For online businesses, conversion rates are a matter of life and death. According to a recent article from Forbes, the average conversion rate is only 4%, which means that you will be losing out on converting 96% of your website’s visitors. Fortunately, there’s something you can do to pique the interest of those who’ve shown an interest in your products but did not make a purchasing decision: retargeting.
What is Retargeting in Advertising? How Does it Work?
An online shopper, let’s name him Roy, visits your site on his mobile phone. He views a few of your items but never adds anything to their cart or adds a few items and abandons the cart. Several days later, Roy is browsing from his laptop, and an ad for the products he had viewed along with closely related items pops up. He is reminded of your products, and he goes ahead to purchase. Running paid ads to previous website visitors at a fraction of the cost of a first-interaction ad is what retargeting is all about. It’s worth noting that Google refers to the process as remarketing. The following is taken directly from Google.
Remarketing is a way to connect with people who previously interacted with your website or mobile app. It allows you to strategically position your ads in front of these audiences as they browse Google or its partner websites, thus helping you increase your brand awareness or remind those audiences to make a purchase.
Retargeting is a cookie-based marketing technique that enables you to display ads to people who have recently viewed certain items on your website but never proceeded to buy. How retargeting works is based on the psychological principle referred to as the mere-exposure effect. This principle explains that a person is bound to have a positive response to a stimulus after repeated exposure to it.
Here’s how ad retargeting works: when a potential client visits your website, you place an unobtrusive code or pixel on their browser. This pixel or code is unnoticeable and will not affect your website’s performance. The code tracks the potential client’s online history and allows you to present relevant and related ads to them. When they proceed to buy from your site, they are taken off your target audience.
Retargeting is an ideal tool for encouraging leads that might be in your sales funnel but aren’t ready to buy until sometime in the future. However, keep in mind that the General Data Protection Regulation demands that your website visitors need to approve the placing of cookies on their browsers.
What Are Common Retargeting Methods?
The most common types of retargeting campaigns are:
- Pixel-based retargeting: this shows ads based on the potential client’s behavior on your site, which means that if you have no traffic to your website, you will have nobody to retarget.
- Social media retargeting: this is a type of pixel-based retargeting, but in this case, you use social media sites such as Facebook, Twitter, LinkedIn, Instagram, and Pinterest, among others.
- Search retargeting: as the name suggests, this type of retargeting enables you to display ads based on your potential clients’ search behavior and history. By displaying an ad to persons who searched for certain keywords or phrases, you have a better chance of gaining quality traffic.
- List-based retargeting: this a type of retargeting that focuses on people who are already in your mailing list.
- Email remarketing: though many use the term retargeting and remarketing interchangeably, when advertising across email platforms it is commonly referred to as the latter.
- Video retargeting: YouTube advertising is the main platform for accomplishing this.
How Does List-Based Retargeting Function?
List-based retargeting has the upper hand over pixel-based campaigns as you know your target audience. Thus, you can tailor the ads to match what they’ve bought before or have expressed an interest in. On the downside, you cannot be sure of the emails’ match rate because people often use varying email addresses. For the best results, you might want to consider using two or more retargeting methods along with other marketing techniques.
How Effective is Retargeting?
25% of Internet Users Don’t Mind Retargeted Ads
About a third of the people who visit your site intending to pay end up not doing it. When running a retargeting campaign, your audience is these people who are already familiar with your brand or even the products or services you offer. According to Digital Marketing Jobs, 25% of your potential customers do not mind being reminded of products or services they once pursued.
43% of the Retargeted Users are Likely to be Converted
According to recent research, 92% of your first-time website visitors are unlikely to buy. Rather, they are likely to glean for more content to enable them to make a decision. Running a retargeting campaign reminds them of your brand and/or products, which increases their chances of buying from you.
3 to 5 Users Notice and Consider an Ad From a Different Page
As technology evolves, internet users have found different ways of blocking display ads. Retargeting is a subtle way of reminding visitors of products or services they had shown an interest in.
Retargeted Ads Have a 10 Times Higher Click-Through Rate Compared to Typical Display Ads
Statistics show that the average CTR of a regular ad is 0.07%, which means that you will hardly get a response from a banner or an online display ad. On the other hand, retargeted ads have an average 0.7% conversion rate, according to Social Media Today.
How Quickly Can I Expect Conversions?
How to Assess Full-Funnel Success
Just like any other marketing campaign, you need to measure how effective your retargeting campaign is. For you to assess how effective your campaign is, you need to clearly formulate its objectives. Some of the ways you can do this include:
- Lead conversion: this refers to the number of leads you can attribute to your retargeted ads. A conversion happens when a potential lead undertakes an action that’s profitable to your business after interacting with the ad. Conversion can be quantified as making a purchase, filling in your contact form, calling your business, or downloading your ebook.
- Click-based conversions: click-thru-rate (CTR) is a ratio of the number of impressions your ad had or was clicked on to the number of times it was displayed. The higher the CTR, the more successful your ad is and vice versa.
- Increased brand visibility: retargeting allows you to put up ads in third-party websites as well as social media sites. Lots of potential clients are bound to come across your ad whether they click on it or not. While brand awareness is impossible to measure tangibly, you will likely notice an increased number of visitors to your website.
What Ways Can A Retargeting Campaign Be Improved?
Here are some surefire tips to improve your paid and retargeting efforts.
#1 Endorse More Than Your Products or Services
Most companies use retargeting campaigns to endorse their products or services to potential leads who visited their website. By doing so, they fail to leverage on such things as content marketing. You can redirect your website visitors to a case study, blog post, or downloadable e-book.
#2 Understand the Buyer Cycle
The buyer cycle is more or less like the sales funnel. In the beginning, a huge number of people are intrigued by your product or service, but very few will become buying clients. As you run the retargeting campaign, you will need to understand what works and what does not. Constantly displaying ads to the wrong audience could end up annoying your potential clients.
#3 Leverage on Audience Segmentation
The only way you can maximize engagement and boost lead conversions is by aligning your ads to your clients’ online behaviors. Segment your target audience into different segments based on their behavior, demographics, age, and so on. Doing this helps you create personalized ads. For instance, you might want to redirect a visitor who viewed your case studies and catalog to your consultation page.
#4 Test Your Ads
Once you’ve segmented your audience, you might want to test your ads by tweaking such aspects as the images, background, headline, ad copy, size, and call to action. It’s important that you let the ad run long enough to get the right statistics before ruling out on what works and what doesn’t.
#5 Be Sensitive to Your Pricing and Particularly, Shipping Costs
One of the primary reasons for cart abandonment on e-commerce sites is high shipping costs. In that case, promote such things as free shipping and discounts to get the attention of website visitors who abandoned their cart right after choosing the shipping option.
#6 Exploit What you Know About Your Target Audience
When running a retargeting campaign, you already know quite a lot about your audience. For example, what lead prompted them to fill a form or the landing pages or products they viewed. Use this information to craft customized ads for your target audience.
#7 Practice Ad Rotation
You need to keep your audience enchanted by practicing ad rotation. Swapping ads minimizes the chances of banner blindness and allows you to experiment with a new copy.
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In the past, retargeting and banner campaigns were used to generate new leads. However, marketers have realized that retargeting campaigns can provide additional benefits such as promoting brand awareness, increasing website traffic, nurturing existing customers, and supplementing other forms of marketing. If retargeting has not been part of your paid marketing budget, now’s the time to begin. If you are getting little or no results, re-evaluate your retargeting strategies and refine them using the above tips. Get a marketing evaluation today by clicking here to contact us.