What are Retargeting Ads? Definition, Ad Types, Process, Benefits and Best Practices

What are Retargeting Ads?

Retargeting, also known as remarketing, is a form of online advertising which helps brands connect and engage with audiences who have visited them once or interacted with them in the past but did not really make a purchase. Simply put, when someone visits your site and leaves without much engagement or making a real purchase, you serve them your ads across the web so they finally click to return and convert.

Retargeting is considered effective because it specifically involves ad spends on audiences who are familiar with your brand and have recently demonstrated some level of interest. Therefore, it promises a relatively better ROI when compared to other digital marketing strategies that cover larger audiences who may or may not have been introduced to the brand.

It mostly leverages a cookie-based technology that involves a simple JavaScript code to follow your audience all over the web - also known as a pixel. Before we look at the process and types, let’s understand what is a retargeting pixel.

Retargeting Pixel: It is essentially a piece of code on the backend of websites that runs whenever a web page loads. Through this, a website can keep track of people who are visiting in order to help optimize advertising efforts for the future. There are multiple platforms that enable advertisers to retarget users. Some of those platforms are Facebook, LinkedIn, and Google, amongst others.

Let us now look into the details of how retargeting works.

Retargeting Process: How It Works

There are basically two ways you can approach retargeting - pixel-based and list-based. While pixel based retargeting is more common, instant, and effective, list-based retargeting requires more groundwork before you can actually get to it. Let’s find out how these two work.

Pixel-based retargeting: The steps to creating a retargeting plan using cookies or pixel, begin with a little technology tweak in your website backend. Here’s how it goes.

Step 1: You place a small code on the backend of your website, which is also known as a pixel. This code/pixel is unobtrusive and does not affect the website's performance in any way.

Step 2: Every time a new visitor comes to your website, the code drops an anonymous browser cookie (a piece of data that gets sent from your website and gets stored on the user's computer by the user's web browser while they are browsing) which helps you remember stateful information or to track and record the user's browsing activity.

Step 3: So when your cookied audiences browse the internet, the cookie automatically lets your retargeting provider/ digital marketing agency know when and where to serve them with your ads. This ensures that your advertisements are served to only those who have previously visited your website.

The cookies can be generic/ anonymous, or subscriber-specific and capable of detecting the stage of a user in the buying journey, to accordingly serve them the ads. The cookie detection and the consequent ad placement, can all happen in real-time.

For example, when a user visits your e-commerce website, it stores a cookie for them as a new visitor and serves them ads across the web, trying to generate their curiosity to visit your website again. Also, your system stores a cookie for each user who has purchased a product from you and detects this cookie, to serve them an ad about a returning customer discount.

List-based retargeting: List-based retargeting is possible when you already have an individual’s contact information. You can upload a list of email addresses for a retargeting campaign, usually on social media websites such as Facebook or Twitter, through which the platform will identify users on that network and serve them the retargeting ads.

This kind of retargeting isn’t that common, however, it has its own advantages. It allows you to set customizable criteria based on user behavior, for your ads as you can segment your lists and create different campaigns for each.

On the other hand, there is always a probability of email id mismatch between what’s in your system and what email id someone uses on a social media platform.

Benefits Of Retargeting

As a marketing method that allows you to re-engage with someone who’s already visited your website or has shown one level of interest through any single interaction with your brand, retargeting has many benefits. Here are some of the key benefits of retargeting that you should know.

Reach interested prospects:
While you do have a larger target audience to engage with, retargeting helps you narrow down and focus your efforts on reaching out to those who have already been introduced to your brand in some way or have shown one level of interest. Through retargeting methods in place, you can always be sure of not losing out on the warmer prospects.

Increase your brand awareness:
Through retargeting you not only try to convert more prospects into leads, but you also induce a better brand recall. By serving your ads across the web to people who’ve shown interest, retargeting lets you be more visible to those audiences, increasing your brand awareness, recall, and consequently, conversions. According to an IAB report, a survey of 1000 marketing professionals revealed that social engagement (62%) and driving sales (58%) are important goals of retargeting, but more than that 70% agreed that increasing brand awareness is the number one retargeting objective for both B2B and B2C brands.

Increase sales and profitability:
As is also evident from the survey results above, increased sales is one of the most important advantages of retargeting. Especially, with retargeting display ads, you can generate more leads and eventually more sales. One Criteo study also states that website visitors who are retargeted, are more likely to convert by 43%.

Improved RoI: Retargeting best practices promise a better RoI as compared to other advertising methods, as it is a cost-effective way of promotion that promises better returns. [1] [2] Another study[3]  claims that the average click-through rate for display ads is 0.07 percent, while the average click-through for retargeted ads is about 0.7 percent - 10 times higher than the usual display ads

7 Key Types Of Retargeting Ads

Here are some of the most popular and effective ones:

Account-based retargeting: This is an efficient B2B retargeting strategy for acquiring prospects or upselling to existing target accounts. It is ideal for capturing the interests of valuable accounts you want to acquire or continue doing business with. This is more of a list-based kind of retargeting. Some of the platforms that offer account-based retargeting service are Demandbase and LinkedIn.

Search-based retargeting: This is when users and audiences are retargeted based on keyword searches that they conduct on search engines like Bing, Yahoo and Google. It is one of the most effective strategies as it brings together your search engine marketing and display advertising. With the help of AdWords Retargeting, you can show a display advertisement to users after they have taken a specific action. This is a method of advertising that can be highly personalized and optimized to get the best possible ROI.

Site retargeting: It is the most common form of retargeting and involves the pixel based retargeting we’ve discussed earlier. As soon as a visitor comes in to your website, you can tag them and follow them around the internet with your messages. While doing so, identify what user actions are ‘tag-worthy’ and serve them your ads accordingly. For example, who may be reading a post on your blog may not be as ready to pitch for sales as someone who’s watching a demo video on your website.

SEM/ SEO retargeting: This is similar to site retargeting, the only difference being that it has more to do with the search terms a visitor used before clicking onto a link for arriving on your site. This provides you more insight about their intent which you can use to refine and accordingly design your retargeting messaging for them.

Contextual retargeting: This kind of retargeting involves an exchange of pixels between companies or websites that have complementary businesses, relevant to a searcher, such that both can target each other’s prospects. For example, an airline and local hotel site can target each other’s audience based on destinations that were searched or booked on either.

Facebook custom audiences: This kind of Facebook-powered retargeting allows you to upload a list of email addresses or phone numbers and Facebook will deliver your ad to those people when they're on Facebook. You can build this list from across audiences who visit your website or mobile app. Additionally, you can export leads, MQLs, SQLs, and so on, to develop a personalized message guiding them towards the next stage in the sales funnel.

5 Retargeting Best Practices With Examples

Now that you know all the benefits and types of retargeting, here are some time-tested best practices that will help you make the most of it.

• Segment your audiences

When you know who you’re targeting, you can customize your messages to suit their interests. This is what the audience segmentation does too. In retargeting, when you place different pixels on different pages of your site, you can identify the depth of engagement of each user and tailor your creatives accordingly.
For example, you may segment your audience basis:
Top-of-the-funnel (TOFU), those who visit pages where you’ve posted some general information rather than specific product detail;
Middle-of-the-funnel (MOFU), those who visit your product pages but need nurturing to reach the buying decision; and
Bottom-of-the-funnel (BOFU) those who visit your product related pages indicating they’re considering purchase (such as the pricing detail)

For those who fall in the TOFU category, you may serve ads with content such as an e-book that’s similar to the content they browsed, while those in the MOFU stage can be served case-studies or demo videos. Those at the BOFU stage can be offered a free demo video or consultation.

• Set-up frequency caps

If someone visits your website or app, briefly, once or twice doesn’t mean they’re ready to consider a purchase yet. If your ads follow them everywhere on the web, they may rather get turned off. Such overexposure may lead to a descent of the campaign’s performance. This is where setting up a frequency cap, helps run an effective retargeting campaign, otherwise you may risk falling in the trap of what’s commonly known as banner blindness (a phenomenon when prospects completely ignore your ads).

With a frequency cap you can limit the number of times a user sees your ads, preventing prospects from being crowded or feeling overwhelmed. Also, time your ads in terms of the buyer journey stage a user is in.

An example of a common frequency cap recommended by the display ads solution provider, Retargeter, is to serve 17-20 ads per user, per month. Another example is that say you set a frequency cap of 4 impressions every 24 hours. This means that your audience will only see your advertisement a maximum of four times every day.

• Rotate your ads and deploy A/B testing

When you serve the same ad to people for a long time, you again risk banner blindness and your campaign performance also notably reduces. A ReTargeter study revealed that clickthrough rates decrease by almost 50% after five months of running the same set of ads. To prevent this, apart from setting up frequency caps, you can also rotate or refresh your ad creatives every few days or weeks to keep attracting your audiences.

Additionally, A/B tests are a proven method to provide the data you need to decide on high-performing ads. Avoid random guesses about what will work and run these tests for deploying measurable, better performing campaigns. A/B testing your creatives helps you determine the best combination of ad copy, calls-to-action, and graphics.

Do include a burn pixel
While pixels are great at making your ads reappear in front of those who’ve just visited your platform, what about those who’ve just made a purchase and start seeing ads about the same item everywhere? That’s a bit annoying, isn’t it? This is where a burn pixel comes to the rescue.

A burn pixel is a small code that’s used on your thank you or checkout page to untag users who have made a purchase. This not only prevents you from annoying your buyers but saves you a lot on your efforts and budget for impressions.

This doesn’t mean these audiences are excluded from your retargeted campaigns. You can retarget them with new ads based on their purchase, showing them other similar or complementary items. Simply put, you exclude them from the base retargeting campaign and add them into a new one as per their buyer journey stage. This way you can up-sell and cross-sell to the set of audience that has already been converted once.

Opt for a single provider for retargeting
With multiple retargeting providers, you run a few risks that may burn a hole in your budget while you will still be left worrying about overall campaign performance. When you have more than one service provider, each one of them will be bidding for the same ad spaces on the same websites, which will shoot up your media costs while decreasing the chances each has to serve ads to your users. Moreover, you will also find it complicated to implement standard frequency caps, as each of your vendors will be operating in their own way.

This is why it is better to have a single retargeting provider who can execute your entire campaign with a focused approach. Even if you’re new to it and still testing waters with different providers, you may do it in with one provider at a time over a few months time, before you decide on one. This way you’ll be able to get a better sense of which ones actually performed better without having to compare skewed results.

Well, now that you know all about retargeting, its types, benefits, process and best practices, we’ve got a bonus section for you! Here is a list of the top 7 retargeting platforms for you.

Top 3 Retargeting Tools and Platforms

Retargeting is one of the most staple forms of advertising that aims to capture the interest of  relevant audiences and hence there are many platforms and solutions out there now. Out of the many, here’s our recommended list of the top 7 retargeting tools and platforms for you.

: A whopping number of visitors that land on your website are not ready to buy. They come to your site, wander for a while, then leave. And what’s worse, most of them even forget about your website as soon as they leave. So, how do you engage with them? Facebook Retargeting ads is a great way to do that as most of us are now regular users of the platform.

It is quite easy to set up, and there is a good chance you’ll find and be able to attract most of your target audience there. Plus, Facebook offers wonderful features to help you efficiently retarget and attract your prospects at the right time and in the right context.

LinkedIn: LinkedIn retargeting uses web technology to track people who have visited your website. In this manner, you can target them with ads as they continue to browse around on cyberspace. LinkedIn marketing is quite effective in the current scenario, especially for B2B companies that need to advertise to other business professionals. Some examples of businesses which may benefit from this type of retargeting are:

B2B services
Commercial HVAC and construction jobs
Financial services
Job ads

Twitter (Tailored Audiences):
With a simple retargeting mechanism, Twitter also allows you to do wonders with this form of advertising, just like its contemporaries, Facebook and LinkedIn. You can simply install a Twitter pixel onto your website which will collect the cookie IDs of visitors and then match them with the Twitter users to serve them your ads. It allows you to use its remarketing solution Tailored Audiences in three different ways:

• Lists: Using email addresses or Twitter usernames to target specific users
• Web: This focuses on the people who have visited your website and can be enabled through the use of Twitter’s website tag
• Mobile apps: This leverages the data collected from the user activity on your mobile app

Google AdWords: Google’s remarketing service Google AdWords is a great tool for retargeting ads. Through Google AdWords you can create lists of targeted people to whom your ads will be served across searches on Google and on the web. It is basically an advertising tool which emphasizes on a cost-per-click model of paying for ads. Usually, AdWords tracks data on the performance of ads and ad campaigns. This can provide you with valuable insights into your current campaign. Thus, it is known to have a great RoI. It offers the following types of remarketing opportunities:

Standard remarketing: This allows you to serve ads to previous website visitors as they browse on other websites.

Dynamic remarketing: This can help you tailor your content and serve ads that include the specific products or services visitors looked at, on your site.

Remarketing lists for search ads: When someone searches for a specific product or service that’s relevant to or same as your products/service, on Google, your ad will be displayed to them.

Video remarketing: This one displays your ads to people who have watched your YouTube videos or any other videos.

Customer list remarketing: Through this you can upload lists of contact details for Google, which enables it to serve them your ads whenever they use different Google products or platforms.