How Retargeting Works (+ Top Apps To Run Ads)

retargeting ads

Most people don’t buy your products after their first visit to your site.

Ecommerce stores, on average, convert around only 5% of their traffic. If you don’t have a strategy to gain back website visitors, you’re leaving money on the table.

That’s where retargeting comes in. 

What is retargeting

Retargeting is a form of online advertising that targets users who have previously interacted with a brand in some way. This could be visiting the brand's website, clicking on a product, or even abandoning a shopping cart.

In this article, you’ll learn how retargeting works, with tips and apps to create ads that keep you top of mind and profitable. 

How retargeting works

Retargeting works by using “cookies,” which are pieces of code stored by a user’s web browser. They tell you who visited your webpage, saw your ad, or engaged with your mobile app.

Using cookie data, you can retarget recent website visitors with ads to remind them about products they wanted to buy. Social media platforms like Facebook and Instagram run retargeting ads. You can also run Google ads through the Google Display Network. 

Common retargeting ads ecommerce brands run are aimed at:

  • Anyone who’s visited your homepage or collection page
  • Anyone who’s visited your product page
  • Anyone who’s added a product to cart.

Here’s how it works for shoppers:

  1. They browse your website, scrolling through your bestsellers and maybe even adding a product to their cart. 
  2. They leave your website without buying anything. 
  3. They start seeing your retargeting ads while reading an article, scrolling Facebook, or watching YouTube videos. 
  4. They remember the awesome stuff you had in your store, return, and purchase something.

By showing relevant, targeted ads to interested customers, retargeting raises brand awareness and increases conversions. Moreover, you can run them with automation, so your ads work in the background while you focus on other aspects of your business.

Why is retargeting beneficial? 

Some 96% of people who come to your website are not ready to buy. Retargeting campaigns are kind of like dating: you don’t meet someone for the first time and fall in love. Sometimes it takes a few interactions before you commit to them. 

A retargeting campaign is an effective way to win back potential customers. It has several advantages, including: 

  • Easy to personalize. Retargeting ads are based on past interactions a customer has with your brand. You can pull information like products visited or added to cart and include it in your ads. They also let you target people relevant to where they are in your marketing funnel
  • Increases order rate. Marketers using three or more channels in any one campaign earned a 494% higher order rate than those using a single-channel campaign. Retargeting ads are part of a successful omnichannel marketing campaign.
  • Precise targeting. By segmenting customers based on their behaviors, you can deliver more relevant ads with higher click-through rates and conversion rates. In any market segment, you’re targeting people who are already familiar with your brand.

Retargeting ads are shown to people who have already visited your website. These ads are intended to entice them to come back to buy your product.

Daniel Patricio, founder of Bull and Cleaver

The difference between remarketing and retargeting

Retargeting and remarketing campaigns are often used interchangeably. However, they are two different strategies with separate goals and channels. 

remarketing versus retargeting

Three retargeting strategies

Product page

Goal: Capture attention, encourage conversions.

Product page retargeting is the simplest way to profit from your advertising efforts. It involves getting people who’ve visited your store and looked at actual products back to buy them. 

These ads work better in shorter windows. For example, if someone visited a specific page in the past three days, they are more likely to buy versus someone who visited in the past 30 days. 

The product page retargeting ad below, by skin care brand BOOM! by Cindy Joseph, has a few key elements that grab viewers attention:

  • Compelling text. The ad tells readers about what’s going on below. It also features a customer review and highlights key ingredients the viewer values. 
  • Square image. A square image takes up more room on mobile than rectangular images, which can stop someone mid-scroll. 
  • Call to action. BOOM! by Cindy Joseph pulls relevant information from the previously viewed product into the call-to-action box, with a Shop Now CTA button to encourage clicks. 

retargeting ad example by BOOM

The more recently someone visited your site, the more likely they are to buy. 

Homepage and collection page

Goal: Remind shoppers you exist, build brand affinity. 

One common retargeting strategy is showing ads to people who’ve visited your homepage or collection page. These ads are different from product page ads because the viewers have never seen a product. 

You don’t want to focus on product benefits with homepage or collection page retargeting ads. Instead, you want to remind them that you’re a great brand to do business with.

These ads are beneficial because they:

  • Remind potential customers that you exist
  • Build trust by letting potential customers know other customers love buying from you (“social proof”)
  • Make them feel good about your brand
  • Show off your products and compel them to click
  • Have a strong call to action

Look at how BOOM! By Cindy Joseph approaches homepage and collection page ads. Firestone explains how the ad is, “focused around social proof and how other customers like us, and we’re worth doing business with or we’re worth considering because there’s a whole bunch of people who think we’re cool.” 

boom retargeting example 2

One of the most powerful things you can do as a brand is remind people that you share similar viewpoints to them.

Ezra Firestone, CEO of BOOM! By Cindy Joseph

Add to cart

Goal: Recover lost sales. 

Cart abandonment is a huge challenge for ecommerce entrepreneurs. According to the Baymard Institute, 69.82% of people will put a product in their cart, but not check out. People who add items to their carts have strong intent to buy, so you want to recapture those sales.

Cart abandoners are a great group to retarget because they are far along in your conversion funnel. Sometimes all they need is a nudge and an incentive, like free shipping or a discount on their abandoned items. 

We want to get them [cart abandoners] back. We don’t just want to get them back to any old product page. We want to show them the actual products that were in their shopping cart when they abandoned. We want to retarget them with the products that they actually have added to the cart.

Ezra Firestone, CEO of BOOM! By Cindy Joseph

Retargeting tips 

To help you get started, we spoke with two experts about the hidden value of retargeting and how to set up your first campaigns. Brent Stirling, who runs growth at Carbon6, and Reza Khadjavi, who is the co-founder of performance marketing agency Shoelace.

Use ads to build audiences

When you want to encourage people to buy from your store again, it can be easy to focus on that singular goal: Get more sales. 

However, there’s a lot you can do to retarget your buyers earlier on in the purchase process, and both Brent and Reza recommended thinking of ads in the context of your entire marketing strategy.

“One way to keep people engaged after a purchase is to show a retargeting ad that encourages them to opt-in to your newsletter,” says Reza. “You’d create a retargeting ad that says something like, “Hey, here’s all the cool stuff we send out in our newsletter. If you subscribe alongside the 50,000 other people on our list, you’ll get access to all this cool stuff.”

There’s a lot you can do to retarget your buyers early on in the purchase process.

You can easily identify everyone who has completed an order if you have a Facebook pixel on your site, with no need to rely on the email address they used to complete their purchase. From there, you can set up a Facebook ad reminding them that your newsletter is a great way to stay in touch.

“Don’t always feel the need to get somebody to buy something,” advises Reza. “You can use a retargeting campaign to get them to sign up to your email list, because then it’s free for you to reach out to them anytime you want.”

However, you’re not done once that customer is signed up for your list, since they’ve yet to hit Buy Now on their second order.

Think beyond the inbox

Even as your email list grows, it’s not a magic bullet on its own. Reza has seen firsthand that email marketing works best when working in tandem with a retargeting campaign, and strongly advises using them together to build more effective campaigns.

“Email is always a great channel,” says Reza, “but even when people have opted into your list, sometimes your emails wind up in the Promotions tab, and people won’t see it.

“Even when people get the email and open it, there's a lot of value in reinforcing that message through retargeting. Because they might see the email, but they're on the go and they forget to act on it. If you’re retargeting them, later they might see a video ad on Instagram that has the same messaging as the email and say, ‘Oh right, I knew I wanted to buy that.’”

Pairing these efforts is what’s known as a multi-touch campaign, where you communicate a consistent message to a target customer across different touchpoints. If you haven’t run a paid ad before, you can simplify your first retargeting campaign by taking the following steps (or using Shoelace, which automates this process for you).

  • When you’re sending an email campaign, translate the content to fit the format of a Facebook or Instagram ad.
  • Set up your new ad to run just after the email goes out and test out how it performs to different target audiences.
  • If you want to hit just your email list with a retargeting ad, you can upload the list of emails to your ad platform, and if they use the same email in both places, you can show the ad directly to them.
  • You could also target the ad to all previous purchasers if you’re using a Facebook pixel.

Start small, and know your margins

Your best source of learning will come from getting some skin in the game and actually running a few ads. That’s why even seasoned pros will start small to test the waters when they’re running new campaigns. Brent advised starting with an understanding of your profit margins to make sure you’re not going over budget.

“There are a lot of variables when you run Facebook ads,” says Brent. “Starting out, be sure to set a small daily or lifetime budget with conversions as the objective. A lot of marketers will also set a bid cap per conversion, but doing this requires knowing what your margins are. If your average cart size is $60, what are you comfortable spending to get that order? This can take a bit of time to figure out the sweet spot—you want to maximize conversions without overspending to get them. Maybe it's $10 per conversion, maybe it's $20. Each retailer will be different.”

Your best source of learning will come from getting some skin in the game and actually running a few ads.

To put Brent’s advice into action, it’s time to take a look at your business’s budget to understand your profit margins. In simple terms, your profit margin is your sale price, minus all of the expenses you incur to produce the product. That can include:

  • Fixed expenses, like your internet, hosting, and cellphone bills
  • Variable expenses, like the cost of materials to create your products
  • One-time expenses, like a laptop or camera

When you start running paid ads, you’re adding a variable expense to the mix. It’s important to know your numbers ahead of time so you ensure you won’t be selling at a loss.

There’s no quick-and-easy way to find your profit margins without first knowing what’s happening with your business’s money.

How to create an ad retargeting campaign

Setting up a Facebook retargeting campaign is easy with a Shopify store. You can create an ad campaign in Shopify for dynamic retargeting ads after you’ve set up Shopify's Facebook channel and synced your products to Facebook.

setting up retargeting ads in shopify

Here’s how to set them up:

  • In Shopify, go to Marketing.
  • Click Create campaign.
  • Click Facebook dynamic retargeting ad.
  • Enter a name and the ad text for your activity.
  • Set the budget.
  • Set a start date and time. You can also choose to set an end date and time.
  • Click Publish activity.

There are also a few apps available to help you run and optimize retargeting ads across Google and other social media sites. 

Ads are a powerful tool to convert repeat customers

Once someone’s already purchased from you, they know your business and your products, so you’re not starting from scratch with your digital marketing. Even if those customers aren’t on your email list or following you on social media, retargeting them using paid ads can be a strong way to keep them engaged and earn that second (and third, and fourth…) order.

Retargeting FAQ

What is retargeting and why is it beneficial?

Retargeting is a paid ads strategy that allows you to show ads on different platforms to people who have already visited your website, as long as you have the right tracking mechanisms in place. Retargeting ads offer precision targeting and high ROI, and can be automated.

How can retargeting be used in marketing?

You can choose to retarget based on what someone has done on your site, including viewing a product page or abandoning their cart. You can use retargeting ads through any stage of the conversion funnel to encourage potential customers to return to your website and take action.

How do I retarget my audience?

  • In Shopify, go to Marketing.
  • Click Create campaign.
  • Click Facebook dynamic retargeting ad.
  • Enter a name and the ad text for your activity.
  • Set the budget.
  • Set a start date and time. You can also choose to set an end date and time.
  • Click Publish activity.

What are 3 retargeting strategies?

  • Product page
  • Homepage and collection pages
  • Add to cart