What is Retargeting and How Does it Work?

As a media planner, several targeting tactics are available to you for every digital initiative you’re working on. Each programmatic campaign type brings its own unique set of challenges. Certain targeting strategies are more helpful against specific end goals and KPIs, but there’s one tactic that will always add to the overall performance of your digital program: retargeting.

Retargeting Ads and Programmatic

Let’s kick off with the basics: What is retargeting, and why is it so crucial?

In broad strokes, retargeting is a form of online advertising that uses data to re-engage consumers who leave a website without converting and/or whose information you already have in your database. It empowers advertisers to create a series of customized touchpoints around the digital universe—be it via display, search, social, connected TV, or wherever—that are tailored to that one specific user, reminding them of products or services they once expressed an interest in.

When done right, retargeting campaigns can potentially serve a range of benefits, including:

• Building brand awareness and deeper levels of connection, and trust, with target audiences
• Lowering CPAs by focusing spend on consumers more likely to turn into paying customers
• Accelerating the buying journey by moving people through the marketing funnel more quickly

So, how does it all work? It’s pretty simple, really. When someone ends up on a company’s website, an unobtrusive piece of code (often referred to as a tracking pixel) sends a string of text (otherwise known as a cookie) from a web server to the user’s browser. Then, when said user leaves the site to continue surfing the web, that cookie will sync with the company’s retargeting systems to serve up ads on other platforms based on the pages they visited on the website.

The classic example of this in action—and one we’ve all no doubt experienced—is when an ad for the exact product we just looked at, added to our virtual cart, and then abandoned suddenly, magically appears all over our social feeds. It’s a tried-and-true tactic, but a dramatically different operating landscape is on the horizon...

Retargeting in a World Without Third-Party Cookies

Yes, the elephant in the retargeting room: the impending deprecation of third-party cookies.

For years, third-party cookies have been the bedrock of retargeting, but they are slowly and surely fading from view. Last year, Google announced (yet again) that’s it’s delaying third-party cookie deprecation in its Chrome browser, this time until the second half of 2024. The event has been widely seen as the de facto deadline for the industry to shift to alternative targeting solutions. But, in reality, the volume of identifiers accessible to advertisers has already dropped significantly—by some 50 to 60% according to some estimates. In other words, this “cookieless future” everyone is talking about is already here.

Why, you ask? Here are just three of the reasons:

1. The introduction of data privacy laws governing the collection, use, and disclosure of data (think GDPR in Europe, CCPA in California, etc.) and stricter enforcement of these laws
2. Forward-thinking companies getting ahead of the privacy conversation (consider IDFA on iOS and browsers that have been cookieless for a while—Safari, Firefox, Brave)
3. Ever-increasing consumer demand for privacy (as evidenced by consumers opting into Apple’s ATT and using ad blockers, all compounded by declining trust in Big Tech)

Add it all together, and marketers are now compelled to reimagine and overhaul their data, targeting, and retargeting strategies. Moving forward, it will be critical for advertisers to adopt new, privacy-friendly addressability and measurement solutions. The key here though is not to procrastinate. After all, the process of building, managing, and activating a stockpile of first-party data is long and complex, so there’s no time to waste!

How Can You Retarget Without Cookies?

Of course, there will be times when marketers may not be able to place a tracking pixel and capture specific visitor data. But that doesn’t mean there aren’t workarounds. With the right technology in the toolkit, there are still a number of ways to execute retargeting campaigns. Here are five:

1. Ad tracking: Leverage tracking URLs to create retargeting groups based on users who have clicked on your ads and/or users who triggered a conversion for a pre-determined tactic. Quick tip: To drive higher engagement, be sure to use CTA best practices—create, test, iterate.
2. Redirect pixels: Rather than placing a retargeting pixel on the page/site you wish to collect user data on, consider implementing a redirect pixel. This snippet of code will be embedded in a URL redirect so that whenever a person clicks on your ad, you can capture their data first before redirecting them to the target landing page.
3. Audience profiling: Aggregate first-party buyer intent data to create basic audience segments—essentially, cohorts who have taken the same actions online. Once you’ve collected enough data to meaningfully populate these segments, you can serve these targeted groups with customized ads based on their demonstrated interests (think something like Google Topics).
4. Cross-device retargeting: Advertisers can integrate this tactic to broaden their reach with consumers, delivering relevant messaging across different channels and devices to power a more holistic brand experience.
5. Dynamic creative ads: Tap into highly automated dynamic creative optimization technology to rapidly build multiple ad iterations from the same base creative, using variables such as audience, context, and past performance to tailor ad segments and improve campaign effectiveness.

A note here as well on FLEDGE (or First Locally-Executed Decision over Groups Experiment) API, a post-cookie advertising alternative in Google’s Privacy Sandbox dedicated specifically to the retargeting aspect of performance advertising. It works by storing information on users’ devices, as opposed to making it broadly accessible—the theory being that it protects user privacy by limiting the amount of data flowing around ad systems and bid streams. Early results have been, shall we say, mixed, and early adopters are in short supply. But those invested in cookieless retargeting strategies may want to keep an ear to the ground for updates on how the experiments progress.

What is Retargeting? Wrapping up

Retargeting has the capacity to increase the effectiveness of other marketing efforts and raise brand awareness. It allows users who recognize your brand to see your ads all across the digital ecosystem—creating the impression of a large-scale advertising campaign, but for a fraction of the budget. And it’s a targeting tactic that increases brand recall and drives consumers down the sales funnel, allowing multiple opportunities for conversion.

By molding the online experience around consumers’ recent behavior, brands can stay top of mind with uses and re-engage someone who might otherwise have turned into “the one who got away.”

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Looking for advice about how to get your retargeting campaigns off the ground, but don’t know where to begin? Our Media Strategy & Activation team can point you in the right direction.