Retargeting is one of the most powerful tactics in digital marketing, and for good reason. You’ve probably heard about it in webinars, blogs, or podcasts, but might not be entirely sure how it works. Retargeting ads allows brands to re-engage potential customers who have shown interest in their products but haven’t converted yet. It leverages cookies to track visitors, giving you the opportunity to display relevant ads to them across different platforms.
In this guide, we’ll take a deeper dive into what retargeting is, why it’s so effective, and how to make it work for your business. If you’re not clear on how a cookie goes beyond being a sweet snack and becomes a crucial piece of the marketing puzzle, you’re in the right place. This guide will walk you through the basics of retargeting, explain its importance, and show you exactly how to get started—whether you’re new to digital marketing or looking to optimise your current strategy.
What is retargeting?
Retargeting is an advertising strategy that allows you to show ads to people who have visited your website or mobile app but didn’t make a purchase. By displaying targeted ads on other websites or social platforms, you remind potential customers about your brand and products, encouraging them to return and complete a purchase.
Here’s an example: A customer browses your site for a dress but doesn’t buy. Later, they see an ad for those same dresses on Facebook and Instagram, reminding them to come back and make the purchase.
The opportunities retargeting ads offers include:
- Continuing conversations with interested shoppers
- Re-engaging past customers to upsell or cross-sell
- Recovering abandoned carts
- Promoting limited-time offers to previous visitors
How does retargeting work?
By using cookies or customer lists, brands can deliver personalised ads to users who didn’t convert during their initial visit. There are two main types of retargeting: pixel-based retargeting and list-based retargeting.
Pixel-based retargeting
Pixel-based retargeting relies on tracking code, or a ’pixel’, that’s placed on your website to monitor user behaviour. This pixel collects information about what pages the user visits, how long they stay, and whether they add items to their cart but leave without completing the purchase. Once the visitor leaves, ads tailored to their browsing activity are displayed on other sites or social media platforms like Facebook and Google, keeping your brand top-of-mind.
Why pixel-based retargeting?
- Real-time targeting: As soon as a visitor leaves your site, you can immediately display relevant ads to them.
- Anonymous engagement: Pixel-based retargeting allows you to target users who didn’t share their personal information but interacted with your site.
To get started, you’ll need to integrate the tracking pixel into your website, which any platforms like META, TikTok and Google Ads make easy by providing plug-and-play options. With pixel-based retargeting, the focus is on reaching a wide range of visitors based on their behaviour.
List-based retargeting
List-based retargeting is a bit more manual but offers greater precision. This approach uses first-party data that you’ve collected, such as email addresses from previous customers or subscribers. You upload your contact list to an ad platform, which then matches these contacts with their profiles across different networks, like social media or Google. You can then display ads to these contacts as they browse the web.
Why list-based retargeting?
- Highly targeted: Since these individuals have already engaged with your brand, list-based retargeting allows you to create hyper-targeted campaigns to nurture existing relationships.
- Focused engagement: You can upsell, cross-sell, or offer exclusive promotions to this targeted group, making it a great tool for loyalty programs or post-purchase communication.
While it’s more hands-on than pixel-based retargeting, this method is especially effective for nurturing warm leads and increasing customer retention.
Where can retargeting ads run?
Retargeting ads can be displayed almost anywhere on the internet. This includes:
- Social media platforms: Facebook, Instagram, LinkedIn, TikTok, Pinterest
- Google display network: Over two million websites, offering expansive reach
- Other third-party ad networks: These allow for more niche targeting opportunities.
This wide reach ensures you’re able to stay connected with your audience wherever they go, helping increase your chances of converting them into paying customers.
Different types of retargeting ads
Retargeting ads come in a variety of formats, each suited to different marketing goals:
- Dynamic ads: These ads are personalised based on a user’s activity on your site, such as viewing specific products. For instance, if a customer browsed for dresses, the dynamic ad might show them the exact product they looked at, reminding them to make the purchase.
- Static image ads: These ads feature a single image with text and a call-to-action. They are great for simple reminders or special promotions.
- Rich media ads: Using elements like animations, these interactive ads encourage users to engage by clicking or hovering.
- Video ads: Eye-catching videos are great for grabbing attention and conveying more detailed information.
- Carousel ads: Typically used on social media platforms, these ads let you display multiple images or products in a single ad, allowing for more engagement.
Why retargeting is a must-have for marketing
Retargeting ads is a crucial component of any digital marketing strategy due to its cost-effectiveness and ability to boost conversions. Unlike traditional ads, which target cold audiences, retargeting focuses on people who are already familiar with your brand. These visitors are more likely to convert, meaning retargeting ads can perform up to 10 times better than regular display ads.
By delivering personalised, relevant ads to users who have interacted with your site, retargeting helps maintain brand awareness, encourages return visits, and increases the likelihood of conversion. In short, retargeting maximises your advertising investment by focusing on the most promising leads.
How do you determine the effectiveness of a retargeting campaign?
Measuring the effectiveness of your retargeting campaign is key to refining your strategy and maximising return on investment. Like other marketing efforts, determining success depends on your specific campaign goals. Here’s how you can assess performance across different objectives:
Using retargeting to increase brand awareness
If your goal is to raise brand awareness, retargeting is a powerful way to remind visitors of your brand, products, or services. In these campaigns, consider introducing new products or features and making general store announcements. Key performance indicators (KPIs) for this type of campaign would likely include:
Click-through rate (CTR): While the focus is on visibility, a healthy CTR (the percentage of impressions that lead to clicks) signals that your ad creative is compelling enough to prompt engagement.
Impressions: The total number of times your ad is displayed. A high impression count suggests broad exposure and brand recall.
Using retargeting to boost conversions
Retargeting is often used to push users further down the funnel toward conversions. Whether your aim is to generate sales, signups, or registrations for an event, these ads serve as timely reminders to complete an action. To measure conversion-driven retargeting efforts, focus on:
- Conversion rate: The percentage of users who completed your desired action after seeing the ad.
- Cost per conversion: This is the total spend divided by the number of conversions, providing insights into how efficiently your ads are driving results.
Using retargeting ads to upsell or cross-sell customers
Looking to increase customer lifetime value (CLTV)? Retargeting ads are an excellent way to engage existing customers, encouraging them to make additional purchases or join a loyalty program. You can upsell higher-end products or cross-sell complementary items based on their previous purchases. Metrics to track here include:
- Customer lifetime value (CLTV): How much a customer is likely to spend over their entire relationship with your brand.
- Return on ad spend (ROAS): Measures the revenue generated for every dollar spent on ads, crucial for evaluating long-term customer relationships.
Using retargeting ads to recover abandoned carts
One of the most effective uses of retargeting is to recover abandoned shopping carts. With about 70% of online shopping carts left without checkout, retargeting plays a vital role in encouraging users to return and complete their purchase. Boost your chances of success by using urgency-driven messaging (“Hurry, almost sold out!”) and social proof (testimonials or customer reviews).
Metrics for abandoned cart retargeting include:
- Abandoned cart recovery rate: The percentage of users who return to their cart and make a purchase.
- Conversion rate: A crucial metric here, showing the percentage of visitors who eventually buy after seeing a retargeting ad.
Choosing the right KPIs for retargeting campaigns
Once you’ve set your goals, the next step is choosing the right KPIs to track performance.
Pro tip: Always benchmark your KPIs against historical data to set realistic goals and measure progress effectively.
What should the sequence of your retargeting ads be?
Retargeting ads are most effective when part of a broader omnichannel marketing strategy, helping you engage customers at every step of the buyer’s journey. While retargeting alone won’t solve all your marketing challenges, building a structured sequence of ads can boost your return on investment (ROI). To maximise results, you’ll want to create campaigns that align with the various stages of the marketing funnel: awareness, consideration, and conversion.
Awareness stage: Capture attention and build familiarity
In the awareness stage, your main goal is to remind potential customers of your brand after they’ve visited your website but didn’t engage deeply or make a purchase. These users may have explored one or two product pages but need more information before they feel comfortable making a decision. This is where your first round of retargeting ads comes into play.
What to include in awareness ads:
- Brand messaging: Focus on highlighting your brand and key offerings.
- Product highlights: Showcase popular products or services.
- Educational content: Introduce your value proposition through informative articles, blog posts, or video content.
Example: A user visits your website but doesn’t stay long. They later see a retargeting ad showcasing your top-selling product, accompanied by a short explainer video introducing your brand and why it stands out.
Consideration stage: Provide deeper Information
At the consideration stage, the user has a clearer idea of what your business offers but needs additional information to move forward. This is where retargeting ads become more focused, offering more detailed content to help them weigh their options.
What to Include in consideration ads:
- Social proof: Customer reviews, testimonials, and star ratings.
- Product comparisons: Explain what makes your product superior to alternatives.
- Discount offers: Encourage users to take the next step with limited-time discounts or exclusive promotions.
Example: A shopper who previously viewed a product sees an ad highlighting the same item with a 5-star rating and a customer testimonial. The ad may also feature a 10% off discount code for first-time buyers.
Conversion stage: Push for the sale
In the conversion stage, your ads should focus on driving immediate action. These users have already interacted with your website multiple times, and your goal is to encourage them to complete the purchase.
What to include in conversion ads:
- Urgency elements: Time-sensitive offers or stock alerts (e.g. ’Only 3 left!’).
- Abandoned cart reminders: If they added items to their cart, remind them about it.
- One-click checkout: Simplify the buying process by offering easy checkout options.
Example: A user who added items to their cart but didn’t check out will see a retargeting ad with a message like, “Only a few left in stock—complete your purchase now!” This can be paired with a countdown timer to create urgency.
Post-conversion: Upsell and build loyalty
Once the user has made a purchase, retargeting doesn’t stop. The post-conversion stage is an opportunity to upsell, cross-sell, and build customer loyalty.
What to include in post-conversion ads:
- Related products: Suggest complementary items to what they’ve already bought.
- Exclusive deals: Offer special deals or incentives for returning customers.
- Loyalty programs: Encourage them to join your rewards or loyalty program for future benefits.
Example: After purchasing a pair of shoes, the customer may see ads for matching accessories or a special discount on their next purchase.
Mapping out your retargeting strategy
To ensure your retargeting efforts cover every stage of the funnel, it’s important to map out the customer journey and design ads for each phase. Consider segmenting your audience based on their interactions with your website—those who only visited once may need broader awareness messaging, while those who abandoned their cart are better targeted with urgency-driven ads.
By creating a sequence of ads that gradually nurtures leads through the funnel, you can provide relevant content at every step, increasing your chances of conversion and maximising your retargeting campaign’s effectiveness.
What are some examples of A+ retargeting campaigns?
Think back to the last time you saw a retargeting ad. Did it catch your attention or feel like something you could ignore? Successful retargeting campaigns should engage shoppers without feeling intrusive. The key is offering value—whether through a compelling offer, urgency, or personalised content—without becoming repetitive or annoying.
The best campaigns grab attention right away and remind shoppers why they should give your brand another chance. Avoid being generic, and instead, make sure your messaging feels fresh, relevant, and worth engaging with.
Here are 4 standout examples of top-tier retargeting campaigns:
Airbnb: Relevant property listings
What they do well: Airbnb is known for its highly targeted retargeting ads. If a user browses properties but doesn’t make a booking, Airbnb displays retargeting ads showcasing the exact properties they viewed. These ads often include enticing elements like pricing, reviews, and “X properties left” urgency messages to encourage users to complete their bookings.
Why it works: This strategy feels highly relevant to the user’s browsing behaviour, providing a personalised experience that reminds them of their potential stay. It combines scarcity with social proof to create a compelling reason to act.
Image source: mayple
Amazon: Dynamic product recommendations
What they do well: Amazon excels at retargeting ads through dynamic product ads. If you’ve viewed a product but didn’t purchase, Amazon will retarget you with ads for the same product or complementary items. They even provide recommendations based on your browsing history, increasing the likelihood of engaging with the ad.
Why it works: Amazon uses a personalised approach by offering a mix of relevant products and new suggestions. This feels tailored to the user’s interests and encourages both returning to the site and exploring more options.
Image source: Hubspot
Nike: Cart abandonment reminders
What they do well: Nike’s retargeting ads campaigns focus on reminding users about items left in their cart. Their ads often feature compelling calls-to-action like ‘Don’t miss out’, along with the added incentive of free shipping or discounts for completing the purchase. The ad visuals are typically high-quality and attention-grabbing, consistent with Nike’s brand.
Why it works: By addressing one of the most common online shopping behaviours—cart abandonment—Nike leverages urgency and incentives to bring users back to complete their purchase, increasing their conversion rates.
Image source: Digitalagencynetwork
Takeaways for your campaigns
To run an A+ retargeting ads campaign:
- Personalise your ads: Make sure they relate directly to the user’s behaviour on your site.
- Offer value: Use urgency, discounts, or exclusive offers to nudge users back to your site.
- Avoid repetition: Keep your messaging fresh and varied, so it doesn’t feel like the same ad on repeat.
Retargeting is your opportunity to turn interest into action—so make sure your campaigns are strategic, thoughtful, and designed to win back your audience.
4. Retargeting case study: Mazda and Merchenta
Source: CXL
Mazda aimed to increase test drives at local dealerships and partnered with Merchenta to create an effective pay-per-click (PPC) retargeting strategy. The goal was to turn website visitors into local dealership visitors through dynamic, localised ads. Using their IntelliAds solution, Merchenta achieved impressive results:
- A 53% higher conversion rate compared to the control group.
- Car sales were 98% higher than Mazda’s offline average.
- The ads garnered a 20% engagement rate.
Image source: LINK
How it worked
Merchenta targeted users based on geographic proximity, dynamically inserting Mazda models into ads that matched local dealership inventory. The coolest part? Visitors who were browsing the national Mazda website were shown ads specific to dealerships near them, with the exact models they were interested in. They were able to connect with local dealership inventory to personalise the ads as much as possible with their ads.
Key takeaways
To replicate similar results, use tools like Google Ads dynamic remarketing to create city-specific campaigns. Segment your audience by location and align your ads with products or services relevant to that region.
Even if you’re not in the automotive industry, you can apply this principle to any business with location-based relevance, such as using Google Ads dimensions to identify which cities generate the most traffic.
How to apply this
- Customise by location: Identify cities or regions that drive the most traffic and create tailored campaigns that highlight localised inventory or offers.
- Dynamic remarketing: Use tools like Google Ads to dynamically adjust your ads based on the user’s browsing history and location.
This case shows how powerful personalisation and geographic targeting can be when used in retargeting campaigns, making ads more relevant and driving higher engagement and sales.
The ultimate retargeting metrics worksheet
Ready to kick off your first retargeting ads campaign and measure its impact? Tracking your progress is key to understanding how well your ads are performing and demonstrating the value of retargeting to your team.
To help you stay on top of your campaign’s performance, we’ve created a worksheet to monitor your metrics over time.
How to use this worksheet
- Set a baseline: Before launching your retargeting campaign, note down your current metrics such as website traffic, conversion rate, and click-through rate (CTR). This baseline will give you a clear starting point to compare your results against.
- Track short-term results (one week after launch): After one week of running your retargeting ads, start tracking initial performance. Look at metrics like click-through rate (CTR), cost per click (CPC), and engagement rates to see how users are responding. This will help you quickly identify if your ads are resonating with your audience.
- Measure mid-term impact (one month after launch): By the end of the first month, you should have a clearer picture of how effective your retargeting campaign is. At this point, focus on conversion rate, cost per conversion, and return on ad spend (ROAS). These numbers show whether your campaign is successfully turning visitors into customers and delivering a positive return on investment.
- Assess long-term effectiveness (three months after launch): At the three-month mark, you should start seeing the full impact of your retargeting efforts. Compare your long-term customer acquisition cost (CAC) and customer lifetime value (CLTV) to understand if your campaign is bringing sustainable growth to your business. By now, you should also have enough data to fine-tune your targeting and ad messaging for maximum results.
Download the ultimate retargeting metrics worksheet here
Why tracking these metrics is important
Tracking these metrics at regular intervals will help you gauge the effectiveness of your retargeting ads campaign, identify areas for improvement, and optimise your budget. If you notice certain ads or strategies performing better than others, you can quickly pivot to maximise your return on investment.
Pro tip: Don’t forget to adjust your campaign based on real-time data! If one type of ad or message isn’t performing as expected, consider A/B testing different creatives or targeting parameters to improve your results.
Get started with Holmes
Retargeting can feel overwhelming, especially if you’re new to digital marketing. But with the right guidance, you can confidently launch a successful campaign. At Holmes, we provide everything you need to create standout retargeting campaigns. From expert strategies to step-by-step instructions, we make sure no potential customer slips through the cracks.
With our proven solutions, your visitors will return to your site—and more importantly, they’ll convert into loyal customers. Ready to begin?
Contact Holmes Digital to set up your first retargeting campaign today!