What is Retargeting and How Does it Work?

In the realm of digital media planning, numerous targeting tactics are at your disposal for each digital initiative. Each programmatic campaign type presents its unique set of challenges, and various targeting strategies prove beneficial against specific end goals and key performance indicators (KPIs). Amidst these strategies, one tactic consistently enhances the overall performance of digital programs: retargeting.

Commencing with the fundamentals: What is retargeting, and why is it indispensable?

In essence, retargeting constitutes a form of online advertising utilizing data to re-engage consumers who exit a website without converting or whose information already resides in your database. It enables advertisers to craft a series of tailored touchpoints across the digital landscape—whether through display, search, social, connected TV, or elsewhere—tailored to a specific user. This serves as a reminder of products or services they previously expressed interest in.

When executed effectively, retargeting campaigns can yield several benefits, including:

1. Elevating brand awareness and fostering deeper connections and trust with target audiences.
2. Decreasing cost per acquisition (CPA) by directing spending towards consumers more likely to become paying customers.
3. Accelerating the buying journey by expediting individuals through the marketing funnel.

So, how does it function? Essentially, when a user visits a company’s website, an unobtrusive code (often called a tracking pixel) transmits a text string (a cookie) from a web server to the user’s browser. Subsequently, when the user leaves the site and continues browsing, the cookie synchronizes with the company’s retargeting systems to display ads on other platforms based on the pages they visited.

A classic example of this is the familiar scenario where an ad for a product recently viewed, added to the virtual cart, and subsequently abandoned, appears across various social feeds. While this is a tried-and-true tactic, a substantially altered operating landscape looms on the horizon…

Retargeting in a World Without Third-Party Cookies

The imminent deprecation of third-party cookies is the proverbial elephant in the retargeting room. Despite Google’s delay in Chrome browser’s third-party cookie deprecation until the second half of 2024, the industry is already grappling with a significant drop in accessible identifiers—by an estimated 50 to 60%. This “cookieless future” is not just a future concept; it’s already a reality.

Several factors contribute to this shift:

1. The introduction and enforcement of data privacy laws (e.g., GDPR in Europe, CCPA in California).
2. Forward-thinking companies anticipating privacy concerns (e.g., IDFA on iOS, cookieless browsers like Safari, Firefox, Brave).
3. Escalating consumer demand for privacy, evident in actions like opting into Apple’s ATT and using ad blockers, coupled with declining trust in Big Tech.

Marketers are now compelled to rethink and revamp their data, targeting, and retargeting strategies. Urgently adopting new, privacy-friendly addressability and measurement solutions is crucial. The key is not to procrastinate, as building, managing, and activating a cache of first-party data is a time-consuming process.

How Can You Retarget Without Cookies?

Despite situations where placing a tracking pixel may not be feasible, savvy marketers can employ alternative strategies. With the right technology, here are five methods to execute retargeting campaigns:

1. Ad tracking: Utilize tracking URLs to create retargeting groups based on ad clicks and conversions, employing CTA best practices.
2. Redirect pixels: Embed a redirect pixel in a URL redirect, capturing user data before directing them to the target landing page.
3. Audience profiling: Aggregate first-party buyer intent data to create audience segments, serving customized ads based on demonstrated interests.
4. Cross-device retargeting: Broaden reach by delivering relevant messaging across different channels and devices.
5. Dynamic creative ads: Leverage dynamic creative optimization technology for multiple ad iterations based on audience, context, and past performance.

Additionally, the FLEDGE API, a post-cookie advertising alternative in Google’s Privacy Sandbox, addresses retargeting in a privacy-conscious manner. While early results are mixed, it remains an option for those invested in cookieless retargeting strategies.

What is Retargeting? Wrapping up

Retargeting possesses the potential to enhance the effectiveness of overall marketing efforts, fostering brand awareness and providing users with multiple opportunities for conversion. By tailoring the online experience to users’ recent behavior, brands can remain top of mind and re-engage individuals who might otherwise slip away.