Approximately 2% of Internet users will convert in some manner on a website during their first visit. This means that just 2% of visitors purchase or download products, create user profiles, fill out a form or submit personal information during their first visit to a company’s website. To entice the remaining 98% into coming back, many successful businesses implement retargeting and remarketing techniques.

What is Retargeting?

Retargeting is a marketing technique that aims to attract consumers who have previously visited a business’ website by showing them relevant banner ads on display networks across the web. Only users who have visited a particular website are exposed to its retargeting advertisements. Because they have already been exposed to that particular business or brand, consumers are more likely to re-visit and convert if they see its ads while browsing the web.

This strategy is thought to improve online sales by maintaining brand awareness in Internet users. Each time a consumer views a retargeting ad, the company gains more recognition, which increases the likelihood that a user will convert.

What is Remarketing?

In 2012, Google Adwords launched remarketing, a strategy that is specific to the Google Adwords display network. Although remarketing is specific to that network, the retargeting approach is behind the strategy. The term “remarketing” has confused many marketers and it is often used interchangeably with retargeting. In terms of strategy, however, the two techniques are essentially the same.

How Does Retargeting Work?

Retargeting utilizes a cookie-based technology that uses a short and simple piece of Javascript code to anonymously track Internet users after they visit a company website.

A website places a tiny, unobtrusive piece of code on their company page. This is often referred to as a pixel and does not interfere with the current customer browsing experience or site performance. As visitors enter pages that contain this pixel, they are added to the website “audience” and a cookie is added to their browser from the pixel. After audience members leave the website, they are shown the business’ ads on other sites in the display network the business uses to run its retargeting ads.

If a member of the company’s audience converts, a “burn pixel” is activated and eliminates them from the not-yet-converted retargeting audience. Businesses have a good deal of control over who views their ads. They can choose to add various pixels to show visitors different ads after they convert, or they may alter the list of websites that display their ads.

Retargeting has proven to be an effective strategy regardless of audience size, but small and growing businesses would be wise to start growing their audiences as soon as possible.

Regarding practical applications for retargeting, there are many conversions that can occur when a previous website visitor is lured back to the company page. Below are examples of different effects retargeting can have on consumers and the types of ads that cause them:

  • AwarenessAds with a brand logo and product/company name keep the company fresh in visitors’ minds.
  • Interest: These ads contain a specific product the user has viewed, which is intended to motivate them to purchase.
  • Evaluation: Users may have left a website with lingering questions, which can be answered with well-positioned evaluation ads.
  • Decision: If visitors left a website without converting, they may see decision ads, which offer special promotions or discounts if they act quickly.
  • Purchase: For consumers that have already bought products, purchase ads show items sold by the company that are similar to their recently purchased items.

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