Retargeting ads: how to bring back potential customers
Only a small fraction of e-commerce website visits lead to a transaction—just 3.3% in 2024, according to Smart Insights. The other 96.7% of website visitors leave your site without making a purchase. Investing in retargeting ads gives you a second chance to win over those potential customers.
With retargeting ads, you can follow website visitors around the internet and remind them of your products or services. Depending on the advertising platforms you use, retargeting ads can display in search engines, in the margins of other websites, and on social media pages. Every time your ad shows up, it helps build brand awareness and encourages the potential customer to follow through on a purchase.
Learn how to use retargeting ads to reach people who’ve shown an interest in your brand and turn one-time website visitors into repeat customers.
What are retargeting ads?
Retargeting ads are ads that display your products or services to previous website visitors as they browse the internet. These ads help you connect with potential customers who have interacted with your brand but haven’t made a purchase yet.
If you picture your digital marketing strategy as a funnel, retargeting ads are toward the middle, trying to draw potential customers closer to making a purchase. Here’s how they fit into the bigger marketing picture.
- Top of the funnel: Targeted ad campaigns attract potential customers and introduce people to your brand. These ads typically display for people in your target audience who haven’t interacted with your brand yet.
- Middle of the funnel: Retargeting ads reach out to warm leads—potential customers who’ve already shown an interest in your brand. They show up for people who have taken certain actions, like visiting your website or social media profile or joining your email list.
- Bottom of the funnel: Remarketing campaigns re-engage existing customers to build loyalty. Remarketing often happens through email marketing campaigns, where you can send personalized reminders or special offers to people on your remarketing list.
How retargeting works
There are two types of retargeting ads: pixel based and list based. Here’s how they both work, plus the benefits and drawbacks of each.
Pixel-based retargeting
A pixel-based setup allows you to display ads retargeting your previous website visitors. The first step is adding a line of Javascript code to all of your website pages, including your homepage, landing pages, and product pages. When someone visits one of these pages, a tracking pixel is placed in their browser, allowing an advertising platform to find that user on other websites and show ads to them.
The advertising platform you use will provide the Javascript code to add to your site. If you use multiple advertising platforms—like Google Ads, Facebook Ads, or LinkedIn Ads—you’ll need to insert a different line of Javascript code for each platform.
Setting up pixel-based advertising can be a bit time-consuming, especially if you have a lot of web pages. But once it’s set up, the advertising platform does the work for you, using automation to display ads based on your website visitor’s behavior.
For example, an advertising platform might show ads for specific products based on the product pages a customer visited, or it might show ads to build brand awareness after a person visits your site for the first time.
Another benefit of pixel-based retargeting is that your ads start displaying immediately after someone’s first visit to your site, which allows you to connect with potential customers while your brand is still fresh in their minds.
List-based retargeting
List-based retargeting operates off the existing email addresses in your customer relationship management (CRM) system. After you upload your email list, an advertising platform matches the email addresses in your list to the email addresses attached to accounts on their platform and targets those users.
Let’s say you sign up to display retargeting ads on a social media platform like Instagram, which retains the email addresses of all its users from sign-up. First, you upload your email list to Meta Ads Manager, and then Meta displays ads to anyone with a matching email address.
With list-based retargeting, you’ll reach an audience that’s more invested in your brand—they’ve not only visited your website, but they’ve also shared their email address with you. You can also segment your retargeting list into custom audiences based on demographic data (like age, race, gender, and income level) or psychographic data (like hobbies and interests) to make retargeting ads feel personalized to each user.
The downside is this retargeting strategy requires more maintenance since you’ll have to update your retargeting list as your email list grows. Another drawback to consider is that list-based retargeting isn’t as fast-acting as pixel-based retargeting. People won’t see your ads until you update your list, and you also won’t have access to data showing which products or web pages they browsed on your site.
4 benefits of retargeting ads
Retargeting ads typically have a higher click-through rate (CTR) than traditional display ads since they help convert customers that likely have a higher intent to buy. However, both types of ads play a role in your overall digital marketing strategy. Traditional display ads introduce your brand to new potential customers, while retargeting ads help move potential customers down the sales funnel.
If you’re looking for a high return on investment, retargeting ads are a good candidate since they’re highly customizable for your target audience and your budget. Below are four ways retargeting ads can benefit your business.
1. Create more touchpoints with potential customers
There’s an old marketing truism that says it takes eight touchpoints before a potential customer is willing to make a purchase. However, recent research suggests it can actually take anywhere from one to 50 touchpoints to convert a customer.
Every time your retargeting ads display, that’s one more touchpoint to help you build brand awareness and move a potential customer closer to making a purchase. Some advertising platforms also allow you to sequence your ads, which means showing a series of retargeting ads designed to lead customers down the funnel.
2. Reach custom audiences
Retargeting ads are highly customizable, allowing you to reach specific audiences based on their search behavior. You can display ads based on the products people viewed on your site or create different messaging based on demographic and psychographic data.
For example, if your target audience includes both Millenials and Gen-X customers, you can write different ads based on the generation’s different values and purchasing behaviors. This makes it easy to give potential customers a personalized experience and ensures you’re displaying the right message for the right audience.
3. Reduce shopping cart abandonment
Many people add products to their shopping cart on an ecommerce site but never complete their purchase. According to Statista, the global shopping cart abandonment rate is 70.19%. That’s a lot of potential revenue being lost.
With retargeting ads, you can remind shoppers of the products they left behind. Pixel-based retargeting allows you to display ads based on the specific product pages users viewed, which encourages them to return to their shopping cart and complete their purchase.
4. Control your ad spend
Every business has a different marketing budget. Retargeting ad platforms allow you to set a custom budget for your ad spend. Once you hit your monthly budget, the platform will stop displaying your ads until the following month.
Many retargeting ads are also charged on a cost-per-click basis, meaning you only pay when someone clicks on your ad. This makes retargeting ads a budget-friendly marketing tactic for small businesses.
Where can you buy retargeting ads?
There are many retargeting advertising platforms to choose from. To find the right one for your business, think about where your ideal customers go online: Are they active on social media, or would you find them on search engines? Below are some of the most popular platforms to consider.
- Meta Ads Manager: Meta, the parent company of Facebook and Instagram, offers retargeting ads that show up as users browse their social media feeds. Since Instagram and Facebook are part of the same company, Meta Ads allow your ad to reach two of the most popular social media platforms at once.
- Yelp Ads: When you sign up for Yelp Ads, your business page will get prominent placement on Yelp and will continue to reach users when they’re searching off Yelp through retargeting. After someone searches on Yelp, they might see a Yelp ad related to that search term when they’re on another website later that day. For example, if someone searched for “plumbing”, they could see a Yelp ad for a plumber when they are browsing a different website like The Washington Post later.
- Google Ads: Google allows you to buy retargeting ads that show up on search engine results pages, as well as the Google Display Network, a network of independently owned websites that have signed up to display Google Ads on their site (typically in a sidebar, banner ads, or pop-up ad).
- Other social media platforms, including X (formerly Twitter), TikTok, and LinkedIn, also offer retargeting ads. Make sure to consider your target audience—for example, LinkedIn might be a good fit for a B2B business, while TikTok is ideal for younger brands.
Most advertising platforms, like Meta Ads or Google Ads, have built-in tools to help you manage your retargeting campaign at no additional cost. But if you want to use multiple platforms to display retargeting ads, you can make the process easier by investing in retargeting ad software like SharpSpring Ads or AdRoll. These programs help you manage and distribute your ads to multiple platforms from one place.
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6 steps to creating an effective retargeting campaign
Now that you understand how retargeting works and where you can display ads, follow these six steps to create your first retargeting campaign.
1. Set up tracking pixels
Tracking pixels give crucial information about user behavior and allow you to create more relevant ads, ultimately leading to a better return on investment. They also go to work as soon as website visitors leave your site, which keeps your brand top of mind.
While tracking pixels take some time to set up, your chosen advertising platform will walk you through the process and help you troubleshoot if needed.
2. Create dynamic retargeting ads
Dynamic ads automatically update in real time to match an individual’s interests or browsing behavior. Let’s say you created an ad for potential customers who abandoned their shopping carts that says, “Did you leave something behind?” A dynamic ad allows you to show each user the specific items they left in their shopping cart.
Dynamic ads can also change based on user demographics. For example, if you have some products that are more popular with your Gen-Z shoppers and others that are popular with your Millennials, the ad can show the items that best match the user’s age range.
3. Use audience segmentation
Many retargeting platforms allow you to segment your audience and create personalized ads that fit with each user’s demographics and interests.
For example, imagine you’re an athleisure business with a target audience of women ages 25 to 65 with an average annual income of at least $30,000 and an interest in fitness. Here’s how you might segment and target each group:
- Age: Your 25- to 30-year-old customers likely buy different products than your customers who are 50 and older. Create personalized ads based on their fitness goals and needs.
- Income: Customers who make $30,000-$50,000 may be more likely to purchase less expensive, entry-level products, while customers who make $80,000+ may buy your higher-end line.
- Interest: Perhaps some of your customers prefer yoga while others prefer running. Use this information to show them the most relevant gear.
4. Write engaging ad copy
Once you’ve identified your audience segments, write personalized copy for each of them. Make sure your copy includes a clear call-to-action (CTA) that asks the user to take a next step. For example, the athleisure business above might use a CTA that says “Find your zen” for yoga lovers and “Hit the pavement” for runners.
Keep your copy short and sweet since most online ads have limited space.
5. Maintain a high frequency
Retargeting works best when potential customers see your ads often. Try running your retargeting ads several times a week for at least 90 days. This will allow you to build brand awareness over time.
But remember, there is such a thing as oversaturation. Some marketers suggest limiting the number of retargeted ads a customer sees to 20 a month to avoid fatiguing potential customers.
6. Track performance metrics
Once your retargeting campaign is up and running, consistently measure your results and make adjustments as you go. Key metrics to track include your impressions (the number of times your ad was shown), click-through rate (CTRs), and conversions (when a user takes a desired action in response to an ad).
Compare these metrics across audience segments and platforms. You might discover that your messaging resonates with one segment but not another, or if you’re using multiple advertising platforms, you may find that some platforms are more effective for reaching your target audience than others.
Above all, don’t be afraid to experiment. Every campaign is an opportunity to learn more about what your audience wants and what resonates with them.
If at first you don’t succeed, target again
Very few website visitors become paying customers on their first visit. Retargeting ads allow you to stay connected with people who’ve shown an interest in your brand but haven’t made a purchase yet. With each retargeting ad you display, you’ll build brand awareness and come one step closer to converting potential customers into paying customers.
Because of their high CTRs and excellent personalization options, retargeting ads are an essential component of any digital marketing strategy—but they’re just one of the many options for online advertising. Learn more about digital media advertising so you can craft a strategy that works for you.