What is Retargeting and How Does It Work?

What is Retargeting and How Does It Work

All of us have had the experience of visiting a website, leaving without purchasing anything, and then seeing ads from that same website following us around the Internet for days afterward.

You’ve probably seen those ads on other websites for products you’ve already looked at on Amazon. Or maybe you’ve been shopping around for a new car, and suddenly you see car ads all over the Internet. That’s retargeting at work!

Simply, it’s a marketing strategy used by businesses of all sizes to bring customers back to their websites with laser-focused precision. Let’s take a more in-depth look at how retargeting works and some of its benefits to your business.

What is Retargeting?

Starting off with the basics, retargeting is a form of online advertising that allows businesses to keep their products and services in front of bounced traffic after they leave their website. Retargeting ads are placed on other websites that potential customers are visiting in the hopes that they’ll remember your product and come back to purchase it.

Retargeting Ads On Website
Image source: To Do Canada

For example, if you run an e-commerce store that sells shoes, you can retarget visitors to your website who didn’t purchase anything with ads featuring the exact same shoes they were looking at on your site. And since you already have their attention, there’s a good chance they’ll be persuaded to come back and buy them!

What’s the Difference Between Retargeting and Remarketing?

You might have also heard the term “remarketing” before. And while retargeting and remarketing are similar, there’s a slight difference between the two. Retargeting is a broader term that describes any type of targeted ads shown to potential customers after they leave a website.

On the other hand, remarketing is a specific type of retargeting done via email, and it’s geared towards past customers. So, if someone has already made a purchase from your store in the past, you would use remarketing to target them with ads in an effort to get them to come back and buy again.

For example, suppose someone abandons their shopping cart on your e-commerce store. In that case, you might send them a remarketing email a few days later reminding them about the items they were interested in and offering a discount to encourage them to complete their purchase.

How Does Retargeting Work?

Mainly, retargeting uses cookies to track users’ web activity so that businesses can serve them targeted ads based on their interests.

For retargeting to work, you need to place a piece of code called a pixel on your website, and when someone visits your site, the pixel drops an anonymous cookie into their browser. This code is invisible to website visitors and doesn’t collect any personally identifiable information. It also doesn’t affect their experience on your website in any way.

The cookie then follows the user around the web. When they visit a site that’s part of the retargeting network, the advertiser is able to serve them an ad based on their previous interactions with the original website.

How Does Retargeting Work

So let’s say you have a furniture store, and you’ve placed a retargeting pixel on your website. A potential customer visits your site and looks at a particular couch but doesn’t purchase it. The retargeting pixel will then drop a cookie in their browser, and as they continue to browse the web, they’ll start to see ads for that same couch on other websites they visit.

What Are the Benefits of Retargeting?

Retargeting can be an extremely effective marketing strategy, and it offers many advantages. Here are some of the top benefits that retargeting can offer your business.

Reach Customers Who Have Already Expressed Interest

One of the most significant advantages of retargeting is that it allows you to reach customers who have already expressed interest in your product or service. This is because they’ve visited your website and are familiar with your brand. So when they see your ad on another website, they’re more likely to remember your business and be interested in what you’re offering.

Retargeting Benefits
Source: ReadyCloud

That’s opposed to other marketing methods, such as display advertising, where you’re targeting potential customers who might have never heard of your business before. With retargeting, you already have their attention, which makes it more likely that they’ll convert into a paying customer.

Think of it as the difference between cold calling and getting a referral from a friend. When you get a referral, the person you’re talking to is already interested in what you have to say because they trust the person who gave them your name. That’s the same principle at work with retargeting.

Increase Top-of-Mind Awareness

Another big benefit of retargeting is that it can help increase top-of-mind awareness of your brand. When potential customers see your ads multiple times, it helps keep your business at the forefront of their minds, making them more likely to think of you when they’re ready to make a purchase.

Yes, they may not be ready to buy right away, but you’re planting a seed in their mind each time they see your ad. And when they’re finally ready to make a purchase, there’s a good chance they’ll think of your business first.

Gain Valuable Insights

Retargeting also provides valuable insights into your customer base and their journey. For example, you can use retargeting to track how many times a potential customer sees your ad before purchasing. If you find that most people need to see your ad seven or eight times before they’re ready to buy, you can adjust your budget and frequency accordingly.

By keeping an eye on your metrics, you can learn a lot about your customers and what motivates them to make a purchase. This valuable information can then be used to improve your marketing strategy and get even better results in the future.

Save Money

This is a bit of a counterintuitive benefit, but it isn’t. Because retargeting is so effective, it can actually save you money in the long run.

Think about it this way: if you’re only targeting cold leads, you’ll need to spend a lot more money to get them interested in your product or service. But with retargeting, you’re only targeting people who have already shown an interest in what you offer. So even though you’re spending more money on advertising, you’re actually getting a higher return on investment (ROI).

In other words, retargeting may cost you more per conversion, but you’ll end up converting more leads into paying customers. And that means more sales and revenue for your business.

It’s a Continuous Work in Progress

The best part about retargeting is that it’s a continuous work in progress. It’s highly unlikely that it’ll lose its effectiveness anytime soon. In fact, it’s likely to become even more effective as technology improves and more businesses start using it.

​​For example, imagine being able to target people based on their search history or the items they have in their shopping cart. The possibilities are endless, and the potential for increased sales is huge.

That means you’re tapping into a powerful marketing tool that will continue to produce results for your business for years to come. So the earlier you start using retargeting, the better.

You’ll Outsmart Your Competition

By using retargeting, you’re outsmarting your competition. Not many businesses are using retargeting yet, which gives you a big advantage.

Retargeting Ads
Source: OptinMonster

By being one of the first to use this powerful marketing tool, you’ll be able to get ahead of your competition and win more customers. And yes, customers do notice when they’re being retargeted. In fact, they actually appreciate it because, sometimes, life gets busy, and they need a little reminder about that product or service they were interested in.

Make More Sales

Finally, retargeting can help you make more sales. When potential customers see your ad multiple times, they’re more likely to click on it and buy what you’re selling. In fact, more than 26% of people who are retargeted end up coming back and making a purchase.

Pre-purchase Behavior
Source: SeoSamba

That’s a pretty significant increase in sales, and it’s one of the main reasons businesses use retargeting in the first place. If you’re not using retargeting, you’re missing out on many potential sales.

Setup Your First Retargeting Campaign Now!

Now that you know all about retargeting and how it works, it’s time to set up your first campaign. And as you navigate the retargeting landscape, remember that there’s always room for improvement, and retargeting is an ongoing process – it’s not a “set it and forget it” type of marketing strategy.

You can always fine-tune your campaigns and test different strategies to see what works best for your business, so continuously optimize your retargeting efforts to get the most out of this powerful marketing tool.

And if you have any questions about retargeting, contact our team at ShiftWeb, and we’ll be happy to help you get started.

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Reem Abouemera

Reem is a marketing copywriter at ShiftWeb. Her passion is scrutinizing the intersection of marketing and psychology to support businesses in putting their best foot forward online. With more than 5 years of experience in writing both content and copy about online marketing topics under her belt, she understands the intricacies of the field and the challenges businesses face when it comes to standing out in today's digital landscape. When she's not writing, you can usually find her reading, binge-watching movies, or spending time with family and friends.

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