What Exactly is Ad Retargeting? How does it Exactly Work?

The results were fantastic! The company’s Average Order Value (AOV) increased by 13%, Cost Per Acquisition (CPA) reduced by 34% and Return on Investment (ROI) was 1300%.

That’s what ad retargeting can do for you. If you want to get started on ad retargeting for your business, here is your handy guide to it.

What is Retargeting?

Retargeting is a digital advertising strategy that helps you to make the bounced traffic return after they leave your website and encourage them to make a purchase. The bounced traffic comprises visitors who browsed your website but left without completing a transaction. Perhaps they just wanted to compare prices and features, postponed their purchase to a future date or something else (for example, phone call, meeting, power outage) interrupted their transaction – the reasons for abandoning the online shopping cart could be many.

Retargeting ads enable you to push your product and services to these customers again and increase the chances of conversion.

Are Retargeting and Remarketing Same?

Both retargeting and remarketing are used interchangeably, but their purpose is similar. Retargeting generally uses cookies to drop ads while remarketing uses emails. Read further below for a detailed explanation.

What are the Benefits of Retargeting?

Retargeting has become a favourite of organizations and digital marketers for a host of benefits it offers:

Re-engage Customers:

Statistics indicate that Statistics show that only 2% of web traffic gets converted in the first visit. Obviously, when visitors quit your site without buying, they have lost interest, and your conversion chances are very low. However, retargeting can re-engage the visitors by following their digital footprint and displaying your ads. This kind of advertising serves as a kind reminder to finalize the purchase.

Boost Sales:

If only 2% of customers buy your product on the first visit, you have a staggering 98% to target! If even a slight percentage of customers return to your website and buy something after retargeting, it can uplift your revenues considerably.

Capture Interest with Personalization:

Let’s say, Mr X browses through various brands of laptops on your website and drops an HP laptop in the shopping cart, only to abandon it. Now, you can advertise the same HP laptop on every web page or social media site that Mr X visits. Wouldn’t he be happy to get such highly personalized ads? Customers are likely to respond faster to personalized ads. Did you know that retargeting ads are 76% more likely to be clicked on than a regular old display ad?

Saves Time and Efforts:

Retargeting needs only a one-time configuration which doesn’t take much time either. Once it is done, the entire process is automated. The anonymous following of the visitors and display ads begin as soon as they leave the site. Your marketing efforts and time are reduced drastically!

Lower Cost of Customer Acquisition:

Retargeting can reach out to several potential customers at a time at a much lower cost. So, your cost of acquisition per customer goes down, thereby positively affecting the ROI.

Enhance Brand Awareness:

When your ads pop up frequently on every web page that customers visit, it positions your brand in their minds. They may not immediately buy your product, but most likely your brand will be the one they will think first about when they do.

Understand Metrics:

Retargeting provides you with various analytics and metrics that can be useful to understand customer behaviour. So, next time you launch a retargeting campaign, you can incorporate these insights to maximize the results.

How Does Retargeting Work?

Retargeting ads work in a very methodological way. There are basically two types of retargeting ads you can consider:

Pixel-based:

It relies on cookie-based technology that deploys a simple Javascript code known as a pixel to track and follow your website visitors anonymously on the web. So, after the visitors leave your website, it will target them with personalized product offers by displaying ad banners on other websites or social media platforms they visit. When a visitor clicks on these retargeting ads, they will be directed to your website.

List-based:

This type of retargeting is used through email campaigns. This is also known as remarketing as we had mentioned above. Here, you select the site (for example, Facebook or Twitter) where you want to create retargeting ad campaign and then upload a list of email addresses of contacts whom you want to target.
The pixel-based is the more common type of ad retargeting because it helps you follow the visitors the moment they leave your website. However, when you want to target a highly specific group or a number of customers, then list-based retargeting can be used.

What are the Basics of Retargeting?

Retargeting is immensely beneficial to convert customers. However, it requires a proper strategy. Here are some basic tips you need to keep in mind to maximize the effectiveness of ad retargeting campaigns:

• Create multiple groups of the target If your website is selling several products in various sub-categories from different brands, not every customer will buy the same product. Hence, you can create a specialized list for each target segment, perhaps product wise, demographic wise or interest wise. This will make your retargeting strategy more focused.