Nearly half of all revenue generated by ecommerce businesses comes from just 8% of its customers, says a research conducted by Adobe. This makes retargeting ads a precious tool to get repeat business.
Also, it takes multiple touchpoints to generate sales. According to Salesforce, people need 6-8 touches with a brand before buying a product. Retargeting is powerful because it allows a business to follow leads around the internet in order to get to this magic touchpoint number in the quickest way possible.
What Are Retargeting Ads?
Retargeting ads are defined by an engagement-based method of targeting. They are designed to selectively show up for users who’ve engaged with a company’s business.
Other types of ads use a different method of targeting. Search ads, for example, target users by keywords; display ads target users by websites. With the former, only users who search for one of your target keywords will see your ads. With the latter, only users who visit one of your target websites will see your ads.
Retargeting ads allow a business to target users based on the interactions they have with your business’s digital presence. An interaction can be something like visiting your ecommerce store, or a specific product page, or even watching a video on your business’s YouTube channel.
Why Should You Care About Retargeting?
Retargeting is a popular strategy because it reduces cart abandonment by 6.5% and increases web traffic by a whopping 700%. In fact, 27% of the retail industry uses retargeting ads.
Research by Invesp says that:
- 75% of online buyers pay attention to retargeting ads.
- Up to 26% of online buyers will click on a retargeting ad and revisit the website. The average click-through rate of retargeted ads is 0.7%.
- Using display ads for retargeting can lead to a 70% conversion rate.
Ways to Use Retargeting Ads
- Connecting with existing customers. These customers have already bought your product(s) and you might want to sell them more products. You should already have their data and can simply add their email address to your retargeting ad network.
- Connecting with browsers/visitors. These people haven’t bought from you yet, so you’ll retarget them based on browser cookies to promote products they’ve shown an interest in.
How to Create a Retargeting Ad
There are different platforms you can use for retargeting ads. But the two most popular are:
- Meta
The process usually looks something like this:
- Install a tracking pixel or code on your website.
- Go to your Facebook or Google ad account.
- Create an audience based on people who’ve viewed certain pages, or upload a list of customer/subscriber emails.
- Supply the creatives, or the images and text for the ads you want to show.
- Set your spending budgets.
- Press go.
The ad will then get pushed out to your audience(s) either on Google/Meta’s own platforms or their display networks depending on what you choose.
What Are Retargeting Ads Used For
Cross-Selling Products
A business can use retargeting ads to cross-sell products. You can cross-sell products to users who purchased a product as well as users who visited your store but didn’t purchase a product. Users who purchased amaryllis and fern leaves, for instance, may be interested in garden supplies; whereas users who visited a product page for non-GMO seeds may be interested in organic vegetable seeds.
Recovering Abandoned Carts
In addition to cross-selling, you can use retargeting ads to recover abandoned shopping carts. Not all shoppers who add a product to their cart will place an order. According to a study conducted by the Baymard Institute, the average cart abandonment rate is 70.19% in 2023.
With retargeting ads, you can target users who abandoned their cart to attract them back to your store. For this, you’ll need to create a custom audience consisting of users who viewed the shopping cart page but didn’t view the order confirmation page. (Viewing the order confirmation page means the user has completed their order.)
Fostering Customer Loyalty
Retargeting ads are particularly effective in fostering customer loyalty. You can create ads to only show to users who’ve placed at least one order with your e-commerce business. In these retargeting ads, you can promote exclusive discounts to encourage users to come back and buy more. A higher level of customer loyalty will likely result in more sales for your business.
Connecting With YouTube Users
If your ecommerce business has a YouTube channel, you can use retargeting ads to connect with users who’ve visited it. YouTube-based targeting is available in Google Ads.
Users who visit your YouTube channel may be interested in your products. Some users, however, may only visit your channel and not your store. With YouTube retargeting ads, you can point them in the direction of your ecommerce store.
How Is Retargeting Different from Remarketing?
These terms are used interchangeably even though they are not technically the same. How are they different?
Retargeting uses online ad placement or display ads that target users who visited and interacted with your website with or without making a purchase. It happens because of the cookies installed in the browser, which track users’ actions such as entering the website, clicking on a product, or adding a product to the cart. Retargeting ads are placed by third parties like Facebook or Google Display Network. It is mostly about converting prospects into customers by triggering ads on third-party sites that your visitors visit.
Remarketing is more about re-engaging customers via emails. It provides an opportunity to upsell or cross-sell and ‘remind’ users to act based on their purchase history.
Different Types of Retargeting Ads
Let’s dive into the different types of retargeting ads.
- Display retargeting: This type of retargeting involves displaying image ads (aka Display Ads from the Google Display Network or GDN) to people who have visited a particular website.
- Search retargeting (or RLSA, remarketing lists for search ads): These are highly targeted ads using cookies or email lists to reach users who’ve engaged with a website before. For instance, if a user visits a store that sells nuts and later searches for a related term, like ‘sweet peanuts’, the advertiser can use RLSAs to bid more aggressively on that specific search term. This makes search ads more competitive by targeting high-intent audiences.
- Email retargeting: This method uses customer email lists to remarket to audiences who started shopping or checking out but didn’t checkout. You can also upload first-party user data people submit when they subscribe to your newsletter – they are likely to be brand loyalists.
- Social media retargeting: Social media platforms allow advertisers to retarget users based on social media activity, email lists, website visits, purchase history, and more. If a customer engaged with a brand’s social posts or visited their profile, they might see their ads while scrolling through their newsfeed.
- Dynamic remarketing: This dynamically generates ads based on the specific products or services a user shows interest in on your website or mobile app, then tailors the advertising experience to match their preferences. For instance, if a user recently viewed chocolate nuts, it’ll showcase the products they viewed, with messaging tailored to them.
Ecommerce Retargeting Best Practices
Here are a few best practices to keep in mind.
1. Create Relevant Messages
The internet is full of brands trying to grab consumers’ attention. So it is essential to create relevant messages to ensure that your ads perform well. Target your ad appropriately with relevant messages if you want to build trust with your customers. Irrelevant messages can pass off as spam. For example, if you sell products specifically for gifting, your retargeting ads should clearly mention that.
2. Segment Your Audience Correctly
Personalization goes a long way to ensure your messages are relevant. But personalizing each message can seem a daunting task without segmentation.
Segmentation lets you divide customers into multiple groups based on a common trait, such as their preferences, likes, and dislikes. This allows you to tailor your messages to those specific segments. Typically, you can segment your audience based on:
Demographics: Demographics include any profile data of your customers or subscribers, including gender, age, gender, location, and marital status.
Campaign engagement: Segment data based on how your contacts or customers engage with your online campaigns, such as digital ads or emails.
Shopping behavior: Use shopping behavior to segment customers no matter where they are in the buyer’s journey.
3. Focus on Different Ad Elements
Ecommerce retargeting ads have different components from the copy and call to action, to visuals. It’s critical to pay attention to these elements. The ad design must convey what you want to say and should include your brand logo.
Create a powerful call-to-action, which can potentially attract the customer and compel them to act, including ‘Get your 30% Discount’, ‘Shop Now’, and so on. Also, ensure that your offers are time-sensitive. It creates FOMO in your audience.
Then, finalize your ad by doing an A/B test. Create at least four different iterations, changing one element, be it visuals, CTA, or the copy, at a time.
Top Metrics to Measure
When running retargeting campaigns for your business, it is advisable to target specific metrics that will help gauge your success.
Conversion Rate
The average conversion rate in ecommerce is 2.5-3%. It is the baseline. Use it in your retargeting campaigns to see if there is an uptick in the number or if your ads need to be further optimized.
Abandon Cart Rate
If you have a high cart abandonment rate, then it makes sense to do retargeting campaigns. Retargeting ads can reduce cart abandonment by 6.5%.
ROI
See if the sales have increased after retargeting ads. Retargeting ads have multiple benefits, such as they help in increasing brand revenue and customer acquisition by 33% each, boosting website engagement by 16%, and growing brand awareness by 12%. So retargeting ads can improve the overall performance of your marketing efforts.
Time Spent on Page
Are your visitors only clicking your ads and bouncing off, or are they reading the content of your landing page? You may want to optimize the landing page content for higher conversions and lower bounce rates. Look for the time they spend on the page before either leaving your landing page or converting into customers.
Click-Through Rate
Retargeting ads have a higher click-through rate than traditional ads. The click-through rate is the number of people who clicked on your ad link and landed on your website. The CTR of retargeted ads is 10 times higher.
Conclusion
Ecommerce retargeting ads are a critical tool for the success of an online business. The best part of these ads is that you can engage with your customers when they’re not browsing your site or social accounts. Therefore retargeting ads are a simple but powerful push that’s non-invasive. And if your message is always relevant to the customer that sees them, you’ll be sure that your retargeting ad won’t feel like an ad at all.
Other Useful Resources
