Retargeting vs. Remarketing in Performance Marketing
Have you ever felt like an ad is following you around the internet, showing up on every website you visit?
You’re not alone.
The reason is – two cunning characters, retargeting and remarketing, emerge from the shadows with their unique tactics to lure the window shoppers back for a second look.
In this ever-evolving performance marketing landscape, with businesses constantly seeking innovative ways to engage and convert their audiences, these two powerful strategies have gained significant traction in recent years.
While these terms are often used interchangeably, they actually represent distinct approaches with unique advantages and applications.
For better understanding, picture retargeting as the digital equivalent of handing out personalized business cards to prospects who have shown interest in your product, while remarketing operates like a seasoned salesperson, crafting tailored pitches to entice potential customers back to the store.
However, learning the nuances between retargeting and remarketing is crucial for a successful digital strategy.
In this blog, we will dive into the distinctions between these two powerful tactics, shedding light on their unique benefits and helping you make informed decisions to enhance your marketing efforts.
Definition and Scope
Definition – Retargeting: Also known as behavioral retargeting or pixel-based retargeting, retargeting involves displaying ads to users who have previously visited a website but did not complete a desired action, such as making a purchase or signing up for a newsletter. It leverages cookies or pixel tracking to target individuals across various online platforms.
Inshort, retargeting typically refers to the practice of using cookies and online ads to re-engage website visitors who didn’t convert or take a specific action during their initial visit.
Performance – According to a study by AdRoll, retargeting ads can increase click-through rates by up to 10 times compared to regular display ads.
Conversion Rates – Retargeted users are 70% more likely to convert compared to non-retargeted users, as reported by CMO.com.
ROI – A study by Invesp found that companies that use retargeting techniques can see a 726% increase in overall website ROI.
Definition – Remarketing: Remarketing, on the other hand, focuses on re-engaging users through email marketing campaigns. It involves reaching out to users who have provided their email addresses to the business, either through website sign-ups or previous transactions. Emails are personalized based on user behavior and preferences.
In brief, remarketing is a broader term that encompasses various strategies to reconnect with users, such as through email, phone calls, or personalized content.
Email Remarketing – According to SaleCycle, cart abandonment emails, a common form of remarketing, have an average open rate of around 45%, and a click-through rate of about 21%.
User Engagement – Epsilon’s research showed that personalized emails with remarketing elements can generate six times higher transaction rates than non-personalized emails.
Basic Differences Between Retargeting & Remarketing
Retargeting: This strategy targets users across a broader spectrum of online platforms, such as social media, display networks, and other websites where ad space can be purchased. It aims to reach users wherever they are online.
Remarketing: Remarketing primarily targets users through email, allowing businesses to deliver personalized messages directly to their inboxes. This approach enables a more intimate and focused communication channel.
2. Audience Segmentation
Retargeting: Retargeting relies on user behavior on the website, such as pages visited, products viewed, or actions taken. It segments audiences based on their interactions with the site to deliver relevant ads.
Remarketing: Audience segmentation in remarketing is based on email lists. Users are grouped according to their stage in the customer journey, past purchases, and preferences. This segmentation enables tailored content in email campaigns.
3. Ad Format
Retargeting: The most common ad formats in retargeting are display ads and banners. These ads can appear on various websites and social media platforms, reminding users about products or services they showed interest in.
Remarketing: Email campaigns in remarketing can include personalized product recommendations, special offers, or cart abandonment reminders. The content is tailored to the recipient’s specific interactions and preferences.
4. User Engagement
Retargeting: As retargeting ads are displayed on different platforms, user engagement can be more passive. Users may see the ads while browsing other sites or social media, increasing brand visibility and reminding them of the website they previously visited.
Remarketing: Remarketing campaigns aim for more direct user engagement. Emails are sent directly to users’ inboxes, prompting them to take action and engage with the content. This approach often results in higher click-through rates and conversions.
5. Conversion Timing
Retargeting: Retargeting is effective for capturing users who have shown recent interest in a product or service. It focuses on converting potential customers who are still in the consideration phase of their journey.
Remarketing: Remarketing is geared towards re-engaging past customers or subscribers, often with the intention of upselling, cross-selling, or encouraging repeat purchases.
6. Channel Dependence
Retargeting: Since retargeting operates across various platforms, it is not solely reliant on user-provided information. The focus is on users’ behavior on the website, making it more versatile in reaching potential customers.
Remarketing: Remarketing heavily depends on the availability of email addresses. Businesses need to build and maintain a strong email list to execute successful remarketing campaigns.
7. Ad Frequency
Retargeting: Ad frequency in retargeting can sometimes be perceived as intrusive if not managed properly. Displaying the same ads repeatedly may lead to ad fatigue and annoyance among users.
Remarketing: Email campaigns generally have more control over ad frequency. Since businesses communicate directly with users through personalized emails, they can manage the timing and cadence of messages more effectively.
8. Platform Usage
Retargeting is commonly associated with display advertising on third-party websites, such as banner ads or pop-ups.
In contrast, Remarketing is more versatile and extends beyond display ads, involving email campaigns, social media re-engagement, and other personalized communication methods.
9. Conversion Stage
Retargeting primarily operates at the later stages of the sales funnel, targeting users who have shown intent or interest in a particular product or service.
In contrast, Remarketing covers a broader range of conversion stages, from re-engaging previous customers to nurturing leads in the early stages of the buying cycle.
10. Conversion Tracking and Attribution
Retargeting campaigns often rely on straightforward conversion tracking, attributing conversions directly to users who click on retargeted ads and make a purchase.
Remarketing, however, may involve more complex attribution models that consider multiple touchpoints and interactions with the brand before a conversion.
11. Reach and Frequency Management
Retargeting can sometimes lead to ad fatigue, where users see the same ad repeatedly, potentially causing annoyance or diminishing returns.
Remarketing campaigns typically encompass a more diverse range of communication channels, allowing for better reach and frequency management to prevent overexposure.
12. Data and Privacy Considerations
Retargeting heavily relies on user data collected through cookies, which can raise privacy concerns.
Remarketing, when implemented through email marketing or other consent-based channels, may have a more transparent approach to data usage, adhering to privacy regulations and user consent preferences.
13. Cost and Budget Allocation
Retargeting campaigns may require a significant portion of the budget to target a smaller, highly specific audience.
Remarketing efforts, especially through email or organic social channels, might have lower costs, making it a more cost-effective strategy for engaging a wider audience.
14. Customer Lifecycle Focus
Retargeting is particularly effective for reactivating abandoned carts and driving users to complete a purchase.
Remarketing, however, addresses the entire customer lifecycle, supporting customer retention, advocacy, and re-engagement across different stages of their relationship with the brand.
Both retargeting and remarketing are powerful performance marketing strategies that can significantly boost conversions and engagement. Retargeting excels in reaching potential customers across multiple platforms based on their website behavior, while remarketing focuses on re-engaging existing customers through personalized email campaigns.
While both methods aim to re-engage with potential customers, their approaches, objectives, and outcomes vary significantly.
Understanding the differences between Retargeting and Remarketing can help marketers design more effective performance marketing campaigns that align with specific goals and target audience segments.
Embrace the power of retargeting and remarketing with Zavops today and watch your business soar to success!
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