Last updated on May 19, 2018
How the hell does Zappos show you ads about the shoes you looked at a few days ago?
Your friend just told you about a company a few days ago, and now you’re seeing their ads all over your Facebook News Feed. What’s going on?
You almost bought something from Amazon, but decided to leave after you put the item in your cart. Why are you seeing ads for 20% off now?
The answer is retargeting.
Retargeting ads are an incredibly powerful marketing tool. These ads can be one of the best ways to attract the right customers and capture additional revenue for your business.
But enough with the explanations. Let me show you what retargeting ads can do:
We spent $4,168.19 and made $9,365.00 from a recent retargeting campaign for AppSumo. That’s a 224% ROI. 💰
In fact, a 2x (or higher) ROI is common with retargeting ads.
What’s even better: it’s easy to get started with retargeting campaigns even if you haven’t done much paid advertising in the past.
Ready to buckle up and learn more? In this guide we’ll cover:
BONUS: My 6-step cheatsheet to epic Facebook ads |
Retargeting ads are served only to people who have already visited your website or those you already have a relationship with (for example, people on your mailing list).
Compare this to other types of ads, which typically just show to anyone you define on a certain website, or within a certain target demographic. In other words, you assume they might be interested in your material, but you’re not sure.
On most sites, 95% of visitors leave without buying or converting (like signing up for your email list).
Retargeting helps you win back these visitors — and turn them into customers, email subscribers, and more.
Diving into Noah’s tech talk time, retargeting works when someone visits your website and you have a retargeting cookie on your website. When your visitor open a new website with ads, the ad will pick up on the cookie and display a retargeted ad.
The key to retargeting is, it’s MUCH easier to advertise and sell to people who already like you vs. brand new customers.
Which are you more likely to buy?
The key difference between retargeting and regular advertising is you already KNOW the customer is interested.
Retargeting ads can be used at all stages of your sales funnel.
To simplify things, there are three main types of retargeting ads I recommend running:
Content ads push viewers to a helpful article on your site. There’s no sale to be made, or sign-up for an email list as your end goal. A good us case for a content ad is if you just published a new blog post and you want to make sure past visitors don’t miss out.
I predict content upgrades will lose effectiveness in 2017.
But for now… they still work pretty well. Today, content upgrades are an effective way to generate leads for your business.
To show you how AppSumo uses content upgrades, check out our free business idea cheat sheet ad below.
Lead generation ads can also be direct links to a free download form for a software trial, or even just a link to your email newsletter subscription page.
No matter how you aim to generate leads, the key is to create something of VALUE for your customer (and help them solve a problem) with your free product or software. 🔑
Direct purchase ads retarget users with the goal of bringing them back to your product purchase page. With these ads, you want to get people to click on your ad and take a next step through your funnel to purchase.
It can be best to target these ads at users you already have a fairly strong relationship with: for example, those on your mailing lists.
Even better, you can offer a percentage off coupon for users who finish their checkout. For example, if a user comes to your site, sees a product, and then abandons your site, you can serve them ads for a discount on the product.
In order to successfully run retargeting campaigns, you first need some data to help you identify who you’re going to retarget. There are two main types of data used in retargeting campaigns:
Pixel retargeting tends to be the most common type of retargeting. Here’s how it works:
I use Facebook retargeting ads on my own site in a few places. For example, check out my newsletter join page.
When you look at the code, you see this snippet:
Anyone who goes to my email newsletter page will be automatically tagged with a retargeting pixel from Facebook. This way, I can serve my retargeted users on Facebook applicable ads.
One of the killer things about pixel-based retargeting is that once your campaign is set up, you can begin to remarket to someone literally as soon as they leave your website.
Top Tip: I’m currently using pixel-based retargeting to grow my email list and seeing incredible results!. When a reader visits OkDork I then retarget them with ads directing to my email newsletter page http://okdork.com/email-newsletter/. This is converting at ~ $1/sign up.
You can also create retargeting campaigns targeting people who are currently on your email list, or targeting email addresses of current customers.
Once you have a list of either your current customers or email subscribers, here’s how you specifically set up list-based retargeting works:
With an understanding of how to target your customers, the next step is understanding where to target your customers.
Using Facebook, you can set up retargeting ads to reach an audience of people who have visited your website.
For example, if you visited AppSumo in the past, you might have seen me making a weird face at you in the ad below.
Here’s a bonus tip: You can even retarget people who take action on your website.
For example, when a user signs up for a content upgrade on one of my articles (like this), I use my opt-in plugin Sumo to fire a Facebook tracking pixel on successful subscribe.
Here’s what this looks like in my website backend setup:
Specifically, the user is redirected to my Bonus page, and the Facebook pixel is fired. This gives me the opportunity to pitch subscribed readers special things on Facebook.
In your own business, you could use this as an opportunity to upsell or showcase additional products or services.
Google uses the term “remarketing” for their Display Network. This is very similar to retargeting on other platforms, like Facebook.
The big difference: Instead of your ad appearing on a specific site (like Facebook), your remarketing ads will appear on any sites that have Google’s Display Network configured.
It doesn’t matter if the site is a massive news site, your local taco shop, or even your own site. If you were on a website with Display Network remarketing, you might see an ad like the AppSumo one below.
To set up Google remarketing for your own business, check out the Google remarketing code instructions.
At Sumo, we’ve seen the most profitable ads on:
(We don’t do text ads — all of our ads contain images.)
Truthfully, we haven’t seen profitable ads within Twitter. But, the capabilities are there and Twitter calls it “Tailored Audiences.”
Here are a few guides to help you get started:
200%.
That’s a good ROI benchmark for retargeting.
In other words, for every $1 you spend, aim to make $2.
Why 200%?
Because it’s been extreme doable in our tests at AppSumo, my tests for this blog, and elsewhere.
For most business owners and entrepreneurs used to the slim margins of traditional advertising, this may seem high. But if you follow the guide below reaching 200% will seem much easier.
I use a retargeting campaign when:
Retargeting current customers is uncommon — but I’ve seen results. Depending on the situation, I follow two philosophies about advertising to existing customers:
When I do an upsell, I only show ads to people who have visited the site in the past 30 days. These customers are most receptive, and it means they’re most likely satisfied.
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.
If I’m setting up retargeting in multiple systems, I like Perfect Audience. Their platform supports different types of retargeting campaigns from one, simple interface (including Facebook) which makes my life easier.
Similar to those of you who use Google Tag Manager as the one piece of code snippet for a bunch of different tools, Perfect Audience uses one pixel for multiple retargeting platforms so you only have to set it up once.
If you’re a beginner, it’s easiest (and least expensive) to focus on setting up retargeting ads directly within Facebook. Here’s how you get started.
The first, and most important, step in kicking off a retargeting campaign on Facebook is installing the Facebook pixel on your site.
The Facebook pixel is a piece of code that you can place on your website to report conversions and build audience segments directly inside Facebook. Here’s a full guide to setting up a Facebook Pixel on your website.
Once you’re in Ads Manager, click the dropdown in the top left of the nav (next to Adverts Manager) and select Audiences:
This is where you’ll be able to specify EXACTLY who you want to target.
Once you’re in the Audiences tab, click the “Create Audiences” → “Custom Audience.”
Next, you need to select how you’d like to create your audience:
Facebook presents you with four options to create your audience. For this post, we’ll focus in on the “Website Traffic” option. (But if you’d perfect to create a list-based retargeting campaign, click on the Customer File option.)
On the next screen you have the option you have the choice five options to create your audience:
I tend to find specific ads work best, so I choose to target people who have visited a specific web page with ads relevant to that page.
For example: I might target anyone who visits okdork.com/podcast with an advert for my latest episode. This is likely to drive many more clicks than an ad targeting everyone who has visited OkDork.
Once you’ve made your choice, click “Create Audience” and you’re good to go and create your ads.
Next, click the big green “Create Advert” in the top right corner of Facebook Ads Manager:
Now, you need to choose one of Facebook’s 15 marketing objectives for ads:
The option you choose here will depend on the type of retargeting ad you’re looking to run:
Choose the one which best suits your goal. If you’re just trying to push eyeballs to a blog post, pick awarness. If you want to push newsletter subscriptions, try consideration. And if you want to sell more of a product, pick conversion.
Next, give your campaign a name and create your advert.
Bonus: For a full guide to create incredible Facebook Ads (and the lessons I learned spending $3 mm on ads), click here.
With you advert all set up, it’s now time to choose the audience you’d like to target. You’ll want to select the audience you set up in Step 3.
To do this, click on the “Use saved audience” option and select the audience you just created:
Once you’ve got your audience set up, you’re all set you go.
Congrats! Your retargeting campaign is ready to rock 🙂
If you’re new to Facebook Ads or just retargeting ads, I’d recommend spending your first $100 as follows:
An ad in a Facebook sidebar will get shown way more often versus a News Feed ad. Repetition and frequency are your best friends in retargeting, since it may take a user multiple times to see the ad before they finally click.
At AppSumo, Sidebar ads have worked well because they’re shown more often than News Feed ads. With retargeting it generally takes a decent number of impressions to finally get someone to click and take an action.
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 trying retargeting to fully measure your results.
Some people get impatient and think retargeting isn’t effective after a week. Even if it isn’t effective, this is why I recommend you only spend $100 so you don’t lose too much money.
Retargeting can be powerful no matter what your marketing goals:
Get started trying retargeting today. It could be one of the best channels you have for increasing your business.
73 responses to “How to Use Retargeting Ads to Gain a 200% ROI”
Nice write-up! Retargeting ads on Facebook is one of the fastest ways to boost sales, conversion rates, and your bottom line. Implementing a good retargeting strategy can dramatically improve your paid advertising ROI
How is this 224% ROI? ROI = (Gains on investment - Cost of Investment)/Cost of Investment *100
They didn't subtract the cost of investment. They did Gains/Cost directly... this is a common mistake. The ROI is more like 125%
RocketLink.io is now on AppSumo and lets you add retargeting pixels to any link you share!
This was really helpful!! Thanks for all your advice
I am advertising on Facebook and remarketing too. The cost per purchase on my remarketing ads are performing much better than my advertising campaigns to new audiences. For example CPP on remarketing is roughly $15 and CPP on new audiences is $30. Should I increase my budget on my remarketing until the CPP for both campaigns is equal? Or do you have a rule of thumb of the difference you like to keep the CPP of your new audiences campaigns and your remarketing campaigns?
Okay Dork! That is super stuff that you’re creating there. I think your advertisements for retargeting are top of the range and I would like to add a little comment if I may. First of all I think this type of work requires the expertise of the crème de la crème. I wouldn’t try and creates these marketing ads if I didn’t know what I was doing. There’s just too much that can go wrong so focus on seeking out the best companies to help you. Cost is always going to be an issue but I found that Treepodia is really effective and priced right. I would love to hear your feedback on this company if you’d like to take a look at them and their website to tell us what you think.
You all are teaching me so much...
Excellent Information
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.
Cool stuff!
Do you need your own FB ad accounts when using Perfect Audience?
Your content above was spot on. What software is required to bring this in-house and getting our designers to learn this inside and out?
Would we be able to pay for your services. We/d like to test a remarking campaign...Thanks so much!
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?
Very helpful. Thanks a million
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
Do you still recommend using third party sites like Perfect Audience now that Facebook has Custom Audiences?
Great stuff Noah - this is something we have been looking at and you explain it in such a clear manner!!
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?
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
Sam, send a note to support@perfectaudience.com and tell them about getting setup if you haven't talked to them just yet!
Thanks Noah, as always right on point, almost doing all the heavy lifting. It is like a follow the dots retargeting masterclass....
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 🙂
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
I have been an AppSumo customer for years, thank you for all that you do. And thank you very much for this informative article.
Incredible advice!! WOW!!!! Thanks a MILLION!!!!!!! 🙂
Whoa! That was pretty in depth. Excited to try!
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?
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.
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.
I would love to hear how you got on Ernie? - what did you try in the end?
This is my first time to read about retargeting, what i can say is that your article really informative, Thanks Noah 🙂
Amazing! I just found the greatest retargeting post I've ever seen. Thank you again, Noah!
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!
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
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.
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
How does this all work for, say, someone selling ebooks of varying values, from say, Gumroad, or Selz, or DPD Cart?
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
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.
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!
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.
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
Single most useful piece of content I've read in a long time, along with Amazon Kindle post of recent times.
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
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.
Excellent as always.
FB now has their own retargeting pixel you can use instead of 3rd party ad networks.
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.
ya true dat. Simplicity.
The lookalike audiences from your FB remarketing audience is nice though.
Perfect Audience here!
You can also use our same Retargeting tag for Twitter retargeting too, now. Even more value for your buck. 🙂
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).
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
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!
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 🙂
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
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.
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.
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
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.
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!
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.
Great Article Load of information in just one piece of writing
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.
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.
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.
Woo hoo! Contact us at support@perfectaudience.com if you need help!
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.
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
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!
Value value value. The stuff you share is epic, man. Always.
Really glad you like it 🙂
First! Now I'm going to read the article haha 🙂
Second and I wrote the article 😛