Consider the case of a boutique furniture store. A potential customer, Ava, spends time on the store’s website, admiring a vintage oak desk. She even goes so far as to add the desk to her online cart, but then, for some reason—perhaps a phone call or the need to rush off to a meeting—she exits the website. Later, as Ava scrolls through a design blog or checks the weather, an ad for that exact oak desk pops up in her browser. It’s a visual and contextual cue, a subtle reminder of the unfinished purchase she left behind.
This is retargeting in action: a strategic prompt that reconnects Ava with the desk, encouraging her to return to the website and complete her purchase. By presenting these personalized and responsive display ads in various online spaces that Ava frequents, the furniture store stays relevant and top-of-mind, significantly increasing the likelihood of converting her initial interest into a sale.
What is Retargeting?
How Does Retargeting Work?
Retargeting stands as a pivotal strategy in the realm of eCommerce marketing. It helps online retailers re-engage with prospective customers who have expressed interest in their offerings but have not completed a purchase. This method leverages cookies to track a user’s navigation across a retailer’s digital storefront. When a product piques a visitor’s interest, that information is captured, enabling targeted advertisements to follow them across the web.
To understand this better, let’s continue with Ava’s journey. Once she exits the website’s product page, the store’s retargeting system identifies her as a high-intent user who added a product to the cart but didn’t purchase it. In the backend, this triggers the creation of personalized responsive ads featuring the vintage oak desk, leveraging data from her session. These ads are then strategically placed across the websites and social platforms she frequents, ensuring the desk remains top-of-mind. This targeted approach aims to re-engage Ava, drawing her back to complete the purchase, thus illustrating the seamless and efficient mechanism of dynamic retargeting at work.
The boutique leverages the data from Ava’s visit, ensuring the vintage oak desk she admired stays in her digital view during subsequent online activities. This strategic ad placement transcends mere brand recall—it builds multiple touchpoints that amplify Ava’s chances of revisiting the website to finalize her purchase. Such targeted visibility not only propels sales but also bolsters the effectiveness of the store’s advertising initiatives.
What is the Difference Between Retargeting and Remarketing?
While often used interchangeably, retargeting and remarketing are distinct tactics within marketing. Retargeting primarily refers to online ads that target users based on their previous actions on the internet. In contrast, traditional remarketing is a broader concept, encompassing email campaigns that reach out to customers who have already engaged with the brand.
A dynamic remarketing campaign dives deeper into the relationship, often involving direct communication with existing or new customers who have provided their contact information. It’s about fostering loyalty and encouraging repeat purchases through personalized emails, offering discounts, or alerting customers to new products that match their past shopping behavior.
Essentially, retargeting ad campaigns focus on capturing potential new sales by reminding customers of what they’ve left behind, while a dynamic remarketing campaign is all about cultivating existing relationships to enhance customer lifetime value. Both strategies play a pivotal part in a comprehensive digital marketing strategy, ensuring that brands stay connected with their audience at every step of the consumer journey.
Must Read: What Is Addressable Advertising?
The Two Types of Retargeting Retailers Should Know
Static retargeting adopts a broad-stroke advertising technique, showcasing identical ads to users who have engaged with a site previously. This approach maintains a consistent message regardless of the user’s actions or interests. This method relies on the assumption that any reminder about the brand will persuade the user to visit the website again.
For example, a retailer may use static retargeting to promote a seasonal sale. Regardless of what items the customers viewed, they all received the same ad about the sale. This broad-stroke strategy is effective for general brand reinforcement and works well when promoting a universal message.
When to Consider Static Retargeting?
Static retargeting is ideal when your goal is to increase brand awareness or promote a specific product offer that applies to all potential customers. It’s also cost-effective for smaller retailers who may not have a diverse product range. You can consider static retargeting when you want to:
- Broadcast a site-wide sale or event
- Reinforce brand recognition across a wide audience
- Promote a single product or service
This method is less about personalization and more about consistent brand messaging. It’s a way to keep your brand in the user’s line of sight, hoping that familiarity leads to engagement. Static retargeting is a powerful tool when used in the right context, offering a straightforward way to stay connected with your audience.
Dynamic retargeting is a sophisticated marketing strategy that tailors ads to individual users based on their previous interactions with your website. It utilizes first-party cookie data to display products that users have viewed, added to a cart, or shown interest in, creating a highly personalized advertising experience.
Dynamic retargeting leverages advanced algorithms and machine learning (ML) to analyze user behavior, ensuring that the ads they see are relevant to their interests. For instance, if a customer checked out a specific laptop but did not purchase it, dynamic retargeting would show Google display ads for that laptop or similar models as they browse the internet.
To use dynamic retargeting ads, retail advertisers will create a product feed that includes information about their products, such as product names, descriptions, images, and prices. This feed is then uploaded to a retargeting platform, FCC’s Ads Manager.
Once the feed is uploaded, the retargeting platform will track the advertiser’s website visitors and app users. When a visitor views a product on the website or app, the retargeting platform will add that product to their user profile.
The retargeting platform will then use this information and first-party data to show the visitor ads for the products they have viewed on other websites and apps. Display retargeting ads are of various formats, such as banner ads, native ads, or video ads.
When to Consider Dynamic Retargeting?
Dynamic retargeting should be the go-to strategy when you want to:
- Increase conversion rates through personalized ads
- Showcase a wide range of products to individual customers
- Leverage user data for targeted marketing campaigns
This approach is particularly effective for E- commerce sites with extensive inventories, where personalized recommendations can guide customers back to products they are genuinely interested in.
Let’s have a quick comparative analysis of static and dynamic retargeting:
Low: Advertisements are generic and not tailored to individual user behavior.
High: Ads are customized based on the specific products or pages the user has shown interest in.
Third-party cookies: Relies on data collected from various websites to track user behavior.
First-party data: Uses data collected directly from your website, offering more relevance and compliance with privacy regulations.
Broad campaigns that aim to reach a wide audience without the need for personalization and general brand awareness initiatives.
Campaigns that aim for higher conversion rates through personalized ads that resonate with individual users’ interests and past interactions.
Single ad format: All users are retargeted with the same ad, leading to a uniform message being broadcast.
Multiple ad formats: Ads are dynamically generated to match the user’s interests, potentially in various creative formats like carousel ads, video ads, etc.
Generally lower: Less complex to set up and manage due to the lack of personalization.
Higher: Investment in technology and algorithms needed to analyze user data and create personalized ad experiences.
Typically lower: Since ads are not personalized, they may not be as engaging or relevant to the user.
Typically higher: Personalized ads are more likely to capture the user’s attention and re-engage them.
Limited: Changes to the ad campaign apply universally without the ability to target specific user segments.
High: Offers the flexibility to adjust campaigns for different segments based on user behavior and preferences.
Easy to scale: Since the ad is the same for everyone, it’s easier to distribute across various platforms.
Requires more effort: Each ad must be tailored to the user, which can be resource intensive as the audience grows.
ROI (Return of Investment)
Can be lower: Due to a less targeted approach, it may not always result in direct sales.
Can be higher: A targeted approach often leads to increased conversions and better use of the advertising budget.
Riskier: With the phasing out of third-party cookies, reliance on them could lead to compliance issues.
Safer: Uses first-party data, which is more privacy-compliant and is seen as more trustworthy by users.
Dynamic retargeting stands out as it capitalizes on first-party data, aligning with current trends toward privacy and data ownership. It bypasses the limitations of third-party cookies, offering a more sustainable and user-centric approach to retargeting.
5 Reasons retailers should focus on dynamic retargeting
Dynamic retargeting is revolutionizing the retail landscape, offering a suite of benefits that enhance marketing strategies and bolster sales. Here are five compelling reasons why retailers should prioritize dynamic retargeting:
Better ROI on Ad Spends
Dynamic retargeting makes the best use of your advertising budget by focusing on users who have already expressed interest in your products. By targeting these warm leads, you’re more likely to see a higher Return On Investment (ROI) as these customers have a higher propensity to complete a purchase.
Targeted Personalized Ecommerce Experience
Personalization is key in today’s market, and dynamic retargeting delivers it by customizing the shopping experience. According to research on ad personalization and consumer behavior, personalized ads can lead to a 38% increase in sales. Dynamic retargeting harnesses first-party data to create ads that resonate with individual preferences, leading to a more engaging customer journey. Dynamic retargeting ads can have a click-through-rates (CTRs) that are 10 times higher than traditional display ads
Increased Brand Awareness
Dynamic retargeting keeps your products in the sightline of potential buyers, reinforcing brand recognition. Even if the initial visit doesn’t result in a sale, the repeated exposure to personalized ads builds a familiarity with your brand, which can pay dividends in the long term.
Reduced Abandoned Cart
Shopping cart abandonment is a significant challenge for online retailers. Dynamic retargeting addresses this issue by reminding website visitors of the items they’ve left behind. For example, suppose a customer abandons a cart containing a designer handbag. If you add her to your dynamic retargeting ad campaign list, she’ll later see ads for that handbag as she browses other sites. This approach is based on custom parameters and is focused on nudging her to revisit the abandoned cart and complete the purchase.
Offers Cross-Selling and Upselling Opportunities
Dynamic retargeting isn’t just about bringing customers back; it’s also an opportunity to introduce them to related products or more premium options. By analyzing past behavior, dynamic ads can suggest complementary items or upgrades, increasing the average order value (AOV) and enhancing the customer experience.
Dynamic Retargeting Best Practices Every Retailer Should Follow
Dynamic retargeting is a powerful tool for retailers, but its effectiveness relies on best practices that ensure campaigns hit the mark and maximize engagement. Let’s have a look at some of the crucial strategies that can help retailers make the most of dynamic retargeting:
Segment Your Audience List Strategically
Effective dynamic retargeting begins with segmentation. Break down your audience basis their behavior, demographics, and purchase history. Tailor your static or dynamic retargeting ads to match the interests and behaviors of each segment to increase relevance and conversion rates.
Avoid Ad Fatigue
Ad fatigue occurs when the audience is overexposed to the same ads, leading to diminished returns. To prevent this, rotate your ads regularly and set frequency caps. This keeps content fresh and engagement high.
Monitor and Adjust Your Ad Campaigns
Continuously analyze the performance of your retargeting campaigns. Use data-driven insights to adjust in real time, optimizing for the best possible outcomes. This responsive approach ensures that your strategy evolves with consumer behavior and market trends.
Use a Variety of Ad Formats and Communication
Don’t rely on a single ad format. Utilize a mix of banners, videos, and interactive ads to engage users across different platforms. Diversifying your ad formats prevents monotony and appeals to users with different preferences, enhancing the overall impact of retargeting efforts.
Use FCC's Ads Manager for Dynamic Retargeting
Flipkart Commerce Cloud (FCC) stands at the forefront of retail technology, offering a suite of tools designed to supercharge commerce. Among its offerings, the FCC Ads Manager is a standout product, enabling retailers to monetize their online assets and diversify revenue streams through optimal usage of available ad spaces.
FCC’s Ads Manager empowers retailers with dynamic retargeting capabilities that are essential for today’s digital marketplace. It allows for the creation of personalized ads based on first-party data, ensuring that your marketing efforts are not only compliant with the latest privacy standards but also highly effective in engaging customers at the right time and lowest possible cost.
With FCC, retailers can take advantage of:
- Display Ads: Captivate the audience with visually appealing ads that grab attention and drive traffic back to your site.
- Product Contextual Ads: Place your products in front of your customers who are already looking for similar items, increasing the likelihood of conversion.
- Product Listing Ads: Enhance visibility in search results with ads that promote your products right when potential buyers are making purchasing decisions.
FCC’s technology is not only patented and applied but also proven, with a track record of helping large retail names increase their ad revenue and market share. By adopting FCC’s Ads Manager, retailers can expect a seamless integration of advanced retargeting strategies into their marketing mix, leading to better ROI and customer engagement.
If you are looking to elevate your ads retargeting efforts, FCC provides a robust solution that easily exceeds other offerings in the market. With FCC, you can expect a technology partner who understands the nuances of retail and offers continuous guidance and consultation.
To discover how FCC’s Ads Manager can transform your retargeting strategy and drive your retail business forward, contact us for more information.
Let’s connect and explore how we can propel your retail advertising to new heights.