What retargeting is and how it works

Understanding what retargeting is and how this marketing tool works allows you to effectively increase conversion rates. In fact, you have to “catch up” with users who have previously interacted with the brand, but did not perform a targeted action. The result of this approach is an increase in the likelihood of making a purchase/ordering a service through personalised advertising. In this article we will take a closer look at how retargeting works, its advantages and ways to measure its effectiveness. 

What is retargeting 

Retargeting is a marketing tactic based on showing ads repeatedly to users who have already visited your website or social media page. In simple terms, it allows you to convert users who did not become customers during the first interaction.

Retargeting adverts attract the user’s attention – they encourage them to visit the site and perform an action: make a purchase, sign up for a trial lesson, etc. 

Suppose a potential customer used Google search to find products from the category “children’s toys”. He browsed through the products on the website of the online shop, but did not make a purchase. The company can retargeting models that attracted attention based on this activity to ensure the user returns. While browsing through stories on Instagram the user will stumble upon adverts from the same shop. The campaign is organised as information about previously viewed children’s toys.

How retargeting works and why it’s important 

Retargeting uses tracking pixels (Google calls them tags) to collect information about website visitors, users interacting with social media pages. When a user visits a web resource, a pixel is placed in their browser. The task of the tag is to recognise the user when visiting other internet platforms. Your adverts will be shown on these sites. 

Important clarification: tracking pixels do not collect personal data of visitors – names or addresses. Tags capture the user’s IP address. Retargeting adverts will be targeted to it. Additionally, the pixels track the user’s actions:

• page views;
• clicks;
• form submissions;
• video views;
• downloads;
• moving items to the basket;
• purchases.

If the company concerned has the appropriate reporting tools, tags determine whether a user has made a purchase or conversion. The information can be useful for ongoing campaigns, as well as for selling add-ons and creating targeted advertising based on previous purchases. 

Statistics help to understand the importance and value of retargeting. Marketing research is conducted not only by world-renowned organisations (Nielsen, Forrester, McKinsey, IAB), but also by small agencies. Data collected and analysed by ZipDo shows that:

• retargeting ads are 76% more likely to be clicked than regular ads;
• retargeting can increase the conversion rate up to 147%;
• CTR for these ads is approximately 0.7%;
• retargeting can increase brand awareness by up to 77%.

Retargeting advertising reduces basket abandonment by up to 26% and can increase ROI by 150-200%. 

Types of retargeting

There are different types of retargeting – with their help it is possible to improve the company’s performance:

• Search – based on the analysis of keywords used by the user. When a user enters a combination that repeats a particular keyword into a query, he or she will see the corresponding advert without visiting the site.
• Social – uses information from social networks. The user sees adverts selected on the basis of his likes, reposts and other actions. 
• After visiting the site – the user receives a cookie. The task of the tracking file is to inform about the activity of the user. Subsequently, the visitor sees adverts on different sites according to his interests. 
• Dynamic – personalised retargeting, where advertisements are automatically generated. It is oriented to a specific user to show previously viewed products.

Retargeting helps bring back potential customers. Incentivises those who have shown interest in the company but have not made a purchase to take action. Catch up with customers who have ordered a product or service to offer a related product. 

Retargeting tools and performance measurement 

There are quite a few useful tools for successful retargeting. Examples of the most popular ones:

• advertising banners – on web resources, in social networks, search results;
• mailings – trigger mailings for email, web push, sms.

It is important to identify which channel the audience prefers. After that, keep users’ attention with the right communication. For example, build a chain of messages that remind about actions and events (product in the basket – order not placed, letter in the mail – information not viewed). 

When choosing retargeting to increase conversion, it is important to measure its effectiveness. Analytical work allows you to evaluate the success of actions and in time to rebuild the advertising campaign if necessary. Two indicators are needed to evaluate the effectiveness of retargeting:

• Conversion from clicks (CTC). Control of directed user actions after clicking on a banner. 
• Conversion by impressions (VTC). User’s actions after a banner is shown to him.

In order to evaluate the effectiveness of retargeting, it is necessary to compare it with other types of attraction. Two metrics are used to analyse the effectiveness of retargeting: the average customer’s cheque and the long-term profit per customer (taking into account several purchases made). 

Advantages of retargeting campaigns

Retargeting allows you to reach potential customers who are already familiar with the brand. There are several advantages to running advertising campaigns:

• Increased economic efficiency. The greater return than from advertising without retargeting is explained simply: the work is carried out with a warmed-up audience – there is no need to start from scratch. An example is an offer to buy a familiar product at a discount. 
• Improving brand memorability. Repeated contact with the CA is a great way to unobtrusively remind about the company and its interesting offers.
• Promotion of new/popular products. Users who have already shown interest in the brand are more likely to make a purchase again. The main thing is to properly present the novelty or top-selling items.

Retargeting advertising allows you to tailor messages based on where the user is at in their journey. A more relevant and personalised campaign increases the chances of a targeted action. 

Recommendations for launching a retargeting campaign

Successful retargeting is key to increasing revenue and scaling your business. A few recommendations will help in launching a campaign:

1. Segment your audience. It is important not only to define goals, but also to create separate campaigns for different segments (added a product to the basket, bought a product, etc.). 
2. Generate relevant adverts. Adopt dynamic retargeting, use individual creatives. 
3. Set up and optimise the campaign. Important: the right goal, tracking statistics, optimising your budget according to your goals, determining the best time to show your ads.

In an effort to increase conversion rates with modern marketing tools, it’s important not to confuse targeting and retargeting. There is a significant difference between them. Targeting is aimed at selecting the target audience by filters (gender, age, social status, etc.). Retargeting performs a more complex task – it allows you to select users who have already shown interest in the business or product, even without making a target action. The importance of the tool is that showing personalised content to “warm” customers increases the chances of conversion. 

Retargeting allows advertising to be shown to those people who have shown interest in a product or service. However, it can only be effective with a professional approach. Art-Marks offers strategy combined with aesthetics. We provide services for launching and setting up, optimising retargeting, providing audits to assess the effectiveness of campaigns. With this approach, advertising budgets provide maximum return with a guaranteed increase in conversions. 

Literature used: 

1. Digital marketing. A guide for professionals. [Electronic resource]./Ryan Dice, Russ Hennebery//-2-e-2020-319 pp. 
2. Digital Marketing for Dummies. /Ryan Deiss, Russ Henneberry//-John Wiley and Sons Ltd-2022-368 p. 
3. Web Analytics 2.0./Avinash Kaushik// -1st-Sybex-2009- pp. 396-420