What Is Retargeting In Digital Marketing? How Does It Work?

What Is Retargeting In Digital Marketing? How Does It Work?

Retargeting is a tool for businesses to re-engage the visitors who can become customers. It helps boost conversion rates and improve sales for businesses.

By: Ayesha Khan | 7 mins read
Published: Sep 15, 2021 1:13:13 PM | Updated: Jun 12, 2024 01:50:02 AM

There may be several visitors coming to your website daily. However, very few end up purchasing any products or services you offer. According to statistics, 97% of people who visit your website for the first time leave without buying anything. Retargeting campaigns remind your visitors of your products or services after they have left without purchasing. 

 

 

 According to statistics, 97% of people who visit your website for the first time leave without buying anything. Retargeting campaigns remind your visitors of your products or services after they have left without purchasing. 

Studies show that retargeting reduces the cart abandonment rate by 6.5%. It is a great tool for businesses to re-engage these visitors who have the potential to become customers. This can help boost conversion rates and improve sales for any business.

 Many marketers and advertisers leverage retargeting campaigns to remind visitors about the products or services that can be useful to them. 

In this article, we will discuss what retargeting is in digital marketing and how it can be useful to your business. 

What is Retargeting in Digital Marketing?

Retargeting reminds your potential customers about your products or services after they leave your website without purchasing. With retargeting you can show these visitors relevant ads when they visit other sites. Retargeting can be done with apps, search, and website banner ads. It is a great tool to re-engage customers who may have forgotten about your businesses and boost your sales.

There may be several visitors coming to your website daily. However, very few end up purchasing any products or services you offer.

Why is Retargeting Important?

In the competitive realm of digital marketing, where attention spans are short and options are abundant, businesses need innovative strategies to capture and convert potential customers.

Retargeting holds great importance for businesses aiming to maximize conversions. It is great for businesses who already have a traffic flow to their website. If a business has at least 100 visitors in a month, then investing in Google retargeting ads is a good option.

Let’s delve into the reasons why retargeting is a crucial tool in any digital marketing toolkit.

  • Capitalizing on intent

One of the standout benefits of retargeting is its ability to tap into user intent. When a user visits your website, browse products, or add items to their cart, they display a level of interest.

However various factors can interrupt their journey, leading to abandoned carts or uncompleted actions.

Retargeting allows you to re-engage these users at a point when they are more likely to convert. 

By delivering target ads to individuals who have already expressed interest, you are essentially presenting a reminder and an opportunity for them to pick up where they left off.

  • Higher conversion rates 

Retargeting focuses on a refined audience- those who have already shown an interest in your products or services.

This results in higher conversion rates, as retargeted ads are presented to a warm audience that is more likely to convert. 

Studies show that retargeted visitors are more likely to convert by up to 70% compared to non-retargeted ones.

  • Improved brand recall

Retargeting aids in building a strong brand identity and maintaining recall, by keeping your brand in the forefront of users’ minds.

Regular exposure to your brand's messages, visuals, and offerings reinforces your presence and establishes credibility.

When these users are ready to make a purchase decision, your brand is more likely to be their top choice due to the familiarity established through retargeting.

  • Customized user experience 

Retargeting allows for personalized messaging, which significantly enhances the user experience. By segmenting your audience based on their behaviors and interests you can deliver specific ads that resonate with their specific needs and preferences.

  • Efficient resource allocation 

Digital advertising can be resource intensive and businesses are often looking for ways to optimize their budgets. Retargeting offers a cost-effective solution by targeting users who are already familiar with your brand.

This targeted approach reduces wasted ad spend on users who might not be interested. As a result, your marketing budget is allocated more efficiently.

Unlocking the Mechanics of Retargeting: How Does it Work?

 Retargeting is an effective digital marketing technique that makes use of previous user interactions to boost conversions and engagement.

It keeps you top-of-mind and directs potential customers back to your website by contacting people who have already expressed interest in your goods or services

Here’s a guide to the mechanics of this technique.

  • Tracking User behavior

The first step in retargeting is to track user activity on your website or app. When a visitor visits your website, cookies, which are essentially small pieces of code, are often used to accomplish this. 

These cookies keep track of things like product clicks, cart additions, and page views. Additionally, you can track user behavior by using pixel tags, which are little pieces of code inserted into your website.

  • Building Audience segments

Once the user behavior is tracked, you can divide your audience into different groups based on it. You could, for instance, establish segments for users who left their shopping carts unattended, users who browsed particular product categories, or users who interacted with particular web content.

 You can use these segments to customize your retargeting campaigns to target users with particular interests and behaviors.

Learn how you can leverage Google Analytics 4  for geo-targeted advertising campaigns here. 

Download our complete Digital Experience Workbook to get more details.

  • Crafting Retargeting Ads

After segmenting the viewers, It's time to create customized ads that appeal to each category. Users should be reminded of their prior encounters with your company in these adverts, which should also nudge them towards taking the desired action, such as making a purchase, subscribing to a newsletter, or downloading a resource.

 Make sure the advertisements are visually appealing and include strong call-to-action (CTA) components to make them effective.

  • Selecting Ad placements

Depending on how much time your target demographic spends on various online channels, retargeting advertising can be shown there. Retargeting is frequently done on websites that are part of the Google Display Network, social media platforms like Facebook, and search engines like Google. 

Your adverts should be placed where they will be most likely to be seen by your target demographic.

  • Bid and Display

When setting up retargeting campaigns, You will place bids on ad spots and set budgets for each section. Real-time bidding is then used by your ad platform to choose which ad should be shown to a particular user based on the bid amount, ad relevance, and the user's behavior. 

The user sees the advertisement when they meet the requirements of a retargeting segment.

  • Continuous optimization

Through ongoing optimization, retargeting programs' effectiveness can be increased. Analyze important performance indicators regularly, including click-through rates (CTR), conversion rates, and return on advertising spend (ROAS).

 Utilize this information to improve your bidding strategy, target audience selection, and ad creativity. You can improve your campaigns' performance over time by iteratively fine-tuning them.

To know more about how campaigns’ performance  is improved over time, you can also have a glance at our blog  https://www.analyticodigital.com/blog/digital-marketing-statistics 

Exploring Different Types of Retargeting

Tag-based Retargeting

Retargeting uses cookie-based technology that uses JavaScript code to track visitors all over the Web. If you use Google ads, then you just need to add your retargeting code known as the tag or pixel to your website. This way your website visitors get added to retargeting audiences through browser cookies. 

This code can be customized for different pages when you segment your audiences based on their interests. For example, ecommerce businesses can create remarketing audiences based on any of their products. Then you will find out which users are looking for that specific product and create ads accordingly.

Google retargeting ads are shown to your website visitors when they browse the internet on various Google partner sites in the Google Display Network. Initially, with your first retargeting campaign, Google recommends targeting everyone who has been on your website.

 But this can increase costs and your ads won’t be targeted. However, when you create targeted campaigns as you go, you will be able to make them more relevant at a lower cost per click.

  • Social Media Retargeting

Social media retargeting uses audience data to show ads to users who have visited your website. This helps to get users' attention and them back to the website where they can convert or purchase from you.

Social media retargeting can be beneficial as many consumers use various social platforms. People like following their favorite brands on social media and many consumers purchase by clicking on ads.

 Most of the time consumers are going through social media posts and these platforms can be a great way to influence their behavior. Facebook retargeting ads can be used to reach a wide range of audiences on this platform. This platform collects user data and helps you target the leads you lost on your website. 

Businesses can make a lot of profit by reaching billions of people who actively use social media. Social media retargeting can be a part of your digital marketing efforts to help you engage with lost leads and influence them to become customers.

Now that you are familiar with retargeting you know all the various options that are available to leverage this strategy. You can retarget your customers or prospects through emails or track your website traffic and use targeted ad campaigns on Google or social media.

List-based Retargeting

List-based retargeting works when you have already added someone’s contact information to your database. In this type of campaign, you can use your existing list of contacts for certain retargeting ads. 

Upload a list of the email addresses to a retargeting campaign and the platform will identify these users with those email addresses and serve them the relevant ads.

A list-based retargeting campaign allows you to create highly targeted ads because you can select the contacts that are likely to re-purchase from your brand. However, these campaigns require some manual work as you must maintain the list and update it.

Hence, list-based retargeting is less automated and timely compared to tag-based retargeting.

  • Email Retargeting

Email retargeting is when you use insights you gained about your prospects, to send them personalized emails. This type of campaign is effective in reducing cart abandonment. If a customer has added items to the cart and left, you can send them emails to remind them of the products they liked.

Email retargeting can also be useful to upsell your products to existing customers. You can send them offers or updates to repurchase or upgrade any plans. These customers are likely to repurchase from you, especially if you send them a personalized email and offer them more value for their money.

The type of retargeting and platform you choose depends on what works for your business. You can use all these strategies at once or work with one at a time. Assess your business goals and budget to know what will work best for you

                                                                              Note To Remember

The type of retargeting and platform you choose depends on what works for your business. You can use all these strategies at once or work with one at a time.

 

Retargeting Vs Remarketing Campaigns; A comparative analysis of Two Dynamic Marketing strategies

Both retargeting and remarketing focus on achieving similar goals, however, with different approaches. The goals include:

  • Creating brand awareness and building long-term connections.
  • Targeting people already interested in a product
  • Re-engage audiences to boost sales.

The tactics used to achieve these goals are different. Retargeting primarily uses paid ads to target audiences who have been on your website or social media profiles. Whereas Remarketing uses email to target people who have already purchased from your brand.

Learn about smart targeting for digital advertising here. 

Aspect

Retargeting 

Remarketing

Definition

Displays ads to users who’ve interacted with your site/app but didn’t convert.

A comprehensive strategy to reconnect with potential customers through various channels.

scope 

Primarily online platforms.

Both online and offline touchpoints.

Channel Diversity

Digital channels like social media, Google Display Network, etc.

extends to digital channels (email, social media) and offline channels( phone calls, direct mail).

Personalization

highly personalized ads based on the user's previous interactions. 

Personalization levels can vary across channels. 

Target Audience 

users who’ve shown interest through website visits, clicka, etc.

encompasses users from various touch points including website, email, social media, etc.

 

Conclusion

Retargeting is a potent tool in the digital marketing arsenal, enabling businesses to reconnect with users who have shown interest in their offerings but haven’t yet taken the desired action.

By delivering targeted ads across various platforms, retargeting maximizes conversion rates and drives a higher return on investment.

 As the digital landscape continues to evolve, incorporating retargeting into your marketing strategy can be a game changer, helping you convert lost leads into loyal customers and driving sustainable business growth.

 

Is this helpful? Check out more interesting articles from our blog or you may also like:

https://www.analyticodigital.com/blog/digital-marketing-rfp

https://www.analyticodigital.com/blog/build-go-market-strategy