Retargeting (Advertising) - Explained
What is Retargeting?
Written by Jason Gordon
Updated at January 5th, 2022
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Table of Contents
What is Retargeting?How is Retargeting or Remarking Used?Retargeting works in the following way Difference between retargeting and remarketing Types of Retargeting Digital Retargeting Banner Ads Digital Retargeting Search Ads Academic Research on Retargeting MarketingWhat is Retargeting?
Retargeting is a digital advertising campaign strategy that puts your advertisements in front of the potential customers who have already visited your website. Statistics show, 96-98% of customers leave a website without taking any action or abandoning the cart. That means only 2-4% of the traffic converts to the real customer on their first visit. 49% of the traffic visits a website 2 to 4 times before purchasing the product. Retargeting campaigns help the companies reach out to the customers who do not convert in their first visit. Retargeting reminds the consumers that they have expressed interest in a product and that product provides the solution they were looking for. The retargeting campaign uses search engines and social media channels to reach out to these potential customers.
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How is Retargeting or Remarking Used?
As an internet user you might have noticed that once you visit a site to see some products, the advertisement of the same products keeps appearing on your social media feed repeatedly. It keeps reminding you that you showed interest in the product and you still might need the product. This is called the retargeting advertisement strategy. It aims to bring you back to the site and persuade you to reconsider the offer. The most common form of retargeting is site-based retargeting. This is a cookie-based technology that uses a simple javascript code. It allows the companies to follow their audience all over the Web anonymously. The companies paste a piece of code (sometimes referred as a pixel) into the HTML (usually the header or footer) of their website and that enables them to retarget the customers who have visited the website in the past. Every time someone visits the site, the code drops an anonymous browser cookie. This is a small file that stores information. Later, when the cookied visitors browse the Web, the retargeting provider of the company gets to know when to serve ads and the customer starts seeing the advertisement of that product everywhere, whenever they are online. Studies have shown that retargeting campaigns have either a positive or a neutral effect on 89% of the users. This is to remember the cookies are only allowed to store the information which is not sensitive. The name, address or any other piece of information that might personally identify the user are not stored.
Retargeting works in the following way
A user visits a site to watch some products (either because they need it or because they just wanted to check it out) An anonymous browser cookie is dropped The user leaves the site without buying anything The user browse the web Advertisement of the products appears everywhere they go It recaptures the attention of the user the user comes back to the website Either they end up buying the product or they leave again.
Difference between retargeting and remarketing
Both the terms often used interchangeably, but there is a small difference between the two. Retargeting is usually done through third-party networks such as Google Display Network and Facebook and remarketing are done through email. So, in remarketing you need to know the email id of the customer. However, the Google AdWords clubs the retargeting display ads and remarketing emails under the single terminology of "remarketing". Thus, most of the marketers use both terms interchangeably.
Types of Retargeting
Companies need to open an AdWords account and then the retargeting can be set up. They need to add the code on their website and create a retargeting list. The AdWords remarketing campaigns can be set to display either in searches or on Google's display network.
Digital Retargeting Banner Ads
Retargeting can be done via Google's display network. 90% of internet users can be reached out through Display Network ads. Usually, the display ads are related to the websites the user is visiting. For example, if someone is browsing some travel websites, she/he will continue to see ads about travel. However, if a retargeting campaign is on, the ads do not necessarily have to correspond to the subject of the website the visitor is browsing. They might visit a travel website and can see the ads of clothes on that site if the clothes' company is running a retargeting campaign and this particular user has browsed their website. The Display Network retargeting ads start to work once the website of the company accumulates 100 unique visitors within a period of 30 days.
Digital Retargeting Search Ads
This allows companies to target users who have searched for specific keywords. A company's website needs to have at least 1000 unique site visitors before their remarketing search ads appear in Google search results.
Academic Research on Retargeting Marketing
- Retargeting ads follow surfers to other sites, Helft, M., & Vega, T. (2010). The New York Times, 8-11. This article discusses the retargeting advertisement strategy and the debates around it. It discusses whether explaining the technology to the people can reduce their worries about being tracked. It also discusses if the highly personalized retargeting is at all necessary.
- When does retargeting work? Information specificity in online advertising, Lambrecht, A., & Tucker, C. (2013). Journal of Marketing Research, 50(5), 561-576. This paper uses data from a field experiment conducted by an online travel forum to examine whether the dynamic retargeted ads are more effective than the generic brand ads. The result shows, in general, the generic brand ads are more effective than the dynamic retargeting. However, if the product preferences of the customers evolve (like they are visiting review website), the dynamic retargeting performs well.
- Applying Social Marketing Theory to develop retargeting and social networking advertising website, Yang, K. C., Huang, C. H., Yang, C., & Tsai, C. W. (2015, December). In Industrial Engineering and Engineering Management (IEEM), 2015 IEEE International Conference on (pp. 1845-1849). IEEE. In this study, Social Marketing theory is applied to develop a retargeting advertising system and it is combined with social networking advertising. An E-commerce website is developed to include these two kinds of advertising. The website is developed by Microsoft ASP.Net 4.0 in C# and JavaScript program. The conceptual model of the study is analyzed by a focus group analysis.
- Internet marketing, Mix, M. (2005). This presentation describes the internet marketing, Email marketing, Social marketing, Web Site development, Online Display Advertising, and affiliate marketing. It also discusses the new marketing toolkit, website conversion, landing page optimization, internet market strategy and planning, and cross channel marketing integration.
- Marketing analytics for data-rich environments, Wedel, M., & Kannan, P. K. (2016). Journal of Marketing, 80(6), 97-121. This paper traces the historical development of the marketing analytics methods, examines their applications to structured and unstructured data generated within or external to a company and assesses their potential to help in making sound marketing decisions. Three directions for new analytical research methods are identified: analytics for optimizing marketing-mix spending in a data-rich environment, analytics for personalization and analytics in the context of customer's privacy and data security. It discusses the implications of implementing big data analytics, faced by the companies. It further identifies the trends that will shape the future marketing analysis discipline and marketing analysis education.
- Applying Reinforcement Theory to Implementing a Retargeting Advertising in the Electronic Commerce Website, Yang, K. C., Huang, C. H., & Tsai, C. W. (2015, August). In Proceedings of the 17th International Conference on Electronic Commerce 2015 (p. 8). ACM. This study reviews the retargeting advertising strategy by implementing a retargeting advertising e-commerce website and explains how the strategy works. It designs the retargeting advertising strategy for the site using reinforcement theory. JavaScript code is provided for practitioners' reference.
- Tracking the luxury consumer online: an experimental study on the effectiveness of site and search retargeting for luxury brands in China and the Netherlands: an , Yu, S., Hudders, L., & Cauberghe, V. (2017). In Marketing at the Confluence between Entertainment and Analytics (pp. 1541-1541). Springer, Cham. This study examines the effectiveness of the site vs. search retargeting for luxury brands in China and Netherland. It uses model 12 (moderated meditation) of SPSS macro PROCESS to analyze the data. The study finds in the culture of low power distance (Netherland), search retargeting has a greater positive effect on purchase intention and attitude towards the brand as compared to the site retargeting. However, in the culture of high-power distance (China), the difference between the impact of the two strategies is insignificant.
- Retargeting ads for shopping cart recovery: Evidence from online field experiments, Moriguchi, T., Xiong, G., & Luo, X. (2016). The study uses randomized field experiments to examine the effectiveness of retargeting ads with different ad copy content and at different purchase funnel stages. The result shows, retargeting ads in lower funnel based on shopping cart abandonment history are able to increase the purchase response significantly. It shows the ad copies that talk about the return policy are more effective in bringing back the customers than the copies containing product reminder or shipping information.
- Recommendation advertising method based on behavior retargeting, Zhao, Y., Xin-Chun, Y. I. N., & Zhi-Min, C. H. E. N. (2011, October). In 2011 International Conference on Photonics, 3D-Imaging, and Visualization (Vol. 8205, p. 82052D). International Society for Optics and Photonics. This paper proposes a new recommendation advertising method based on behavior retargeting. This new method is able to avoid leakage click of advertising and can observe the changes in the user's interest in time. Experiments suggest the method can be effectively applied to the online system.
- Retargeting, taking full advantage of the online shopping behavior, Choi, H. (2013). This study analyzes the users' online shopping behavior to asses the effectiveness of retargeting and finds retargeting ads are quite effective in bringing back the users to the site. It shows the users are more likely to convert when exposed to the retargeting ads.
- The Impact of Email Marketing, Mobile Marketing and Retargeting on online Consumer Buying Behavior, Khan, I., & Iftikhar, F. (2017). This study analyzes the impact of Email marketing, Mobile marketing and Retargeting on the buying behavior of online consumers. The study shows Email marketing is not effective in increasing the sells as the Emails often go unnoticed or land in the spam/junk folder of the receiver. The study concludes the retargeting has a positive impact on the buying behavior of the online consumers and enhance the purchases.