Retargeting 101

Uncategorized June 3rd, 2021

If you’re new to display or social advertising, especially direct response advertising, retargeting is a core strategy you should know about. While it can have a place in any media plan, retargeting can be a bountiful source of conversions and sales. That said, there are some key concepts that are often overlooked.

What is Retargeting?


At its most basic, retargeting (also known as remarketing) is showing an ad to users who have engaged with your brand in some way. To go into a bit more depth: Users are cookied (typically after visiting your site), then served ads for your brand with the goal of getting them to convert.

Why is it important? Well, most users who visit your site won’t convert: Only about 3% of new visitors will convert on their first visit. Returning visitors can make up as much as half of eCommerce transactions.

Here’s a simple illustration demonstrating retargeting:

How Do I Start?


First things first, you need to have the appropriate tracking code(s) on your site. If you’re using Google Analytics, you can push your conversion events and other audiences directly into Google Ads; you can also set up conversion tracking directly in Google Ads. If you’re using Facebook, you’ll have to install their pixel before you can create custom audiences (e.g. site visitors).

Once you have pixels implemented, your audiences created, and your conversion events set up, you’re ready to get your retargeting campaign setup! …Sort of…

Going Further


If you want a pretty basic retargeting campaign, you are all set once you have pixels implemented and audiences built. However, this is where many marketers go wrong. Sure, you can get conversions just by retargeting all your site visitors, but should you? How many of those users would have converted on their own? Does it make sense to show every visitor the same ad?

In almost every case, you should exclude past converters. How many or how far back you want to exclude will vary by product and brand. At minimum you should exclude recent converters: Most people can think of a time where they’ve purchased something, then saw ads for the same product later that day or the next day. Total waste, right? You already bought it; chances are you aren’t going to buy it again – at least not that soon. If your brand is one that has a very long purchase cycle or you only have a single conversion event, you may want to consider excluding all converters (e.g. upload a list of all your customers from your CRM platform and regularly update it).

Audience Segmentation


Depending on how many visitors your site gets, this may not apply to you: If your traffic supports it, you should partition visitors into different buckets. This will allow you to customize messaging, bids, and optimize better.

To give a simple example: If you are a clothing brand, you can create audiences for users who have viewed women’s apparel and a separate one for users who have viewed men’s apparel. If you have a lot of site traffic or certain products that get a lot of traffic, you might even be able to create audiences for specific products. This will allow you to highlight items the users looked at or may have seen while browsing. Just be sure to set up your exclusions to minimize audience overlap (e.g. exclude homepage visitors from your men’s category audience; exclude homepage visitors and men’s category from your product visitors audience).

For optimization purposes, you may find that some audiences perform better than others. This is true of all media, including retargeting. Someone who just visited your homepage may be less likely to convert than someone who visited multiple pages or made it to a certain section of your site. If possible, create an audience for users who have abandoned the conversion process partway through (e.g. added an item to their cart, but did not check out; started filling out a form, but did not submit it, etc.). With enough traffic and thought, your marketing efforts can reflect the full sales funnel.

Another consideration is segmenting your audiences by time. For example, you may find it beneficial to retarget users who visited in the last day, the last 7 days, the last 14 days, etc. Some of these audiences may work better than others. You may want to customize messaging for each (e.g. users who visited in the last day get a product ad; users who visited within the last 30 days get a discount code). Just as with page segmentation, make sure you exclude the narrower windows as you add new audiences.
A sample waterfall audience plan:

If Retargeting is so Great, Why Do I Need Anything Else?


One of the most common misconceptions of retargeting is that you can just continue pushing budget into retargeting. After all, if it’s so efficient, why would you run anything else? Why wouldn’t you just spend more of your budget on it?

Let’s tackle the second question first. To put it simply, you can’t just pump endless money into retargeting because you’ll annoy your users and waste your money. You should always keep an eye on your frequency (i.e. how many times on average users are seeing your ad within a given timeframe). Since you’re targeting a finite pool of users, there is a limit to the amount you can spend efficiently. If you push your budget higher than the pool allows, you’ll just end up hitting the same users over and over, thereby wasting impressions and spend.

The first question (Why run anything else?) is a bit more complicated, though the answer is related to some topics we’ve already discussed. As mentioned, your retargeting pools are finite, so you need to continually fill the pool via prospecting. Prospecting refers to the very top of the sales funnel (attention/awareness) and is key to driving conversions further down the funnel. If you don’t run any prospecting at all (i.e. driving new users to your site), that pool will eventually dry up.

Now that you have the full story on retargeting, here’s a quick checklist:

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