What's Display Ad Retargeting, and Why Is It So Effective?

May 22, 2023
Written by
SendGrid Team
Opinions expressed by Twilio contributors are their own

What's Display Ad Retargeting, and Why Is It So Effective?

Display ad retargeting (remarketing) is a powerful way to engage your customers across the digital landscape. You just the right technology, a few best practices, and a bit of know-how—and you'll be ready to convert customers better than ever.

Below, we'll walk you through everything you need to know about display ad retargeting, including what it is, how it works, best practices, and how to get started.

What is display ad retargeting?

Retargeting, also called remarketing in some circles, refers to the common digital advertising practice of targeting your website visitors with ads when they’re on websites other than your own.

You’ve most likely experienced some form of retargeting yourself! For example, have you ever been doing some online shopping at a clothing retailer, leave the site before you purchase anything, and then see ads on other sites for the products you were looking at? That’s retargeting.

The ads you see from the original site are referred to as display ads, and they act as an online reminder that you showed interest in a website or product. Below, this online article from The Denver Post has a few different display ads promoted for The Home Depot:

Why is retargeting effective?

Retargeting is one of the most effective advertising strategies available. When a potential (or previous) customer visits your website, they’re giving you a signal that they’re interested in your product or offering, and they’re considering the purchase.

Potential customers will leave your site for many different reasons, maybe they had a meeting, or had to pick up their kids, or they saw a notification about Ryan Gosling and had to read the article right away. It happens.

The fact is, they showed you that they spent the time to look at your offering and thought about making a purchase. This is a really strong indicator that they’re interested in your company or products. Providing them with a display ad increases the probability that they’ll return to your website and finish that purchase.

How does retargeting work?

The nuts and bolts of retargeting are fairly simple. From the website or company’s perspective, this is what happens:
  1. A visitor comes to your website either by entering your URL directly into their browser, or by clicking a link.
  2. Your website sends a small amount of data to the visitor’s internet browser. This small piece of code is called a “cookie.” At SendGrid, we refer to this cookie as the SendGrid pixel.
  3. The cookie allows your website to track what pages and products the visitor views while browsing.
  4. With the cookie stored on the visitor’s browser, you can then set up a display ad campaign that will identify that visitor on other websites.
  5. With the visitor and the cookie identified, you can then determine what type of ad to show them.
  6. Ideally, the visitor sees the display ad and is reminded to go back to your website and complete their purchase.
From the visitor’s perspective, they simply visit your site, consider your products or offerings, and then see ads for those same products or offerings, or for your brand in general, elsewhere on the internet.

Remarketing advertising best practices

To achieve optimal results with your remarketing advertising, you'll need to follow a handful of best practices. These will boost your engagement, keep you compliant, and reduce the creepy digital retargeting factor:
  1. Segment your audience: Tailor your retargeting messages to be more relevant and personalized, increasing the chances of conversion.
  2. Set frequency caps: Implement frequency caps to control the number of times an individual sees your retargeting ads within a specific time period. This ensures your campaign remains effective without overwhelming your audience.
  3. Utilize dynamic ads: Deliver dynamically generated ads based on your user's browsing history and interests. This approach increases the likelihood of conversions by reminding users of the specific products they were interested in.
  4. Optimize landing pages: Make it easy for users to take the desired action, whether it's making a purchase, signing up for a newsletter, or filling out a form. A clear call-to-action and streamlined conversion process will enhance the effectiveness of your retargeting campaign.
  5. Test and refine: Experiment with different ad formats, messaging, visuals, and audience segments to identify what resonates best with your target audience. Monitor key metrics such as click-through rates, conversion rates, and return on ad spend to determine the effectiveness of different variations and make data-driven optimizations.
  6. Respect user privacy: Be transparent about the data you collect and how you use it for retargeting purposes. Provide clear options for users to opt out of retargeting if they wish to do so—and respect their preferences.

Getting started with retargeting advertising campaigns

Display ad retargeting continues to emerge as a powerful and effective marketing strategy that enables businesses to connect with their target audience in a personalized and impactful way. Still, used incorrectly, it can be downright creepy.

However, by leveraging user data and employing dynamic ad placements across various online platforms, retargeting campaigns have shown remarkable results in terms of increased brand awareness, improved conversion rates, and enhanced customer engagement.

Want to collect better insights about your customers? Get started with email marketing. You'll gain valuable insights about their preferences, likes, and dislikes—and you can use this data to better market to them on other platforms.

Create a free Twilio SendGrid account to get started.

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