12.14.20165 min read

What is Ad Retargeting and Why Should You Use It?

By Robert Vance

Let’s start off with a basic definition of retargeting. Retargeting is a process that allows you to display your ads to people that have visited your website or product page in the past.

For example, you go to Amazon and look at a pair of shoes or a set of golf clubs and then leave. You then go browsing around the internet and you see those same shoes or golf clubs on ads inside Facebook, on cnn.com, or other websites you visit. This is Amazon retargeting you for the product you looked at.

Why should you care about retargeting?

There are several reasons. The first is people usually do not buy on the first visit to your site.  Studies have shown that it can take as many as 12 interactions with your brand for someone to buy, especially if the price of the product is high. Retargeting gives you the ability to get extra brand “touches” with your prospective buyer and give them an opportunity to take action on your site.

Below are some other reasons to use retargeting.

  1. Retargeting gets better click-through rates and conversion percentages 

  2. People need several touch points prior to purchasing decisions 

  3. Ability to include and exclude groups of people from ads for better ad management 

  4. Ability to focus on a specific product or service 

  5. Retargeting is less expensive than other pay-per-click 
advertising 
 

According to CMO Magazine, “The average click-through rate for a display ad is .07 percent and the average click-through rate for a retargeted ad is .7 percent.” That is a pretty significant jump in click-through rates.

A quick case study on why you need retargeting

Here’s a recent case study. When I first started working with this company they were not using retargeting and were losing around $400 per day in ad spend. After working with them and implementing retargeting, they are now at a positive ROI and receiving free leads every day because the retargeting generates enough revenue for them to cover their advertising costs and still make a profit. The ROI on the retargeting campaigns they are running is between 488 percent and 2054 percent. That means for every dollar they spend on the retargeting ads they generate between $488 and $2,054 in revenue.

Example of ad retargeting ROI.png

Where to retarget

You can retarget on Facebook, Google’s display network, YouTube, and in Google search results. Ideally you would want to at least use Facebook and Google to give you the broadest reach and increase your chances of getting people to take action. The best would be if you could use all three platforms to do your retargeting to allow you the greatest reach and exposure. 

When you set up your retargeting you want to make sure that you can track people through your funnel until they purchase. That way, once they purchase, you can remove them from your retargeting and save on ad spend by not advertising to people that already purchased. You can also use your customer list to set up a retargeting list to exclude people that purchased in the past.

The other great thing about retargeting is that once you have them on a retargeting list you can use that list to upsell or cross sell to other products.

Some retargeting basics

On Facebook, you can retarget people for up to 180 days. On google and YouTube that can go as high as 540 days. Ideally you would want to retarget people for a period of time to allow for the completion of the sales cycle.

To set up retargeting you want to put the Facebook and Google retargeting pixels on every page of your website. This will allow you the most flexibility to create your retargeting lists. You want to create a list of people that take the following actions.

  1. Visit your website
  2. View your product page
  3. Add your product to the cart
  4. Purchase the product

This allows you to retarget people through your funnel and get them to take the next step. For instance, if someone visits your product page but does not add it to the cart, you can retarget to get them back to the page and add it to the cart. If someone adds something to the cart but does not purchase, you can retarget them to get them to complete the purchase. This allows you to fill the holes in your sales funnel and get more people from the top of your funnel into becoming your customer.

I hope you found this useful and leads you to start thinking of the ways you can use retargeting in your business to increase your sales. 

Robert Vance head shot.jpg

Robert Vance is a husband, father, and owner of NitroGo Marketing. He is an Infusionsoft Certified Partner, Digital Marketer Certified Partner, and Google certified Partner. He helps businesses automate their marketing and get a positive ROI from their marketing efforts and makes sure they can track their ad spend and ROI. Robert Vance created his first website in 1997 and has been marketing online since 2003.

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