Retargeting

Retargeting is an online marketing tool used to attract users who have previously visited a website and performed specific target actions, such as placing an order or subscribing to a newsletter. The advertising system (retargeting provider) analyzes user behavior, predicts their next actions, and based on this, offers them new products or services. This type of advertising is highly targeted and effective because it targets an already loyal audience. 

Retargeting tools are offered by all popular platforms that sell paid advertising, such as Yandex.Direct, Google AdWords, VKontakte, MyTarget, as well as teaser and banner advertising services (for example, Admitad and MarketGid).

Problems solved with retargeting

The main goal of retargeting is to engage with an already loyal audience who has interacted with a company’s website, mobile app, or product or service in some way. A classic example is users who selected products, added them to their shopping cart, but did not complete the order. Retargeting allows you to:

• Offer additional products or services. For example, if a customer purchased a bicycle, they might be interested in additional parts and accessories: brakes, brake cables, lights, reflectors, etc.
• offer new products or services, thereby involving him in a new purchasing cycle;
• Remind users of your brand and increase its awareness. For example, if someone purchased a specific product on your website a long time ago and then hasn’t visited for a while, retargeting allows you to re-engage them and encourage them to make further purchases.

In other words, retargeting is a type of “catch-up” advertising aimed at returning a user who has stopped at any stage of the sales funnel, or stimulating them to make additional purchases.

How does retargeting work?

For the average user, retargeting looks like repeated advertisements that are displayed in search results, on social networks, on websites connected to search engine advertising networks (AN), on thematic resources, and in mobile applications.

To set up retargeting on a website, its owner needs to register with one of the advertising networks and obtain a special code (pixel). Once installed on the website, it adds an anonymous cookie to the browser of every user who visits the resource and adds the visitor’s information to the retargeting list. When the same user visits any other website connected to the ad network selected by the owner of the promoted resource, they will be served the corresponding ad. Retargeting ads will end in two cases:

• the customer disables the display of advertisements or suspends funding for the campaign (in this case, this will happen automatically);
• The user clears the browser cache and cookies or starts using a different browser or device.

It’s easier to understand how retargeting advertising works with a concrete example. Let’s say a user visits an online home goods store and purchases a garden lantern/candle holder. They later visit another website, such as a news site, but one that’s connected to the online store owner’s ad network. In this case, the user will see ads for other garden candle holders, related products (candles), or any other product selected by the advertiser. 

Retargeting advertising involves several parties:

• advertiser – a company that promotes its Internet resource and pays for advertisements;
• an advertising network offering retargeting advertising services;
• advertising platform – a website connected to the PC on which advertisements are displayed;
• Retargeting audience – users who have previously visited the promoted website and/or are consumers of the advertised product/service. 

Like other types of online advertising (contextual, targeted, premium), retargeting begins immediately after the advertising campaign is developed and paid for by the advertiser. It ends when the client either cancels the campaign or terminates its funding. In this respect, retargeting differs radically from SEO, the effects of which become apparent some time after the campaign begins but continue long after it’s completed. 

Types of retargeting

There are many types of retargeting, but the following classification is most commonly used.

• Behavioral. In this case, the advertising campaign is based on user behavior on the website. There are also variations here, for example, criteria such as an uncompleted order, the history of visited pages, their viewing depth, etc. 
• Search. This is somewhat similar to the previous method, with the difference that the ads are triggered by user search queries in a browser. Search retargeting is activated as soon as a potential customer enters the desired keyword, regardless of whether the user has visited the target website. 
• Personalized. It’s based on specific target audience parameters, such as gender, age, location, etc. In this sense, retargeting is very similar to targeting or contextual advertising.
• Social. In this case, ads are displayed based on the user’s social actions: likes, comments, reposts, etc. Therefore, this type of retargeting is primarily used on social networks. 

Another classification divides retargeting into classic and dynamic based on the mechanism for generating and displaying advertisements.

• In the first case, static ads are created in advance and then shown to any user who visits the target website. Classic retargeting is more general and targets all visitors, regardless of their interest in the company’s products. 
• Dynamic retargeting uses specialized algorithms to generate ads based on user actions, such as viewing specific products in a catalog, placing an order, reading blog posts, and so on. This type of advertising is more personalized and targeted at the most relevant audience, making it more effective at increasing conversions than traditional retargeting. 

Retargeting is also classified by the format of advertising messages (text, video, graphic, etc.), the platforms on which they are displayed (for example, news sites, online stores, social networks), and other characteristics.

Remarketing and retargeting: similarities and differences

Both terms refer to the same type of online advertising. However, they are not synonymous, although their definitions often vary depending on usage. For example, some marketers refer to Yandex. Direct advertising, such as retargeting and Google Ads, as remarketing. Others use “remarketing” to refer to all marketing channels and customer retention tools, including offline, television, and so on, while using the term “retargeting” only for similar methods in online advertising. 

Benefits of retargeting

Recapturing a hot audience. Retargeting targets users who are clearly interested in the advertised product. They’ve either already purchased it or something similar from the company, or they wanted to buy but for some reason changed their mind, or couldn’t. Perhaps the cancellation was due to purely mundane reasons, such as wanting to wait until payday or experiencing a power outage while placing an order. In this case, there’s a good chance an ad shown a few days later will encourage them to revisit their purchase and make it.

Increase conversion with minimal costs. Setting up a new advertising campaign from scratch typically requires a complete strategy development, finding effective messaging channels, and so on. All of this takes time and considerable resources, and the results may not necessarily meet expectations. Retargeting can be set up in just a few hours using the built-in tools provided by advertising networks. Moreover, its effectiveness is highly likely to be high, as it targets an already loyal, “warm” audience. 

Segmenting your target audience. Retargeting ad campaign settings allow you to precisely define the parameters of the users to whom your message will be addressed. You can segment your audience by gender, age, geographic location, and many other criteria. This makes your advertising messages more targeted and, therefore, more effective. 

Benefits compared to other advertising methods. Retargeting is more effective than contextual and targeted advertising. This is because retargeting works with a highly “warmed” audience, which only needs a nudge toward a decision that’s already been made. Conversion and targeting, however, also involve targeting “cold” customers who fit the chosen segmentation. 

Brand recognition. A user who has made a purchase once may not remember the name of the manufacturer or the online store where they placed the order. Repeated advertising of the same product or website helps customers remember it better and, consequently, become more loyal. However, a careful balance must be struck between reminding customers and being too pushy, which could turn them off. 

Disadvantages of retargeting

Stalking advertising. Retargeting is often aimed at re-showing a product to a customer who has viewed it but hasn’t yet purchased it. If this happens for objective reasons (not enough money, internet outage, etc.), the customer usually responds positively to such advertising. However, it also happens that the customer placed an order at the same store in person, or deliberately abandoned the purchase after finding a similar or better product at another online store with better terms, or even changed their mind about purchasing it altogether. In such cases, re-showing the ad will be seen as intrusive and will create a negative reputation for the product or brand. 

Subjective feeling of being watched. Many users complain that advertisers and ad networks monitor their online behavior. This perception is actually not far from the truth: the cookie downloaded to a visitor’s browser, although anonymous, still tracks their actions. While no confidential information (name, phone number, address, etc.) is collected, many users are wary of any infringement on their privacy. Ultimately, this can lead to a strong negative attitude toward retargeting in general and toward a specific brand and/or ad network in particular. To mitigate this negative impact, some advertising agencies include a “Why am I seeing this?” link in their ads. Clicking it provides a detailed explanation.

When to use retargeting and who it is suitable for

Many online marketers, including experienced ones, see retargeting as a universal tool, a kind of “magic wand” that will quickly attract eager customers, make them extremely loyal, and significantly increase sales. In practice, however, things are a bit more complicated. 

For example, some products and services simply aren’t suitable for re-advertising—this includes key cutting, locksmithing, taxi services, and so on. Customers seeking these services have likely already solved their problem elsewhere and don’t need to visit the target site to do so. Re-advertising them simply doesn’t make sense. 

Retargeting is most suitable for online stores. This is obvious, as people are constantly buying things, especially products that are used regularly or perishable. It also makes sense to use this tool to advertise products that complement the main product, such as parts, accessories, and consumables for bicycles and cars. This also includes services that either complement the main product or prolong its effectiveness.

In other words, for retargeting to be truly effective, several conditions must be met:

• The audience should be “hot,” but not “overheated,” that is, they should experience a strong need to purchase a product or service, but not so strong that they decide to order it at any cost here and now;
• It’s best to start serving ads some time after the user has completed a targeted action. This will help account for possible reasons that led the user to abandon the order, such as waiting for their paycheck. Displaying ads too quickly can create a sense of intrusion, which will likely turn them off the brand.
• Retargeting goals must be clearly defined—they are used to select an audience, compose a message (or select it from suggested templates), etc. 

Properly configured retargeting is a truly effective advertising tool that can significantly increase conversions, bring users back to your website, and enhance your brand’s uniqueness. However, it’s most effective when combined with other types of online advertising (targeted ads, contextual advertising, email marketing, etc.), as well as SEO.