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What is Retargeting and How Does It Work?

Posted by Guy Falkovitch

on

December

31,

2013

What is retargeting

It is a familiar scenario for online entrepreneurs. A person visits your website, spends some time there, but then leaves without taking the desired action. In most cases, the desired action is a purchase. There was a time when there was no way for online businesses to pursue lost customers. It could be possible that the person left your website suddenly because his/her internet connection broke down. Just because a purchase was abandoned does not mean your competitor took away your sale.

Yet, most entrepreneurs don’t know how to pursue the visitors who clicked away without taking any action. There is a way for you to get a second chance at convincing the person to buy from you. Sales are the lifeblood of any online business. Receiving a second chance is a blessing. This way, you can ensure that you maximize your sales and make the most of your online storefront. The technique you have to use for this is known as retargeting.

Retargeting Chart

What is Retargeting?

Retargeting is a term not many internet users are familiar with. Yet, if you own an ecommerce business or operate an online storefront, you have to understand the concept of retargeting and how it works. Talking conservatively, retargeting can boost your profitability considerably. You can only benefit from retargeting if you know what it exactly is. Retargeting is also referred to as behavioral retargeting and remarketing. As the name shows, you have to retarget your target audience with this technique.

But why does the need to retarget arise in the first place? You might wonder that since you are putting considerable effort into getting people to visit your online store. So, there shouldn’t be any need for tracking them once they have left your website. The issue here is that a very small number of visitors directed to your website will actually make a purchase. According to some experts, the number is as low as 2%. This means that 98% of the traffic you generate does not translate into sales.

As an entrepreneur, this is a number that can be quite worrying. After all, if only 2 out of every 100 visitors to your website are buying something, you cannot realistically expect a boost in your sales and revenue. A common example is that of the abandoned shopping cart. A person comes on to your website and starts adding items to the virtual shopping cart. To an observer, it may seem as though the visitor is preparing for a shopping spree.

Then, without any warning, the cart is abandoned and the user disappears. Before you despair yourself over the lost sale, you should know that there is a way for you to recapture the visitors who abandoned their carts. That method is retargeting. Since the person you are targeting with your ads this time has already been on your website, it means that he/she is genuinely interested in what you have to offer. More often than not, the reasons for abandoning the cart aren’t as sinister as you might imagine.

So, why give up on the 98% visitors who depart without buying anything? Retargeting may not result in 100% sales but you can surely improve the number. Even a difference of 10% to 15% could have a huge impact on the bottom-line. After all, that is what counts. Therefore, you shouldn’t give up just because your visitors aren’t performing the action you want them to. You can get them back to your website and have a second chance to get them to perform that action.

How Retargeting Works

Let’s take an example here. You might have experienced this: you visit a website and after you leave, you get to see ads related to it all over the web. This is exactly what retargeting is all about and what you should be doing. If a person leaves your website after spending some time there, it is a clear indicator that he/she is interested in something. Whether that is making a purchase is a different thing altogether. But, it is reason enough for you to retarget that person.

This is where retargeting comes into the picture. 85% people make their purchases online. So, there is little doubt that a large percentage of your target audience is using the internet to find what they are looking for. If you don’t target them online, you will miss out. This makes understanding how retargeting works all the more important for you. All retargeting takes is to add a piece of JavaScript code into the fabric of your website. That is all you need to do. From there on in, the code does the rest.

When a visitor comes on to your website, a cookie is deployed through the code on to his/her browser. After that, the ads related to your business are shown to that visitor on the websites he/she visits after clicking off yours. Since the person only recently visited your website, there is a good chance he/she would be influenced by the ads being displayed over the internet.

Relevance is a major factor in retargeting. The fact that the people you are retargeting recently expressed interest in your website is the reason why this method has proven to be so successful. Most marketers believe that retargeting offers the highest return on investment (ROI) of several online marketing strategies. Not to forget that it gives you the chance to recover lost sales.

The process of retargeting is quite simple. The marketer doesn’t even have to know who they are targeting. The anonymity is another factor which contributes to its effectiveness. People aren’t intimidated or skeptical about banner ads as they are of emails and other means of online targeting. This is why there is a greater chance of success when you use retargeting.

 

Retargeting or Stalking?

An important question in this regard is whether retargeting is akin to stalking. You are going to be following your visitors around the internet, albeit virtually. The answer to this is a loud and clear ‘NO’. You aren’t trying to intimidate anyone into making a purchase. Your ads are going to do the job for you. Since the use of banner ads is involved, it is marketing, plain and simple. If you are concerned about invading your customers’ privacy, they won’t mind if they are interested in what you have to offer.

From a business perspective, it is important that you limit the extent to which you target someone. Don’t bombard them with messages related to your business. That is something that drives targets away. Some businesses have been guilty of overdoing their retargeting tactics. They virtually try to goad the person into buying from them. This is not the way you are going to generate loyal customers for your business. You have to be decent and respect their privacy.

Coming back to the point, retargeting is poles apart from stalking. In fact, mentioning the two in the same breath is wrong. They are two different things. One is acceptable, the other is not. So, if you are feeling guilty (some entrepreneurs do) about pursuing lost customers, don’t. There is no need to. The personal data of your customers is not required or collected for retargeting. Make the most of retargeting so you can maximize your sales and enhance your business’ profitability.

 

 

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