How Retargeting Advertisements Can Grow Your Business

By David Oragui / 4 October 2018

A new survey by The Manifest found that only 43% of businesses invest in retargeting advertisements. While some avoid the practice because it can be seen as invasive and aggressive, retargeting ads can have significant benefits. This article will discuss best practices for retargeting advertisements and give good and bad examples.

Picture this: you go into a brick and mortar store and find the perfect pair of shoes. You place them in your cart, but as you’re walking to the cash register, you get an urgent call or text that makes you leave the store before you can complete the purchase.

In the real world, that is where the story ends. Your perfect shoes sit in your abandoned shopping cart, and you most likely forget about them.

But, what if the store had a way to track you and the shoes you almost purchased? What if, a few days later, you receive a flyer in the mail featuring those perfect shoes and offering you a 15% discount? Would you buy them?

You’d be more likely to remember how perfect the shoes were and eventually go back and buy them. 

Essentially, this is how retargeted ads work, except for online stores. Retargeting ads use what businesses know about their potential customers (when they visited your site, how long they stayed, what they looked at, how many times they’ve come back, whether they put something in their cart) to stay on the customers’ radars until they make a purchase. 

This article will show how retargeting advertisements can help your business, provide best practices, and give examples of the good, the bad, and the ugly retargeting ad strategies.

Why Your Business Should Use Retargeting Ads

Retargeting is a fairly straightforward, cookie-based practice. Every time a new visitor comes to your site, the code (referred to as a pixel) drops an anonymous browser cookie. Later, when your visitors browse the web, the cookie will let your retargeting provider know when to display your ads, ensuring that your content is visible only to people who have previously visited your site.

Retargeting ads explanation
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Retargeting is beneficial because conversion rates in the digital space are typically low. Very low, in fact. The average website converts only 2% of its traffic, and that’s only if the site does everything correctly.

That means that your e-commerce site is missing out on 98% of its traffic.

Retargeting is so effective because it focuses your advertising spending on people who are already familiar with your site and have demonstrated interest. That’s why most marketers who use it see a higher ROI than from most other digital channels.

The benefits of retargeting advertisements can be very robust:

  • Website visitors who are retargeted with display ads are 70% more likely to convert on your website.
  • The average click through rate (CTR) for display ads is 0.07%, while the average CTR for retargeting ads is 10 times higher at 0.7%.
  • 46% of search engine marketers believe retargeting is the most underused online marketing technology.

When used properly, retargeting can be an effective marketing tool that is actually useful to the consumer. You can’t let you retargeting advertising strategy become creepy, though.

The Intrusiveness of Retargeting Advertising

Retargeting advertisements have earned a bad reputation as most people only associate them with those annoying display ads that follow you around the internet for days after you visited a particular page.

Advertisers love retargeting ads because they mean you no longer have to find an audience through simply one publisher. Advertisers can instead chase audiences everywhere based on some signal of intent, independent of publishers.

Retargeting ads Waldo comic
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The problem is that ad stalking can be considered creepy—not just because the ads are persistent, but because they don’t take any context into account.

Research shows that consumers’ two main responses to retargeted ads were annoyance and anger. Based on the data, the more frequently an ad is displayed, the more aggravating it can be. 

If the same online ad is shown five times, it is seen as annoying and intrusive. By the tenth time someone sees that ad, they get angry. More impressions aren’t going to compel them because you’ve driven them off the proverbial cliff. 

That emotional response can have serious consequences:

Negative impact of repeated online ad views graph
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If you are retargeting, blindly increasing the number of impressions is a bad practice. Simply put, the higher the ad frequency, the greater the likelihood of evoking anger from the consumer. 

While showing too many impressions can turn users against you, not showing enough can render your retargeting campaign ineffective. The power of retargeting lies in its ability to keep your brand top of mind among users through continuous exposure.  If you only serve a few ads throughout the month, it won’t be sufficient to solidify brand awareness and cement brand recall. 

You must find a happy medium for your retargeted ads.

The challenges of retargeting ads can be overcome with some common sense best practices, though.

Effective Retargeting Ad Strategies

The secret to successful retargeting is making your approach less intrusive and repetitive. Focus on your ultimate goal, i.e., are you promoting the overall brand experience, pushing the marketing message, or highlighting the product itself? Then you can ensure that your customer will benefit from your retargeting ads.

The two main goals for retargeting campaigns are typically awareness or conversion, and your creative content should support that goal clearly. There are several best practices to follow when developing an effective retargeting ad strategy.

  • Segmentation

People visit a site for different reasons. Some want to make a purchase, others may simply like the site’s content, and there are probably a few who ended up on your site by complete accident. It doesn’t make sense to retarget the same message to these different visitors. By setting up different criteria (time on site, pages visited, demographics, or geographic location) or using different pixels on different pages of your site, you can segment your audience and create specific messaging that addresses the needs and interests of that particular segment. 

  • Burn Code

Nothing is quite so annoying to a customer as seeing a retargeting ad right after he/she just purchased what your company is advertising. This problem can be easily avoided by using a burn pixel or burn code as part of your retargeting ad strategy. For example, adding a burn pixel to the purchase confirmation page will allow you to exclude that customer from your retargeting efforts.

  • Creative Content

Strong creative can help you achieve your goal without pushing the customer over the edge. For example, you can add more value to a campaign when your banners are interactive or when your product image or information is dynamic. Take the following animation from UK banking firm NatWest:

NatWest animation

Be sure to focus on your ultimate goal and incorporate that into your design strategy. To convert a visitor to a customer, you need to ensure that the ads intelligently target the consumer while providing a positive ad experience that is designed to drive a sale, not just a click. 

Avoid ugly, ineffective content at all costs. 

LG ad

The above example of a retargeting ad is unlikely to provoke any type of consumer response. It is poorly designed, does not clearly feature the product, and does not compel the user to click, 

Your retargeting ad strategy should value quality over quantity.

Taking Retargeting Ads to the Next Level

If you want your retargeting ad campaigns to deliver tangible results, you need to truly understand your target audiences. Every potential customer is on a buyer journey, and every buyer journey is different. 

If you want your retargeting ads to lead potential customers to the point of purchase, you need to craft messages that match the customer’s mindset. There are a few tactics you can use to accomplish this: 

  • Resolve customer concerns.

Often, visitors aren’t ready to convert because they still have unanswered questions or concerns. Retargeting can be a great way to address those concerns if you can discern the reason behind the hesitation.

  • Simplify matters.

Another big reason why people aren’t ready to buy is because what you’re selling is just part of a bigger problem they need resolved. For example, if you buy a new phone, you also need to buy accessories. That’s a headache that can keep a visitor from converting.
Fortunately, retargeting is a great way to address those complications, especially if your site happens to sell all the solution(s).

  • Bring them back.

Remember when we mentioned that a burn pixel can be used for more than getting people out of your retargeting campaigns? Sales may be the ultimate goal of marketing, but the best marketing gets people to buy again (and again). Understand your buying cycle and use your burn code to pause a customer’s advertising for a period of time. If your ads are there when the customer is ready to buy again, you have a much better chance of up-selling or cross-selling to your customers.

Having a well-defined strategy relies upon deeply understanding retargeting throughout the entire customer lifecycle. Using retargeting as part of a broader digital strategy will lead to fewer gaps in your efforts to convert interested consumers.

Discover 5 reasons why small businesses should use PPC advertising.

Don’t Be Scared of Retargeting Advertising

The digital advertising space is constantly evolving. With this evolution comes the need for segmentation. Delivery of a compelling message to your unconverted site visitors is a beneficial tactic for increasing sales and maximizing your digital ROI.  The need to be smart with the messaging, and maintain your focus on the long term, is more important than ever. 

No matter how memorable or interesting your business, most people who visit your site are going to leave without signing up, buying, or contacting you. Retargeting ads keep your brand in front of visitors after they leave, giving you a second, third, or even fourth chance to bring them back to convert.

Retargeting can be incredibly effective for businesses that invest the time and effort to manage and optimize their ad campaigns. 

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