What is Retargeting?
You visited a website selling camping gear for your trip next month but did not end up buying any gear. When you open Instagram, you are surprised to see sponsored content from the same brand for the gears you wanted to buy.
How did this happen? This was your first-hand experience of retargeting in marketing.
As is evident, retargeting means to target again. It is a strategic marketing technique that targets customers who have either shown an interest in your products/services or products/ services similar to yours in the past.
But…
Why is Retargeting important?
Retargeting is a crucial method that businesses need to adopt because:
1. Retargeting increases Lead Conversion Rates:
Studies have shown that retargeting increases the likelihood of lead conversion by up to 70%. Retargeting keeps your business alive in the minds of the people who have already shown an interest in your product or service by visiting your website or engaging with your content. The repeated exposure to your products or services makes it more likely that these potential leads will convert into paying customers.
Retargeting has time and again proven to be effective in reducing cart abandonment rates by reminding customers about the items added in their cart and encouraging them to complete the purchase transaction.
2. Retargeting is Cost-Effective:
Since retargeting focuses on people who have already shown an interest in your products or services in the past it is more likely to give higher return on investments on your marketing expenses. Knowing the customer behaviour, it becomes easier to create tailor made advertising to suit their needs and quip their interest which in turn creates higher chances of converting these potential customers into paying customers.
3. Retargeting creates Brand Recognition:
Marketing psychology indicates that it is basic human nature to gravitate towards the familiar. Retargeting creates multiple touch points with the target audience that increases the chances of people remembering your brand and interacting with it in the future. Seeing your brand multiple times across different online platforms or websites reinforces your presence and creates brand recognition which improves chances of brand recall at the time of purchase.
4. Retargeting creates customer loyalty:
You can create customer loyalty by keeping your customers updated about your business through retargeting techniques like promotion activities, product news, blogs, articles about your business and customer feedback loops.
Successful companies like Apple are known for their marketing techniques which have been the driving force behind their popularity and customer loyalty. Making the customers the primary focus of your business enables trust building which in turn promotes customer loyalty.
This leads us to a crucial question…
Does your business need retargeting?
Without a doubt, the answer is a resounding YES!
For any lingering uncertainty, here are some situations for businesses where retargeting is very beneficial. If any of these are applicable to your business, then it would be a good idea to implement retargeting efforts.
1. Sales Cycle Length and high-ticket size:
Retargeting is highly effective for products and services with longer purchase cycles as it not only keeps your products or services fresh in the minds of the potential customers but also helps alleviate any customer concerns.
For Example: When purchasing high-cost products like automobiles the sale cycle might be very long as the customer may consider, re-consider and compare the price and benefits of competitors offering similar products. In products with long sales cycles trust goes a long way in achieving successful sales.
Here retargeting comes in handy as it repeatedly exposes the customer to your brand and helps you develop a relationship with the customer which in turn builds trust in the potential customer’s mind.
2. Advertising on a Budget:
If budgeted advertising is what you are looking for then retargeting is the way to go. Retargeting is a cost-effective form of advertising as it targets audiences who have previously interacted with your business and have shown an interest in your products or services and are thus more likely to convert into paying customers. Retargeting thus has a higher return on investment than advertising to a brand-new customer base who have no prior knowledge of the product or service.
3. Competition:
If you wish to stay relevant in highly competitive markets, retargeting will become necessary as it not only creates awareness about your products or services but also keeps your business on top of the minds of your potential customers.
In addition to this, retargeting also gives you the opportunity to target your competitors’ customers by engaging customers who have shown an interest in products/services similar to the ones being offered by your business.
Focusing on new customers while engaging existing customers and competitor audiences can help you stay ahead.
4. Creating Brand Awareness:
If your goal is to raise awareness for your brand, then retargeting is the optimal choice. In marketing, “visibility creates familiarity” – as consumers often gravitate towards companies they recognize. To establish brand awareness, you must make your presence known to your target audience, and not just on a single occasion. It’s essential to amplify the number of interactions with your audience to ensure they become acquainted with your brand and, perhaps, even remember it when the need arises. Retargeting empowers you to manage the frequency of interactions with your target audience, fostering brand recognition and recall.
Retargeting is a valuable addition to your marketing strategy if it aligns with your business goals, target audience and resources.
How can you get started with Retargeting?
Having established the need for retargeting in your business you can ensure effective execution of your retargeting efforts by following the steps mentioned below:
1. Define Objectives:
The very first step is to determine your retargeting goals – are you looking to increase sales, generate leads, boost brand awareness, or achieve some other specific objective? Having a clear objective will help you in formulating a strategy best suited to meet your end goals.
For Example:
If your service has a long sales cycle, then your objective can be to warm up casual browsers to interested potential customers.
On the other hand, your objective could be to increase lead conversion by reducing the number of abandoned carts.
2. Identify & Segment Target Customers :
Personalized retargeting has proven to give better results and by understanding your target audience you can create audience segments and create retargeting campaigns based on the behaviour and needs of the different customer segments.
For Example:
A business can use retarget advertising to focus on retargeting people who simply browsed the website or/and to target people who abandoned their cart. The retargeting approach in both these scenarios will be different.
For website visitors- retargeting ads that provide a free trial period to try the services may encourage customers to use the service which may induce future purchase.
For cart abandoners- retargeting ads in the form of abandoned cart emails offering discounts on the cart items are more likely to convert into sales.
3. Choose Right Platform:
Depending on the nature of your product/ service and the segment of your target audience you can choose to run your retargeting campaign on different platforms that correspond aptly.
For example:
For brands like Nike, retargeting on platforms like Instagram can be more effective than LinkedIn because of the kind of audience it is looking to target.
Similarly, project management tools like Atlassian can garner better results by running its retargeting advertising campaigns on platforms like LinkedIn.
A simplified diagrammatic representation of how Facebook retargeting works
4. Choose data collection method:
Retargeting can be done in different ways keeping in mind the requirements of your business and data collection set up.
The two primary ways of Retargeting are:
- List-based retargeting
- Pixel-based retargeting
a. List-based Retargeting:
List-based retargeting is best suited for your businesses if you already have a database of potential customer information. List-based retargeting will allow you to customize your ads and choose who is on the list and who is not.
You can simply upload the email list to a retargeting campaign on the selected platform and the platform will identify users on that network with corresponding emails in the list provided by the business and display the retargeting ads exclusively to them.
b. Pixel-based Retargeting:
Pixel-based retargeting uses cookies to retarget website visitors by placing a pixel (a piece of JavaScript) in their browser. This cookie keeps a track of the web surfing activities of the user and notifies the retargeting platforms of the ads to be displayed to the user based on their behaviour. This method is more suitable if you desire automation in the retargeting process.
5. Create retargeting Ads:
To ensure the success of your retargeting campaign you must design ads that are best suited to the target customers’ needs and behaviour. Target based advertising is likely to get a better response than generic advertising.
For Example:
Ads like the one above is likely to get better response as they are centered around the customer’s existing need.
Ads like the one below can be used to generate buzz about your product in the market but may not be very helpful in achieving sales directly.
6. Launch and Monitor your Campaign:
Once you have completed the above steps you can launch your campaign to the target audience and monitor its performance by analyzing key performance indicators like click-through rates (CTR), conversion rates, return on ad spend (ROAS), etc. Doing this will help you understand what is working and what is not, thus assisting in deciding whether your campaign needs to be altered or adjusted.
Caution: Things to keep in mind while Retargeting
Though retargeting is the go-to strategy for businesses today, to ensure the success of your retargeting endeavors you must keep in mind the following points:
1. Avoid over-advertising:
Though retargeting advertising is beneficial for businesses it must be kept in mind that too much of anything is bad! When strategizing your retargeting campaign ensure that you do not overwhelm your audience with too many retargeting ads. Limit the ad exposure of your target audience by setting frequency caps that limit how often the same user sees your ads.
2. Adhere to Privacy Regulations:
When executing a retargeting campaign ensure compliance with relevant data privacy regulations and be transparent about your data collection practices to operate within the applicable legal framework.
3. Seek Expert Advice:
If your business is new to retargeting, you can choose to seek advice from marketing experts with experience in retargeting to formulate your retargeting strategy and utilize their feedback to create the retargeting campaign best suited to your business.
Conclusion
Retargeting is all about creating a relationship with your existing and potential customers. It is about knowing your customers and their behaviour and using the information to personalize your ads to nudge them towards buying from you.
In a nutshell retargeting advertising is about moving from Awareness to Acquisition.
What are your thoughts about Retargeting advertising?
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