Alexander Conroy

Does Re-Targeting Work? Why You Should Re-Target Website Visitors

Window Shopping coupleWebsites are much like retail stores.  Shoppers (visitors) like to window shop and browse before they buy.  Few buy on a first visit and it is critical to get them to come back.  Malls depend on location and store synergies to bring shoppers back.  So how do you bring visitors back to your website?  How about putting a branded banner ad in front of past visitors when they visit other websites, blogs, or even on Facebook?  That is exactly what re-targeting is.

Re-targeting ads are much like bringing your visitors back to the mall or more accurately right back to your store window.  After visiting your site they see your ad again and again while visiting other sites, building brand recognition and trust, and yes they do click on the banner ads to visit your site again.

The graphic below illustrates typical website lead flow and conversion process.  Most website owners focus almost entirely on increasing traffic and conversions which is a obviously a high priority.  The problem with this is that if your conversions are say 5% (on the high end of average) your site has converted 5 visitors out of the past 100; but 95 visitors have moved on.  Will they come back?  How will they find you?  This is where re-targeting comes into play, reengaging those 95 visitors that left.

Website traffic and lead flow graphic

Actual Visitors are the best People to Target

People that have visited your website are your best prospects to convert into a new customer.  They have expressed interest in your product or service, browsed through your site, thus they are a “qualified” prospect – the best lead possible.  But the ones that left your website without inquiring or buying, the 95% mentioned above, are lost unless they somehow return.  These visitors are the focus of retargeting.

Likewise retargeting your customers keeps your brand in front of them building brand recognition, loyalty, and repeat customers.

Leads-Conversions flow

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How Re-Targeting Works

Tracking pixels, similar to cookies, are embedded on your website pages.  Tracking pixels are invisible to users and harmless to their computers, but when they visit a webpage with a tracking pixel it is picked up on their computer and identifies them as a past visitor.  It is important to know that no personal information is gathered, just the IP address of the computer.  Tracking pixels allow RTB (Real Time Bidding) software to instantaneously bid on banner ads on websites the user is visiting, and if the bid is successful, they see a banner ad for your company.  This happens in a few milliseconds, seemingly instantaneously to the user.

Separate tracking pixels can be set for specific pages and products to create a laser focused re-targeting campaign with custom ads for each product.  Likewise the RTB software can target users by geography and the campaign can be set to run during specific times and/or days.

How Much Does Re-targeting Cost

Since re-targeting is paid advertising it is scale-able and you can essentially set your own budget.  Keep in mind that the budget you set determines the exposure you get and very small budgets deliver limited results.

RTB ads are bought on a CPM (Cost Per Thousand) impressions basis.  Most RTB software will convert this into a CPC (Cost Per Click) based on your average CTR (Click Through Rate) which allows you to easily set your budget based on how many clicks (visits) you want.  Since you are actually buying ads on a per thousand impressions basis your banner ad design is critical as this determines how many people click on the ad.  Ads with very high click through rates dramatically reduce your advertising cost.

Retargeting ads are generally less expensive on a CPC basis than Google keyword search advertising.  Typical CPC figures range from $0.45 to $1.25 depending on the click through rate and target market.  So a $1,000 budget would deliver roughly 1,000 to 2,000 clicks.  Based on your conversion rate you can calculate how many clicks are required to achieve your sales goal and set a budget for your campaign.

Calculating Your Ad Spend Budget

We created a handy Internet Advertising Budget Calculator that will determine your ad spend budget based on either a sales goals or traffic goal.   The calculator is an interactive page on our website and free.  Note that this is only the Ad Spend budget, there are other costs with internet advertising campaigns such as creative development costs (banner ads) and campaign management fees that may apply.

Steps to a Successful Re-Targeting Campaign

While it is relatively easy to setup a campaign and get it running, there is a lot involved in creating a successful campaign that out performs industry averages.  For example, our RTB and re-targeting ad campaigns typically have CTRs (Click Through Rates) 13X  industry averages with some as high as 50X.  This performance is a result of excellent creative design with A-B testing to optimize the ads and setting up the campaign targeting correctly.

Retargeting is one element of a comprehensive Digital Marketing Strategy which would include a SEM (Search Engine Marketing Campaign) and SEO campaign along with content development.

The basic steps to setting up a re-targeting campaign are shown below. If you are not familiar with creative design for internet advertising and setting up internet ad campaigns we highly recommend using an experienced professional as they will deliver better results at a lower cost.

  1. Establish Your Budget: The most common method for establishing a budget is simply picking a number that seems reasonable. This may lead to either overspending (generally not the case) or under-spending (most common) which results in disappointing results.  Start with your sales or inquiry goal and work backwards through conversion rate, CTR (Click Through Rate), CPC (Cost Per Click) and then establish your budget.
  2. Tracking Pixels: Place tracking pixels on pages you want to re-target visitors from. You can use one pixel for the entire site or separate pixels for specific products.
  3. Conversion Pixel: Place a conversion pixel on your Thank You page. The conversion pixel tracks visitors that have inquired and removes them from your target audience.
  4. Banner Ads: Create your banner ads.  There are more than 12 different formats, however, 6 are the most common and highest volume for impressions. We highly recommend creating two variations of your banner ad for A-B testing.
  5. Beta and A-B Testing: Run a 30 to 45 day beta test of your campaign to evaluate the settings. During this period run A and B versions of your ads to determine which has the highest CTR.
  6. Review Beta and A-B Metrics: Review the results of your beta test, adjust the campaign accordingly.
  7. Launch the Full Campaign: launch your campaign and monitor metrics regularly.