We’ve all been there: You’re searching the web for some new shoes but then get distracted by a TV show or an incoming text message. Upon opening up your laptop again, you notice that there’s magically an ad for the running shoes you were looking at before.
Coincidence? Not in the slightest.
Smart marketers understand that there is no magic wand needed for this trick. Instead, they strategically utilize retargeting to reengage missed consumer opportunities.
This powerful strategy — when implemented properly — can inspire casual browsers to convert into customers. And many companies are willing to pay more for retargeted ads because they appear for consumers whose intent to purchase is typically higher, such as shoppers who have abandoned an item in their cart. Although retargeting can appear to be a win-win scenario, some startups are still on the fence.
After all, smaller companies usually have tighter advertising budgets, so it’s not surprising that startups are wary about additional methods — like retargeting — that require extra expenses. Additionally, retargeting done wrong can be off-putting to consumers. More than 50 percent have expressed concerns about seeing retargeted ads. So it raises the question: “Is retargeting worth the investment of effort and money?” I’d argue that for startups, retargeting can translate into big returns with the right approach.
When companies choose not to retarget, they miss out on customers, plain and simple. It can be the difference between an abandoned cart and a transaction because the right offer made at the right time to a consumer who’s already engaged with a brand is much more likely to influence a purchase. In fact, retargeted ads get 76 percent more clicks than display ads.
Retargeting is effective because it increases the visibility of marketing messaging. According to the “Rule of 7,” consumers need seven points of contact with a company’s advertising before they will be motivated to act. Retargeting is the perfect strategy to make this happen. When consumers see an ad on a social media app and then again on a news website on their computer, their brand awareness jumps to 21 percent. And retargeting can be cost-effective, too. For example, just a few dollars a day spent on retargeted Facebook ads can reach your entire email list.
So while retargeting has a few drawbacks, startups still have so much more to gain when it comes to the opportunity to win back customers.
Retargeting can be intimidating because it’s far from a “set it and forget it” venture. Instead, it requires constant testing to ensure profitability. Here’s how you can devise a strategy to maximize your efforts:
One of the most common retargeting mistakes is focusing on people who have already converted. It’s not the best use of your budget to chase after an existing customer. That person doesn’t need as much convincing to come back to your site. Instead, efforts should be focused on winning over new customers. Make sure your pixel is set up correctly on your funnel pages, as well as your conversion page, to get the right leads.
Segmentation of your customer lists is critical in most digital marketing campaigns, from developing inspiring creative to allocating ad spend. Retargeting is no exception to the rule, but many companies overlook the importance of segmentation here. Again, apply your budget wisely by developing a segmentation strategy to drive your retargeting efforts.
Remember that many consumers are wary of retargeted ads — which can seem creepy and off-putting if they’re overused. Unfortunately, many marketers fall into the trap of not setting frequency caps on retargeted ads, meaning that consumers can quickly get the impression that they’re being stalked around the web. Don’t be the brand trying way too hard to get customers back.
When integrated strategically within retargeting campaigns, discounts and other incentives produce impressive results. For example, when a user leaves a cart with high-value or high-margin items, promote a discount in a retargeted ad to incentivize them to complete the purchase.
If you are still skeptical about the power of retargeting, consider this: Without retargeting, only 8 percent of browsers convert to purchasers. Retargeting is well worth startups’ time and effort, and if you use the above approaches to your advantage, your startup could find its power in transforming missed opportunities into new ventures.
Roy Morejon is the President and Co-Founder of Enventys Partners, a vertically integrated product development, crowdfunding, and digital marketing agency. The turnkey firm combines product development and marketing services, helping entrepreneurs and enterprise companies bring innovative products and ideas to market quickly. A serial entrepreneur and thought leader in online marketing for more than 25 years, Morejon consulted for AOL and Microsoft in his teens and now provides tech startups with a one-stop solution for all of their go-to-market needs.