What Is Retargeting in Marketing? Definition, Benefits, and Types

Retargeting boosts conversion rates and optimizes campaign budgets. In this blog post, we’ll answer the question, “What is retargeting in marketing?” and explain how you can use it to optimize your digital marketing efforts.

Learn the different types of retargeting, how the process works, and best practices for success. 

Retargeting Definition

Retargeting is a marketing strategy that targets customers who have previously interacted with a brand at some point. The customer could have visited the brand’s website, used their app, or engaged with them on social media.

Retargeting tracks these customers, collecting data on their behavior, clicking patterns, and purchase history, and enables marketers to send retargeting ads to them.

Rather than showing people the same ad that made them visit your site, you deliver new ads designed to nudge them to finish a transaction by leveraging their online behavior.

The Concept of Retargeting

Retargeting campaigns (also known as remarketing campaigns) can recapture certain audiences. Without a retargeting campaign, many of the potential customers who interact with your website, app, or other brand elements could be lost in your sales funnel.

Not everyone converts from a social media ad or Google Ads campaign. Some industries have a longer sales funnel where the customer needs more time to decide.

With a retargeting ad, you ensure your brand is still on the web visitor’s mind and provide them with a simple means to return to your website or app and convert.

How Retargeting Works

In theory, this method sounds simple, but how does retargeting work?

Here’s a look at the options you have for retargeting campaigns:

• Tracking user behavior: Users can be tracked when interacting with your site or an ad. Sites and social media platforms use browser cookies to gather information on a user’s behavior, such as which pages they visited and how much time they spent on a site.
• Identifying potential customers: You can run campaigns to reach new people, and as they interact with your brand elements, they’ll be subsequently tracked. Retargeting marketing doesn’t just focus on the target audiences you already have.

Types of Retargeting

There are three types of retargeting campaigns you can run:

Pixel-Based Retargeting

Pixels are pieces of code that track information about user behavior.

With pixel-based retargeting, you can reach website visitors or app users across several advertising networks, such as the Google Display Network or social media platforms.

Pros

• You can deliver retargeting ads to anonymous users
• Ads can be delivered as soon as the user leaves your website
• Ad content can be tailored to specific user behaviors

Cons

• Needs a healthy website or app traffic to work

List-Based Retargeting

If you have a large mailing list, email marketing isn’t the only way to leverage it. You can upload your contacts into most PPC ad systems and create retargeting ads for your previous shoppers.

With list-based retargeting, you get to know your target audience better, so the ads could achieve higher conversion rates.

Pros

• Uses audiences that already know your brand
• Enables highly personalized retargeting campaigns
• Works for most major ad platforms

Cons

• Will not work without an extensive email list

Dynamic Retargeting

With Google dynamic remarketing, you can show website visitors ads for products and services they have already viewed on your site.

These types of Google ads are highly targeted and rely on your product feed to automatically create ads tailored to your audience’s needs and expectations.

Pros

• Once set up, the retargeting ads will trigger based on user behavior
• Helps maximize brand visibility
• Works best for e-commerce stores

Cons

• Advertisers have limited control over this retargeting strategy
• Google is in the driver’s seat

Benefits of Retargeting in Marketing

If retargeting works its magic, your brand can benefit from:

More Brand Awareness

A retargeting ad helps support your brand awareness goals, even if the specific role of these ads is to increase conversions. Such campaigns increase the exposure potential customers have to your products and services outside of the platforms you control.

A person can visit your site today and get highly targeted ads on their social media accounts just a few minutes later.

It helps keep your brand’s name in clear view and reinforces your brand message.

Increased Conversion Rates

The biggest benefit of retargeting marketing is that it provides higher conversion rates than any other marketing effort.

For example, luxury watch brand Watchfinder Clocks learned that just 1% of users purchased something on their first site visit. By creating 20 lists of visitors, the company delivered highly targeted ads that increased their conversion rates and achieved a 1,300% ROI. The average order value also increased by 13 percent.

The company looked at website visitors to identify those who clearly intended to purchase but didn’t on their first visit for whatever reason.

Cost-Effectiveness

Thanks to better-personalized ad content and the existing engagement between your brand and the target audience, ad retargeting can boost conversion rates at a fraction of the cost of other digital marketing.

Watchfinder Clocks achieved a 1,300% ROI with their retargeting efforts, and the average return can be around 600%, depending on how well the retargeted ad performs.

Best Practices for Retargeting

A good retargeting campaign doesn’t mean you’ll deliver users the same ad repeatedly and hope for conversion. It requires more planning.

Here are three crucial things to consider to make retargeting work:

Effective Time Frames

Retargeting is a long-term strategy. Give your campaigns time to reach your audiences and nudge them in the right direction.

You should run these ads for at least a month before pulling the plug. For some industries where the buyer’s journey is longer, retargeting can take months.

But the frequency of your ads matters a lot too. If you spam your potential clients with multiple search ads per day, they may choose to pull away from your business.

Ideally, you should not be showcasing your ads more than once a day. A retargeting platform will let you establish the frequency of your ad delivery.

Segmenting Your Audience

Your site visitors are not all alike. They come with different needs and expectations and have differing demographics.

Retargeting works best when the right ad is delivered to the right audience. You can take your retargeting list and break it down into multiple marketing segments to ensure your ad copy and visuals are tailored to a relevant section of your audience.

For instance, if 20% of your visitors have shown interest in a specific product, then the remarketing ad set featuring that product should only target that audience.

The remaining 80% may also be interested in the product — but not as much. Look at the data to identify other behaviors that can make your remarketing campaign more effective.

Cross-Platform Retargeting

Retargeting campaigns work best when you run them on multiple platforms. This ensures your brand gets enough exposure, no matter where a target customer is.

It also makes for a more comprehensive strategy. For example, you can run a social media retargeting campaign to keep your online store in the customer’s mind.

Even if the user doesn’t convert from the social media ads, they will still maintain higher levels of awareness regarding what your brand can offer.

Then, you can strategically deliver a display or search network ad when they showcase a clear intent to buy. You can target keywords or competing websites and show your ads at the exact moment when a user is ready to convert.

With this approach, you’re matching the ads to the sales funnel.

Retargeting Privacy and Regulation

Marketers today hold a lot of power when they use retargeting because these platforms allow them to tap into user data.

But this power has some strings attached:

Privacy Concerns

Since it requires the use of cookies and personal data, retargeting can infringe on the personal privacy of customers.

All the tracked data is stored in one place and even shared with third parties (like digital marketing platforms) to enable advertising efforts.

Marketers must go to great lengths to ensure the data they gather is protected. First, any leak or disclosure of information could lead to negative PR for the brand, which can cause loss of consumer trust.

But it’s also a matter of abiding by the law.

In the EU, GDPR lays out all the data privacy laws for member states. While the U.S. has no federal equivalent, some states, such as California, have adopted online privacy laws.

It’s your responsibility as the advertiser or brand owner to ensure your retargeting campaigns don’t infringe on the customer’s right to privacy or the laws that regulate it.

Meeting Regulatory Requirements

You have two items on your to-do list to meet the expectations of user privacy and relevant laws:

Obtain User Consent

First, your customers must agree to let you track their behavior and share this data with third parties.

For websites, you’ll need a detailed privacy policy that describes what information you track, if your site uses cookies, and what you will do with any user data you gather.

If you’re building an email retargeting list, inform people that signing up for your newsletter also means signing up for retargeting campaigns and other marketing efforts.

Ensure Ethical Retargeting

Trying to cheat the system to get faster results will hurt your brand in the long run.

Some “black hat” remarketing tactics to avoid include:

• Buying remarketing lists from other websites
• Spamming users with frequent ads, no matter if they expressed interest in a product
• Hiding your privacy policy or making it difficult to understand
• Creating “opt-out” processes, such as email unsubscribing, that are impossible to complete
• Creating a fake landing page that is not relevant to your brand just to get contacts for email marketing, retargeting, etc.

Final Thoughts

When done right, retargeting is a vital tool that can allow any business to meet its bottom line.

Without it, you’re leaving your conversion rates to chance. With all the efforts you put into driving traffic to your site, remarketing helps ensure more of these new users turn into loyal customers.

All businesses should use retargeting, no matter their size or the industry they operate in. Consider launching a remarketing campaign and seeing your conversion rate flourish.