What Is Retargeting & How Do Retargeting Ads Work? (2024)

Most people don’t buy your products after their first visit to your site.

Ecommerce stores convert only 5.2% of traffic on average. Without a strategy to gain back website visitors, you’re leaving money on the table. That’s where retargeting comes in. 

Learn how retargeting works, and discover tips and apps for creating ads that keep you top of mind and profitable. 

What is retargeting?

Retargeting is a form of online advertising that targets users who have previously interacted with a brand in some way. This could be visiting the brand’’s website, clicking on a product, or even abandoning a shopping cart.

“Retargeting ads are shown to people who have already visited your website,” says Daniel Patricio, founder of Bull and Cleaver. “These ads are intended to entice them to come back to buy your product.”

Retargeting vs. remarketing

Retargeting and remarketing are often used interchangeably. However, they are distinct strategies with separate goals and channels. 

How retargeting ads help

Some 96% of people who come to your website are not ready to buy. Retargeting campaigns are kind of like dating: You don’t meet someone for the first time and fall in love. It usually takes a few interactions before you commit. 

Retargeting ads have a couple advantages: 

• They’re personalized. Retargeting ads can reference past interactions with your brand. You can remind customers of the products they’ve viewed, liked, or added to their carts. 
• They’re effective. Precisely segmenting customers by behaviors means you can deliver relevant ads with higher click-through rates (CTR) and conversion rates (CVR). 

How retargeting works

Retargeting works across many different channels, like paid search, email, and social media. There are two common ways to approach retargeting. 

Pixel-based retargeting

This paid advertising technique lets marketers display targeted ads to visitors who already visited their website. They do this by placing a “pixel,” or a piece of code, on the site.

Pixels like these install cookies on a shopper’’s browser, so retargeting platforms like Google Ads, TikTok, and Meta can track their online behavior and show relevant ads as they browse. 

Here’s how it works for shoppers:

1. They browse your website, scrolling through your bestsellers and maybe even adding products to their cart. 
2. They leave your website without buying. 
3. They see your retargeting ads while reading an article, scrolling Facebook, or watching YouTube. 
4. They remember the awesome stuff you had in your store, return, and purchase.

By showing relevant, targeted ads to interested customers, retargeting raises brand awareness and increases conversions. Moreover, you can automate the ads while you focus on other aspects of your business.

List-based retargeting

A list-based retargeting campaign employs data about potential or existing customers to serve ads. These campaigns require two steps:

1. Share a list of email addresses with a social platform such as Facebook or LinkedIn.
2. The platform then finds people with matching emails and serves them advertisements.

List-based retargeting is less common than pixel-based retargeting, but it’’s effective for re-engaging past customers and leads. 

Because the list consists of known contacts, you can create highly targeted, customized ads that convert. If you have a lot of data and can cross-sell or upsell to the potential customers on your list, then this strategy is a good bet.

💡Want to set up email retargeting campaigns for your store? Download the Klaviyo Email Marketing & SMS app today.

Best practices for creating retargeting ads

To make the most of a retargeting campaign, follow these best practices:

1. Use ads to build audiences

It’s tempting to focus on getting that first sale with a new customer, but getting them to opt into your newsletter is more likely to keep them engaged, says Reza Khadjavi, founder of performance marketing agency Shoelace.

“Don’t always feel the need to get somebody to buy something,” Reza advises. “You can use a retargeting campaign to get them to sign up to your email list, because then it’s free for you to reach out to them any time you want.”

2. Think beyond the inbox

Even as your email list grows, it’s not a magic bullet. Reza has seen firsthand that email marketing works best when combined with retargeting campaigns.

“Email is always a great channel,” Reza says, “but even when people have opted into your list, sometimes your emails wind up in the promotions tab, and people won’t see them.

“Even when people get the email and open it, there’’s a lot of value in reinforcing that message through retargeting, because they might see the email, but they’’re on the go and they forget to act on it. If you’re retargeting them, later they might see a video ad on Instagram that has the same messaging as the email and say, ’‘Oh right, I knew I wanted to buy that.’”

Pairing these efforts is what’s known as a multitouch campaign, where you communicate a consistent message to a target customer across different touchpoints. 

3. Start small, and know your margins

Your best source of learning will come from getting some skin in the game and actually running a few ads. That’s why even seasoned pros will start small to test the waters when they’re running new campaigns. Brent Stirling of Growth Crew advises starting with an understanding of your profit margins to make sure you’re not going over budget.

“There are a lot of variables when you run Facebook ads,” he says. “Starting out, be sure to set a small daily or lifetime budget with conversions as the objective. A lot of marketers will also set a bid cap per conversion, but doing this requires knowing what your margins are. 

“If your average cart size is $60, what are you comfortable spending to get that order? This can take a bit of time to figure out the sweet spot—you want to maximize conversions without overspending. Maybe it’’s $10 per conversion, maybe it’’s $20. Each retailer will be different.”

To implement Brent’s advice, examine your business’s budget to determine its profit margins.

4. Capture attention with product page retargeting

Product page retargeting is the simplest way to profit from your advertising efforts. It involves getting people who’ve visited your store and looked at actual products back to buy them. 

These ads work better in shorter windows. For example, if someone visited a specific page in the past three days, they are more likely to buy versus someone who visited in the past 30 days. 

5. Test homepage and collection page retargeting ads

One common retargeting strategy is showing ads to people who’ve visited your homepage or collection page. These ads are different from product page ads because the viewers have never seen a product. 

Don’t focus on product benefits with these ads. Instead, you highlight why you’re a great brand to do business with.

These ads are beneficial because they:

• Remind potential customers that you exist
• Build trust by letting potential customers know other customers love buying from you (“social proof”)
• Make targets feel good about your brand
• Show off your products and compel click-throughs
• Have a strong call to action

Look at how BOOM! by Cindy Joseph approaches homepage and collection page ads and demonstrates social proof.

How to create retargeting ads

Several platforms offer retargeting ad capabilities. Here’s how to implement retargeting ads on some of the most popular ones:

Facebook & Instagram

Setting up a Facebook retargeting campaign is easy with a Shopify store once you’ve set up Shopify’’s Facebook & Instagram channel and synced your products to Facebook.

Here’s how to set up Meta campaigns, using Facebook as an example:

1. In Shopify, go to Marketing.
2. Click Create campaign.
3. Click Facebook dynamic retargeting ad.
4. Enter a name and the ad text for your activity.
5. Set the budget.
6. Set a start date and time;You can also set an end date and time, if you choose.
7. Click Publish activity.

Shopify apps like AdRoll help you run and optimize retargeting ads across Google and other social media platforms. 

TikTok

You can also retarget people with TikTok ads. As with Facebook, you’’ll need to install the TikTok pixel on your website and complete setup on TikTok Ads Manager. TikTok has options for creating custom audiences based on criteria like:

• Customer file uploads
• People who have seen or engaged with your content 
• People who have visited your TikTok Shop
• People who have visited your website

💡AD TIP: Install the TikTok app on your Shopify store. You can automate ad creation and launch a shopping tab on your TikTok profile in select countries.

LinkedIn

With LinkedIn, you can retarget audiences based on activities like company page visits, lead gen form responses, and LinkedIn event RSVPs. To collect website visitor information, set up the LinkedIn Insight Tag, which gives real-time insights into visitors’’ professional traits and content preferences. 

LinkedIn retargeting is ideal for B2B brands looking to re-engage qualified buyers for their products and services. 

Pinterest

The Pinterest ad platform also supports dynamic retargeting campaigns. Simply upload your catalog and enable the Pinterest tag on your website. 

The tag consists of a base code and an event code, of which there are several types. The base code is unique to your Pinterest account, allowing you to build retargeting campaigns based on site activity.

Event codes are for pages where you want to track things like conversions, carts, and sign-ups. You might add the checkout tag event code to the “Thank you for your order” page to flag the purchase, for example.