Email Marketing Services]

“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 are part of a strategy that brings previously engaged users back into the fold 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.”

How does retargeting complement other marketing strategies?

Retargeting complements every aspect of your broader digital marketing strategy because 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 odds that a user forgets about the initial engagement and never returns to your brand’s webpage are significant without 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. A common practice is to retarget customers who have abandoned an online shopping cart frequently. More specifically, there are common occurrences that lend themselves to retargeting.

The promotion of new products or services is the most obvious. When you roll out something new, you want to ensure loyal customers are aware. There are also times when you need to sell inventory.

Another scenario is with rebranding. Retargeting informs your customers of the changes to your brand and helps you find early adopters. Their interactions promote the new brand and help you improve visibility with targeted, efficient marketing.

An additional opportunity to use retargeting with consumers is right after a sale. Have you ever purchased online to be immediately greeted with additional offers or recommendations for related products? Those upsells can boost your overall revenue.

How to 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 advertisements are the most effective for your retargeting campaign, test two different versions of the same ad. After a brief trial period, review which version drove more engagement and consider widely deploying the more successful advertisement.
  • 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, consult the data and consider opportunities to improve it, whether that means altering the frequency with which ads are served to prospects or revising the CTAs in those ads.

A retargeting strategy is a sophisticated method of reengaging previously interested users, relying on data-driven insights and advanced tracking methods to boost conversion rates amongst a target audience. 

You get more bang for your buck if you focus on users who are already interested in (or at least curious about) your products and services. Done right, retargeting can help you boost conversions of all kinds easily and improve your overall ROI in your digital marketing strategy.

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

author image
Adam Uzialko, Senior Editor & Expert on Business Operations
Adam Uzialko, the accomplished senior editor at Business News Daily, brings a wealth of experience that extends beyond traditional writing and editing roles. With a robust background as co-founder and managing editor of a digital marketing venture, his insights are steeped in the practicalities of small business management. Since 2015, Adam has meticulously evaluated a myriad of small business solutions, from contact center platforms to email and text message marketing software. His approach is hands-on; he not only tests the products firsthand but also engages in user interviews and direct dialogues with the companies behind them. Specializing in digital marketing, Adam's expertise spans content strategy, editorial direction and adept team management, ensuring that his work resonates with entrepreneurs navigating the dynamic landscape of online commerce.
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