How to Spend Your First $100 on Retargeting Ads

May 21, 2014 - Get free updates of new posts here

Have you ever wondered how the hell Zappos can show you ads about the shoes you looked at a few days ago? Or how you can continually see my face all over the internet after you visit Monthly1k.com?

Retargeting can be one of the best ways to attract the right customers and capture additional revenue. Even if you haven’t done much paid advertising, it’s easy to get started.

(For those that already know what retargeting is and how to set up a campaign, skip to the bottom where I share some advanced strategies)

For everyone else, buckle up to learn more about retargeting, how to get started, and exactly how to spend your first $100 successfully on retargeting.

What is Retargeting and How Does It Work?

Retargeting assumes that when someone visits a product or site that they have some level of interest in it, and that if they are shown that same product or site again through an ad and they click that ad they will likely buy the product or revisit the site.

In fact there is psychological principle called the “mere-exposure effect” which states that you prefer the things that you’re familiar with (ht @tommyismyname).

TV ad frequency has been playing on this principle for years, and it’s the real reason why it’s so effective. When you see the same ad on TV 1,000 times, they are banking on the fact that you’ll be so familiar with the company or product that you will naturally like and trust it more.


AppSumo’s Retargeting Profit v. Cost

 
For most sites, more than 90% of visitors visit and leave without converting or buying.

So how does it work?

When someone visits your website, you add a cookie to that person’s browser and as they open new sites and pages advertising exchanges across bid on showing more advertising to that specific person.

The key to retargeting is it is MUCH easier to advertise and sell to people who already like you vs. brand new customers.

Which are you more likely to buy?

A pair of shoes you searched for, read about, and then see again online as an ad.

OR

A pair of shoes you have never seen before that appears as an ad.

The key difference between retargeting and regular advertising is you already KNOW that the customer is interested at some level.

Types of Retargeting Ads

We’ve had the exact same Monthly1k ads for over a year now. There are 3 types of ads I’d recommend creating:

1: Direct Purchase. Direct image back to your product purchase page. Ours goes to Monthly1k

Direct Purchase

2: Free. Free product related to your main product. For us, we promoted a free validation cheat sheet.

Something Free

3: Content advertising. Promote an ad to a helpful article that also promotes your service. Here’s the article about how AppSumo was started for $50.

Content Advertising

All have worked equally well. I’d encourage you to start off with #1, direct purchase since it’s easier to try to get people to buy vs distracting yourself with creating free things or writing content. (Just be sure to have set up ways to capture email addresses.) Also, my face and name is plastered all over these advertisements because we found that a face and name converted better than just a product.

The 5 Most Popular Places for Retargeting on the Web:

1- Facebook newsfeed:

1 Retargeting Facebook Newsfeed

2- Facebook sidebar:

2 Retargeting Facebook Sidebar

3- Google Image Ads:

3 Retargeting Google Image Ads 
Seen on YouTube and 3rd party websites

4- Google text ads:

4 Retargeting Google Text Ads

5- Twitter feed:

5 Retargeting Twitter Feed Ads

At AppSumo, we’ve seen the most profitable ads on:

1- Facebook sidebar ads

2- Facebook newsfeed ads

3- Google Image advertising

We have not seen profitable ads within Twitter, so I won’t cover how to set them up. (Also if you’re wondering, we don’t do text ads—all of our ads contain images.)

Before showing you exactly how to get started, let’s look at the basics of how I’ve set up my retargeting campaigns:

Noah’s Retargeting Campaign

Who I use and why:

I use Perfect Audience (includes $60/credit for a trial) because it’s harder to do retargeting inside Facebook via Google’s retargeting (they call it remarketing). Perfect Audience can do both FB and Google. It uses the same pixel so that you only have to set it up 1x.

Advertising tip: Other retargeting companies are the same. If you are spending over $1,000 a month, go to your advertising company and mention you’re considering using their competitor: AdRoll or Retargeter (both good companies) and the company will likely reduce their margin for you. : )

Also Facebook has it’s own new Website Custom Audiences feature, but I want you to start today—and the easiest way to do that is through Perfect Audience.

A good benchmark for retargeting ROI: 200%

That means for every $1 you are spending you are making $2. Why 200%? No particular reason, but it feels good to double your money. Too high means you might be missing out on volume. Too low means you aren’t making enough money.

Here are the latest AppSumo numbers:

6 Retargeting ROI Example

We spent $4,168.19 and have made $9,365.00. That’s a 224% ROi. A bit above target! Woot!

You should always aim for 200% ROI. This may seem high, but if you follow the guide below you’ll have the knowledge to reach it. You are wasting your time and money if you can’t reach 200% ROI.

I use a retargeting campaign when:

1- People visit AppSumo or Monthly1k, but don’t purchase a product

2- We are doing a time limited product launch.

3- Growing an email list and getting a customer’s email address

Getting Your First Retargeting Campaign Started

Step 1: Create ‘Launch New Campaign’:

7 Launch a New Retargeting Campaign

Step 2: Create your Remarketing list (the people who will see your ads)

1. Name your list FBx (so you can separate out FBX vs newsfeed ads) – Ad group

2. Leave blank so you can always have the people in your retargeting list

3. Add a * so it’ll show on every page on your domain e.g. http://okdork.com*. (Or if you’re targeting a specific page you can add * after the url to act as a wildcard. This way tracking will work on a url wether is exactly okdork.com/about or has trailing okdork.com/about/?src=buffer.) You can exclude people who’ve visited a confirmation page or buy page. I’ll show you how to do just that later.

8 Create a Remarketing List

 

Step 3: Add/Paste a Site Tracking Tag in the Header or Footer File.

9 Site Tracking Tag for Retargeting

 

Create a Facebook Retargeting Campaign:

Step 1: Choose the List to Include (and Exclude)

Caution: If you WANT to exclude people who’ve bought or only retarget people who’ve visited a certain page. Go back to:

Retargeting Excluding 1

This is how you can Exclude people who’ve visited a certain page.

Retargeting Excluding 2

These are the lists I want to include and the group I want to exclude.

Targeting Window: This means showing your ads to people on your list who’ve visited your site in past X amount of days. Personally I recommend 30 since if people haven’t taken action within that time period I don’t think they will.

Geo targeting  & Dayparting: Please ignore for your first campaigns. You can find more about these in the advanced strategies PDF at the end if you’re interested.

Step 2: Spend $75 on Facebook Sidebar retargeting ad

An ad in a Facebook sidebar will get shown way more often versus a newsfeed ad. Remember, repetition and frequency are your best friends in retargeting.

Facebook Sidebar Ad1 - RetargetingTitle: How Noah Kagan did it (How your product or company made or will make a person successful)

Image: Me (We found photos of people convert higher than other images)

Body: I worked at Facebook, Mint and started AppSumo. Want to start your own business? Let’s go. (Bold claim with call to action)

Tip: If you don’t have a banner or a designer handy, I recommend Right Banners, Thenounproject or Swiftly.com.

Step 3: Spend $25 on 1 newsfeed ad

Facebook Newsfeed Ad

Sidebar FB ads have been our best ads because, unlike the newsfeed ads, they are shown more often. In the advertising world that’s called frequency. And with retargeting it generally takes a decent number of impressions to finally get someone to click and take an action.

Even though you can do Google (web) or Twitter retargeting, they have converted less over the past year for me and this article’s goal is to set you up as easily as possible.

Should you exclude people who have already bought my product or service?

There are two camps of psychology about advertising to existing customers:

1. Reinforcement: Some people get buyer’s remorse. By continuing to show ads about your company or your product, you can reinforce a the decision the customer made.

2. Exclude: After the customer has bought, save your budget just for new customers who have not bought yet.

I am a fan of camp #1. However, I only show ads to people who have visited the site in the past 30 days. As you develop additional campaigns, Aaron Zakowki recommends creating different lists for customers so that can you can create specific and different messaging after they purchase.

Campaign, Pricing and Scheduling

Retargeting list started, Check.

Ads created, Check

Now it’s time to get them live.

Step 1: Create a New Conversion Goal

Create a New Conversion Goal

Conversion Name: Name it

Conversion Type: Add the url of the “Thank You” or other confirmation page a customer visits once they’ve purchased

Revenue Value: Self-explanatory 🙂

Conversion Counting: Count every conversion

Since your retargeting pixel is on every page and you’ve listed above which page is the conversion you DO NOT need to add another pixel or do more work.

Step 2 : Set a Weekly Budget

Since you are doing 30 days, commit $75 / 4 = $18.75 as your weekly budget for the FB Sidebar ad.

Campaign Schedule: Run it continuously starting today

Bidding: To start, let it be optimized. What this means is they’ll figure out what you need to pay per click to start actually getting clicks. In the advanced section below I’ll share some strategies about how you can be more effective with this. In the beginning, set it and forget it.

Note: You will need to create 2 campaigns. 1 for your Facebook retargeting (sidebar) and 1 for your Facebook newsfeed.

Put in your credit card and you are ready.

Retargeting Campaign Optimization

I like reviewing campaigns on a trailing 30 day basis. Because of holidays or fluctuations of traffic, 30 days provides a pretty good amount of data to make changes to your campaign. 7 days is too short.

Tip: After 7 days, put the performance percentage in your campaign name. That’ll help you have a baseline for the next time you revisit your campaign performance. I also auto-schedule in my calendar a weekly review of my ads so I don’t have to actively think about them as much.

Here’s exactly how to optimize a retargeting campaign:

Step 1: Look at spending for all campaigns over the past 30 days

All Campaigns over 30 Days - Retargeting

This helps me see if I’m completely sucking or on track with my 200%+ target. Whoo, I am.

Step 2: Break it down into specific campaigns.

You can do this by clicking on the little graph icon (1). Then compare your cost (2) and profit (3). For this campaign we are at 538% ROI which is awesome!

Campaign Optimization Step 2

Example: Let’s say my ROI Profit / Spent is 150%.

Optimizing Example 1

This campaign is not meeting my target goals and #s:

1. So I click edit on the campaign

2. I take what the current CPM in the top left is:Current CPM

3. Then I figure out what that eCPM  (effective cost per thousand impressions) needs to be at to get to 200% ROI.

Stupid math: 

$3000 revenue | $2000 cost | $.52 eCPM

Need cost to be at $1,500 for me to have my target ROI.

2000-1500 / 1500 = 33% decrease in cost

And 33% less of $.52 (*.66) = $.34

So I click edit campaign and change to manual bidding to $.34

Optimize to Manual Bidding

Then my cost should get me the ROI I want. Hoozah!

Next Steps for Retargeting Ads

Warning: People who are coming from retargeting DON’T buy right away. Otherwise they would have bought or taken action when they were on your site the first time. Commit at least 30 days to see your results. Some people get impatient and think retargeting isn’t effective. As well, you are only doing $100 so you aren’t losing a ton of money if it all goes badly.

Go to PerfectAudience now and get live then come back and read. If you have a blog and want more subscribers, you can do retargeting. If you sell products, you know this will help. Most sites only get 2% conversion rate so you had 98% of your people leave to never be seen again. Don’t let that happen. Noah cares 🙂

At this point if you’ve never setup retargeting, do it today. It should be one of the best channels you have for increasing your business.

Click here to download 10 Advanced Retargeting Strategies

You’ll get:

  • Direct Marketing
  • Front-Loading
  • Cookie Dropping
  • Reverse Engineering Your Profitable Traffic
  • Optimizing Your Retargeting Window
  • …and more…

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66 responses to “How to Spend Your First $100 on Retargeting Ads

  1. Alex French Reply

    1st, this post is so informative and something we’ve been waiting to learn about. great that we’re learning it from you. 2nd, bit amusing to see your face all over this post, esp. your funny expressions. 3rd, i hope you wrote this while having our coffee. LOL. thanks again, Noah!

  2. Clark Hetherington Reply

    WOW, its amazing how some things come at just the right time, this is just what I needed to read right now Noah. Thank you for all you do buddy, Much love from Ireland

  3. Jay Patel Reply

    Oh my.. I’m lucky that I subscribed to your blog. This is an epic post, Noah. Perfectly written for the newbies like me.
    It deserves to go in my pocket for the later reading.

  4. Andrew Kingston Reply

    Just what I needed. I’ve done some retargeting with Google Adwords and have been planning to use Adroll but never even heard of Perfect Audience so this is excellent! Thanks again Noah.

  5. Joel Reply

    Retargeting has always been a rabbit hole to me. I’m hesitant because of the money however everywhere I read it says it’s the best way to generate leads… I’ll get there, thanks for the roadmap.

    1. Brad Flora Reply

      Joel, Perfect Audience offers a “Retargeting 101” webinar every Thursday that you should totally check out. Signup for a free PA account and we’ll send you the info for it.

  6. Nick Reply

    Thanks Noah, great content. I’m new to paid advertising and this was a really useful article. I heard you on Lewis Howes podcast and was really impressed so signed up to your list, which has paid off with just this one piece of valuable content.

  7. Heidi Reply

    Awesome sauce….!
    Thanks Noah.
    Please expound on Cookie Retargetting on other peoples websites…this is EXTREMELY powerful since you can only target ACTION TAKETS (thank you pages, confirmation pages, download pages).
    Are the cons/cpc still low/affordable? Thanks again!

  8. Ray Noppe Reply

    You absolutely rock. This is an amazing tutorial. Remarketing and display network is our two best quick routes to market at the moment.

    We have been battling with Boogle remarketing and their poxy tag. Run the campaign for a few days and then google pauses the campaign cause it can’t see the remarketing tag anymore or all of a sudden you are missing custom params etc etc. As for Bings re-messaging service: Urgh.

    We just tried this and got it up and running in under 20mins. Neat. Took us almost a day to setup Google the first time.

    Keep up the great work.

  9. Sal Coombes Reply

    Question Noah … if a user who is on the retargeting list comes back to the site NOT via a retargeting ad (such as direct or email) and they purchase, would this be considered a conversion as part of the retargeting campaign? Or do conversions only include those who clicked via the retargeting ad?

    Scenario to explain… “Susie” is looking at flights on flights.com. She does not purchase right then. Ads retarget her. She comes back to the site 10 days later (via direct, not ad) and purchases. Many companies would attribute this to the retargeting campaign… but she would have booked regardless.

    Hope that makes sense as you always misinterpret my questions. Thank you 🙂

    1. Ankit Reply

      Yes, the retargeting ads will take the credit based on the attribution. Most ad platforms follow the last-click model so if they clicked/saw your ad but converted organically within the conversion window, the retargeting campaign will take the credit.

      The way to get around is to rely on analytics data instead of the ad platform data to evaluate the real impact of the campaign. Multi-channel attribution would give you a better picture of the conversion funnel and based on historical data as well as intution, you can define a custom attribution model

      1. Brad Flora Reply

        Attribution is super tricky. Perfect Audience does follow last-touch, but we also

        1. Let you set an attribution modifier to set a % of click and view conversions you want to count

        2. Let you adjust your conversion windows so you can rule out conversions where the touch happened too long ago for your tastes

        3. Offer a kickass “Conversion Explorer” that lets you browse all the log level data we have about every single conversion we record for you. You can download this data and compare it alongside data from any other tools you might be using.

        We feel that by giving marketers control and transparency, we can help them build the attribution model that works for them.

        1. Ankit Reply

          Completely agree Brad, attribution is a tricky beast. And my comment was by no means to highlight lack of a feature in PA 🙂 It is just how ad networks work and the onus is on the marketer to check the analytic to make better informed decisions.

    2. Aaron Zakowski Reply

      Hi Sal,

      That’s a good question. And a little hard to answer.

      In the case you describe, most analytics software like Google Analytics will not attribute the final sale to the retargeting ads because, the visit that resulted in the purchase was not from a banner click.

      However, it was be wrong not to attribute value to the banner ads that the customer saw all over the web. No doubt this was a large contributing factor that assisted the sale. But due to the fact that there was no click on the retargeting ads, there is no way that any analytics software can track or value those ads.

      I hope this helps answer your question.

      Aaron

  10. Uri Reply

    The OkDork isn’t very identifiable (simple font, like many other logos) but your image is (atypical hair style and pink shirt). Do you think with some tweaks using your logo could be as effective as using your image in ads? Very nice post – thanks!

  11. Ankit Reply

    Great walkthrough! The two points I have to make are,

    1) Frequency: As a consumer, I dont think I buy the “reinforcement” approach. You throw too many ads at me too frequently and I am frustated enough to “hide/block” the ad. As a n advertiser also, I have seen that frequency capping produces better results than running wild.

    2) The CPM optimization that you talked about while good in theory I dont think works for real. With a lower CPM, the number of times my ad shows and the position where the ad shows reduces drastically. So no way I can expect to hit the same ROI goal. Would love to know if you did see the campaign ROI hit the target after decreasing the CPM

    1. Noah Kagan Reply

      The reason I discouraged this is to help people from adding 1000 pixels to their sites. With an aggregator like Perfect Audience , Retargeter or Adroll you only need 1.

      1. Tim Reply

        Noah, if you were only targeting FB though, FB (with power editor) and targeting as you’ve described above, would be ok, yes (not to detract from PA).

  12. Sean Oliver Reply

    One small note, this retargeting described above can only be used once you’ve had 1000 unique views. Now this may not be an issue for some, just wanted to call it out.

  13. Amir Anzur Reply

    Amazing insights. You are one sharp cookie so good to read from you. I was thinking if you had gotten your .1% of facebook you probably wouldn’t have had to work so hard and learn from your own experiences which you now share with the world. Frankly, I haven’t read any of the facebook employees that cashed out but read your stuff which really helps me in running my own business. Thanks for doing what you are doing – much appreciated!

    Amir Anzur
    Dean, Webpreneur Academy
    London

  14. Tim Reply

    Can I summarise: (i.e. is this correct?)

    Using targets #1 (people who visit but don’t buy):
    – we add a pixel/cookie to our site, so if they visit, but don’t buy: we’ll know
    Q1 : how will you know if they don’t buy (if I am using, for example, Gumroad, Selz or DPD cart?). You mention excluding pages — what if the thank you page is inline (Gumroad Embed or Overlay)?

    – we retarget/remarket to this people subsequently, on FB and wherever, with the aim of breeding familiarity: where should these retarget links go: back to the sales page?

    Is that basically it?

    Q2 (well, Q3 really): if you want to drive traffic to mailing list, you’re simply driving them to a lead magnet page?

    Sorry if these q’s are wacky, I am a PPC newbie.

    1. Xu Reply

      I have answer for Q1.

      You can use the JS API to track the buy button event.
      This way, you can tell if user is purchasing or not.
      Create a conversion type using JS event in Perfect Audience.

      Feel free to contact us if you need any further help.

      Cheers.
      Xu

  15. Perry Paolini Reply

    Noah, great post. I find myself buried in tips and tricks for getting new clients. The reason I love posts like this is because it is actionable and trackable!

    Do you see value in building an online and social presence through blogging and tweeting before running these adds, or should this be a high priority action item for me. Even with a website no visitors.

    Thanks!

  16. Wenzel Reply

    Once again, great article. What would you suggest, to start out advertising a website right away, or build some audience before spending money on ads? Until now I’ve grown all websites without ads, but I guess in this niche it’s going to by tougher, that’s why I am considering to buy some ads.

    1. Xu Reply

      In this case, you can use the JS API to track the buy button event.
      Create a conversion type using JS event in Perfect Audience.

      Feel free to contact us if you need any further help.

      Cheers.
      Xu

  17. Lenny Reply

    Awesome stuff Noah. Many thanks for the detailed walkthrough.

    Can you elaborate on point numero 3 from the pdf? I can’t seem to find anything about it elsewhere.

    Gracias

  18. Max Francisco Reply

    Hey dude, I like your stuff! I do have a question though that might raise some comments: why do I see from time to time the same ad(image ad usually) side by side on the same website? Why would Google show the same ad side by side? I mean one is enough by page.
    And how long should the retargeting exist for an unique user? If the user has already seen the ad and didn’t click, what makes one think he is going to click it?
    I feel chased and I just go and clean my cookies!
    Maybe that’s me thinking as a marketer and not as an end user (I do like seeing different ads when I’m browsing). Comments are welcome! Thx

    1. Maurício Reply

      Probably because you are seeing Remarketing from different campaigns. Ex: one from Criteo and other from Google. This is also something very tricky, you need to find the best equation in terms of remarketing partners to avoid wasting money.

  19. Ben Reply

    Nice work Noah! I second the latter part of the article about establishing expectations as it pertains to direct revenue attributed to retargeting. I found that using some sort of hack or platform for tracking multi-click attribution to realize the value of campaigns was tremendously helpful. I was surprised at what the data suggested, and from that resulted a significant increase in user acquisition budget for retargeting.
    Keep it coming Noah!

  20. Ernie Reply

    I write books for Kindle. I’ve got some fiction and nonfiction stuff out there. Would retargeting ads be something that might produce a positive ROI in that market, or is retargeting something that works better with higher priced stuff. My books are typically only $2.99 with a $2 royalty on each one sold. Thoughts?

    1. Tyler V Reply

      Most retargeting costs ~$1/lead so it might be tough to justify that. You could try increasing the cost of the book and running a retargeting campaign to see if you make more/less.

      1. Ernie Reply

        Thanks for the quick answer, Tyler. I had the same thought regarding raising the price. It seems like there is probably a threshold where items under a certain dollar amount would not see a positive ROI. Although, with Amazon and the way their sales rank works, even getting a slightly negative ROI initially could produce a long term positive ROI. Might be something to toy with.
        When I have run FB ads in the past, I’ve gotten lots of clicks, but few sales. Retargeting might help finish off some of those, and if the price was close to break even, the sales rank benefit and subsequent visibility might be worth the effort.

  21. Jon Reply

    Hey Taco Fans,

    would love to learn more about Cookie Dropping using Perfect Audience. Would be amazing if you can share some useful resources!

    Thanks a ton

  22. Hamayon Reply

    Noah this is an amazing guide for facebook retargeting. Although I am now using facebook retargeting since a while and actually now I am good at it, getting huge ROI but one thing I want to share with you., the things you have shared here in your “blog post” I have paid much to learn these. You are a great man 🙂

  23. Sam Reply

    Thanks Noah,

    I read this around 10 months ago and used it as my reference several times.

    Two remarketing campaigns with Perfect Audience now running due to this blog post!

    Sam

  24. Tom Slater Reply

    Thanks for an easy to understand intro to re-targeting. It helped break the mental gridlock I get into when trying to implement new (for me) technology. I have a question for you though. I downloaded your “10 Advanced Retargeting Strategies” and in it item #3 says “you can put your
    retargeting pixel on other people’s websites”. Is this really possible? Can Perfect Audience do this?

  25. Josh Meyer Reply

    You say “Revenue Value: Self Explanatory”. We’re an ecommerce shop, so depending on what they buy, the revenue value is different. What would I put here? Would average value of a customer work?

    Thanks,

    Josh

  26. Adam Reply

    Hello,

    Great post. I’m wondering: If I drive some traffic to my website using a free method (like let’s say forum posting) and I have Perfect Audience pixel installed on my site and ads setup to run, will those free visitors see my ads all over the Internet after they leave my site? Or, does someone have to click on a PAID ad first in order to be retargeted?

  27. Oladele. Reply

    What better alternative do one have as against Facebook sidebar? Everybody is mobile this days and the news feed is the only probable option one is left with.