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Display retargeting 101: a handy guide to the buzziest ads on the internet

Retargeting relies fundamentally on collecting user data and applying it intelligently to expedite conversions.

This post looks at the case for retargeting, the working behind it, and how to design ads.

Anyone who has used the internet for even the most basic purposes, visiting a specific website, searching for information or even checking their email, would have noticed a strange phenomenon over the last few years.

Ads related to the same topic or from the same brand stalk you everywhere you go on the internet. Things that you searched for suddenly appear in the form of ads at times when you least expect them. Yes, it can get a little spooky for the uninitiated.

While digital advertising has been divided into search and display advertising since the birth of the internet, the last few years have seen a new entrant in the field – retargeted ads.

While traditional banner ads have average click through rates of about 0.07%, retargeted ads offer a CTR that is ten times higher, at about 0.7%.

So what exactly is retargeting?

Retargeting is the process of advertising to users based on their past online activity.

This means that users who have already visited your site or searched for a keyword related to your area of business, will see your brand ads across various ad networks. This form of reminder advertising is done through display ads, search ads even emails that are sent out to prospective customers.

Retargeting can be done based on two broad criteria:

A.    A specific action a user performed like searching for a particular keyword, visiting your website, looking at a particular product, visiting a competitor’s site, opening an email etc.

a.    Site retargeting

b.    Search retargeting

c.    Email retargeting

B.    The source of a user’s visit gives clues about what interests the user, their profile information as well as how serious they are about making a purchase

a.    Social Media retargeting

b.    Retargeting from clicks on SEM Ads and Content marketing pieces



How retargeting works

Retargeting relies fundamentally on collecting user data and applying it intelligently to expedite conversions.

Tracking users and serving them ads

How this data is collected and applied can be described in the following 6 steps:

  1. A tracking code or pixel in the form of a JavaScript snippet is placed on every page of your website and on your SEM banner ads.
  2. When a user lands on your site for the first time or clicks on your banners, an anonymous cookie is dropped in their browsers thus ‘tagging’ them as visitors.
  3. This cookie is now used to track the user’s browsing behavior across the web. Based on the user’s browsing behavior, she is shown ads related to your brand across the different sites she visits.
  4. The specific sites that will display your retargeted ads are part of various ad networks like the Google Display Network, OpenX, Retargeter, AdRoll etc. When setting up a retargeting campaign you need to decide on which ad networks you’d like to display your ads on.
  5. Your ads will be displayed to a tagged user based on the frequency settings of your campaign. Ideally a frequency of 7 to 10 exposures in a month is a good benchmark to work with. In any case, it’s best to avoid overexposure and prevent the user from feeling ‘stalked’ and put off entirely by your brand.
  6. Once a tagged user clicks on your retargeted ad and converts, she gets automatically ‘untagged’ from the retargeting campaign. This is done by placing a ‘burn pixel’ on the conversion page of your site. This could be the payments page or the download page or even the ‘thank you’ page on your site.

Designing your retargeted ads

Once you know how retargeting basically works, you need to customize your messaging based on where your user is on the purchase cycle.

Use this handy chart created by Joanna Lord from Moz for designing your banner communication:

retargeting ad ideas

Source: Communication Ideas for Retargeted Ads at Different Stages of the Purchase Cycle 

The Case for Retargeting

As mentioned earlier, retargeting picks up on information about the user and serves up ads to them based on such information. A retargeted ad, therefore is a conversion tool that is a little more data driven than most others.

There are some very substantial benefits that retargeted ads offer an advertiser, including:

Brand recall

Retargeted ads serve as reminders, prodding users to return to a particular site that they visited already. By serving up ads that remind users about an incomplete transaction or a special offer based on a user’s profile data, retargeted ads help users in their decision making process.

Right context, right timing

A non-retargeted ad shows up on networks that may or may not be relevant to a user. This lack of relevance and context leads to wasted ad dollars. Retargeted ads also allow you to control the timing of your ads, offering you the opportunity to make the right move at the right time.

Ability to customize messaging

The data that is collected about the user’s browsing behavior helps brands customize their messaging based on that. A small store owner and the CEO of a top fashion magazine will see completely different messages based on their profile, browsing behavior, industry and so on.

Improve conversions

Since a user that sees or clicks on a retargeted ad is a qualified lead, the chances of them converting are much higher than a first-time visitor who clicks on your ad without any prior exposure to your brand or area of functioning. Retargeted customers are 70% more likely to complete a purchase than non-retargeted ones.


One of the main grouses against traditional display advertising has always been the fact that is audience agnostic and is often very expensive from an ROI perspective as compared to search advertising.

With retargeting, you end up with the best of both worlds – the power of images to support text messages that display ads offer and the option to laser target your ads to users who have shown a clear intent and interest towards your brand.

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