April 27, 2023
April 27, 2023

What Is Remarketing and How Does It Work? (2023)

Have you ever visited a website, looked at a product or service, and then decided not to make a purchase? Maybe you got distracted, or you wanted to think about it a little longer. Whatever the reason, the fact is that most people don't buy something on their first visit to a website. That's where remarketing comes in.

Remarketing is a powerful online advertising technique that allows you to show ads to people who have already visited your website or engaged with your business in some way. Target these "warm" leads, so to speak, with highly relevant ads and you can increase the chance of turning them into customers.

Let’s take a thorough look at what remarketing is and how it can benefit your marketing initiatives.

What Is Remarketing?

Have you ever visited a website and then started seeing ads for that website or similar products on other websites or social media platforms? That's remarketing in action.

In the context of online advertising, remarketing is a technique used by advertisers to target people who have already interacted with their website or products in some way, such as by visiting their website, adding products to a cart, or signing up for a newsletter.

Here's how it works: Let's say you visit a clothing website and look at a few items but don't make a purchase. The website may then use cookies (small text files that a website stores on your computer or device when you visit it) to track your behavior and gather information about your visit. Later, when you're browsing other websites or social media platforms, you inevitably start seeing ads for that clothing website or the specific items you looked at. 

All of that’s possible because that website you browsed had set up a remarketing campaign that targets people who have visited their website but didn't make a purchase. 

Which brings us to the topic of ads. Within the realm of retargeting, an array of ad types provide unique and specific vehicles for supporting your campaign, including:

  • Site retargeting: The most common type of retargeting, this approach targets users who have previously visited a brand's website. These ads are typically customized based on the user's behavior on the website, such as the pages they viewed or the products they added to their cart.

  • Search retargeting: This type of retargeting targets users who have searched for a particular keyword or phrase on a search engine. These ads are customized based on the user's search behavior, and can be a powerful way to reach users who are actively searching for a product or service.

  • Email retargeting: This type targets users who have interacted with a business through email, such as by opening an email or clicking on a link. These can be customized based on the user's email behavior, with the goal of keeping users engaged with the business.

  • Social media retargeting: This type of retargeting focuses on users who have interacted with a business on social media, such as by following its account or engaging with their posts. Ads of this kind are customized based on the user's social media behavior and, unsurprisingly, are intended to reach users who are active on social media.

  • Contextual retargeting: This type targets users based on the content they’ve viewed on other websites: If a user has visited a sports website, say, they may see subsequent retargeting ads for a sports brand, customized based on the user's interests and behavior on other websites.

  • Dynamic retargeting: Want to show customized ads to users based on their behavior on the original website? This type of retargeting uses dynamic ad technology to make it so. For example, if a user added a product to their cart but didn't complete the purchase, the retargeting ad may show the same product or a similar product with a discount or promotion to encourage the customer to complete their purchase.

Remarketing vs Retargeting

Remarketing and retargeting are often used interchangeably, but they actually refer to two slightly different tactics in online advertising.

To revisit, remarketing is the practice of targeting people who have already interacted with a business in some way, with the goal of reminding them of the business and encouraging them to take a desired action. 

Retargeting, on the other hand, is a broader term that refers to targeting users who have interacted with a business or product in some way, but may not have necessarily engaged with the business directly. For example, someone who has searched for a particular product on Google or visited a competitor's website may be retargeted with ads for the business in question.

By utilizing both remarketing and retargeting, businesses are able to target both users who have already engaged with their business as well as potential new customers who may be interested in their products — maximizing their advertising reach and increase the chances of closing a sale.

Browswer showing a shopping cart with 2 items in it.

Why Remarketing Is Important

Why is remarketing such a popular advertising tactic?

  1. Remarketing allows advertisers to target people who have already shown an interest in their products or services. This means that the audience is more likely to be engaged and receptive to the ads, as they have already interacted with the business in some way.

  2. Remarketing can improve conversion rates, which is the percentage of website visitors who take a desired action. In this case, these ads act as reminders to complete a purchase and can help nudge a visitor toward making a decision.

  3. Remarketing ads can also be customized to show different messages or offers based on where the user is in the conversion funnel. For example, someone who has already added a product to their cart may be shown an ad with a discount code to incentivize them to complete their purchase, while someone who has only visited the website but not added anything to their cart may be shown an ad with a broader message to encourage them to explore the business further.

  4. Remarketing can help improve business awareness and recognition. By consistently showing ads to people who have already interacted with the brand, it helps keep the business top of mind and increases the chances of the user remembering the business when they're considering a purchase.

How Retargeting Works

To reiterate and expand, here’s how retargeting magic plays out:

  1. As mentioned earlier, when somebody visits a website, a cookie is placed on their device that contains information about that person’s visit. When they leave the website, the cookie remains on their device and can be used to identify the user when they visit other websites that are part of the same ad network.

  2. Using this cookie data, ad networks are able to show retargeting ads to users as they browse the web. These ads are typically created using dynamic ad technology, which allows the ad to be customized based on the user's behavior on the original website. 

  3. To create retargeting ads, advertisers typically invest in an ad network such as Snapchat for Business, or a demand-side platform (DSP) that specializes in retargeting. The advertiser provides the ad creative — the image/video and text that will be displayed in the ad — as well as targeting parameters, which specify the audience the ad will be shown to based on their behavior on the original website.

  4. The ad network or DSP then uses their technology to place the retargeting ad on relevant websites across the web, using the cookie data to identify users who are most likely to be interested in the business or product.

How to Build and Execute a Remarketing Campaign

Ready to give it a whirl? Follow these 5 steps for remarketing success:

  1. Define your goals and target audience. Before you start creating your retargeting campaign, you'll want to think about what you're trying to achieve and who you want to reach. Are you trying to drive sales, increase brand awareness, or something else? Who are your ideal customers, and what behaviors are you trying to target?

  2. Set up the relevant pixel, which typically has retargeting capabilities. This is a small piece of code that you'll need to add to your website in order to track user behavior and show retargeting ads. The Snap Pixel is one pixel that has such capability.

  3. Create your ad creatives. Design the actual ads that will be shown to remarketing targets. They should be engaging, on-brand, and include a clear call-to-action.

  4. Set up your retargeting campaign. Choose your target audience, set your budget and bidding strategy, and choose where and when your ads will be shown. Take advantage of any targeting options available to you, such as geographic location, device type, and interests.

  5. Launch your campaign and monitor performance. Once your campaign is up and running, you'll want to keep an eye on your key metrics (such as click-through rate and conversion rate) to see how your ads are performing. Use this data to make any necessary tweaks or optimizations to your campaign.

While you’re at it, make sure to adhere to these best practices:

  • Be respectful of your audience's privacy.

  • Keep your ad creative fresh.

  • Don't be too aggressive with your retargeting.

  • Use segmentation to target users more effectively.

Test, test, test! Experiment with different ad creatives, targeting options, and bidding strategies to see what works best for your brand and your audience.

Hand holding a cell phone

How to Measure Retargeting Performance

Measuring the success of a retargeting campaign is essential to understanding how well your ads are performing and making improvements to your strategy. Be sure to track these key metrics:

  • Click-through rate (CTR) measures the number of users who clicked on your ad compared to the number of times it was shown. A high CTR indicates that your ad is resonating with your target audience.

  • Conversion rate measures the percentage of users who completed a desired action (such as making a purchase or filling out a form) after clicking on your ad. A high conversion rate indicates that your ads are driving meaningful actions from your target audience.

  • Cost per click (CPC) measures how much you're paying for each click on your ad. By tracking your CPC, you can make sure you're getting the most value for your advertising spend.

  • Return on ad spend (ROAS) measures how much revenue you're generating for each dollar you spend on advertising. A high ROAS indicates that your ads are driving significant revenue for your business.

  • Frequency measures how often your ads are being shown to each user. A high frequency can indicate that your retargeting ads are becoming repetitive or annoying to your target audience.

When analyzing the success of your retargeting campaign, it's important to look at these metrics in conjunction with one another. For example, a high CTR is great, but if your conversion rate is low, it could indicate that your products or services aren't resonating with people after they arrive at your link. Similarly, a high ROAS is fantastic — but if your CPC is too high, you may need to adjust your targeting or bidding strategy to make sure you're not overspending.

Where Is Remarketing Headed?

Good question! Consider these trends as you develop your remarketing campaigns now and in the future: 

  • The use of machine learning and artificial intelligence (AI) in remarketing campaigns. AI can help inform personalized and targeted ads by analyzing data, which can then lead to higher conversion rates and a better overall user experience.

  • Dynamic retargeting — showing users ads that are tailored to their specific interests and behaviors. This can help to increase the relevancy of your ads and improve the likelihood of conversions.

  • New forms of retargeting, such as video and social media retargeting. By showing ads on platforms like Snapchat, businesses can reach people in more engaging and interactive ways, which can help to improve brand awareness and drive conversions.

Image of a group of people looking at 1 person's cell phone

Remarketing via Snapchat

Ready to create engaging, interactive, tailored ads, and remarket your way to engaging a younger, global audience and more conversions?

With Snapchat, you can use a variety of targeting options to reach our community and use our eye-catching ad formats and proprietary technology to engage them. Snapchat Ads can be used to showcase your products or services in a visually appealing way, plus you can include interactive elements like click calls to action or augmented reality filters.

Let the remarketing begin!