Learn how to measure the success of your retargeting campaigns with the right KPIs.
Marketing campaigns can be expensive, and businesses need to make sure that their investment is giving them a good return in the form of conversions. One way to achieve this is through retargeting campaigns, which help businesses reach out to individuals who have already interacted with their brand. In this article, we'll explore the key performance indicators (KPIs) for retargeting campaigns, with a focus on conversion rate.
Retargeting campaigns have become increasingly popular in recent years as businesses seek new and innovative ways to connect with their target audience. In this article, we'll take a closer look at retargeting campaigns, how they work, and the benefits they can offer your business.
Retargeting campaigns are a type of online advertising that helps businesses connect with people who have previously engaged with their brand in some way. The idea is to bring people back into the marketing funnel and encourage them to take further action, whether that's making a purchase, filling out a form, or signing up for a newsletter.
Retargeting campaigns work by using cookies to track users as they browse the internet. When a user visits a website, a cookie is placed on their computer or device. This cookie then allows the website to show targeted ads to the user as they browse other websites or social media platforms.
Retargeting campaigns can be an effective way to increase conversions and drive sales. They typically have a higher click-through rate (CTR) and lower cost per click (CPC) than traditional display ads, because they're targeted specifically at individuals who have already shown an interest in the brand. This means that retargeting ads are more likely to be clicked on and convert into a sale or lead.
In addition to driving conversions, retargeting campaigns can also help to improve brand awareness and recall. By showing ads to users at various touchpoints throughout their online journey, businesses can remind users of their brand and keep it top of mind.
There are several different types of retargeting campaigns that businesses can run:
Overall, retargeting campaigns can be a powerful tool for businesses looking to increase conversions and improve their online advertising ROI. By targeting users who have already shown an interest in your brand, retargeting campaigns can help to drive sales, improve brand awareness, and keep your brand top of mind throughout the customer journey.
Conversion rate is one of the most important KPIs for retargeting campaigns, as it indicates how many people are actually taking the desired action after being retargeted. Conversion rate is calculated as the number of conversions divided by the total number of clicks. A high conversion rate indicates that the campaign is effective at driving action from users, while a low conversion rate may indicate that the ads or landing pages need tweaking to better align with user interests and behaviors.
For example, if your retargeting campaign is aimed at promoting a new line of fitness equipment, a high conversion rate would mean that a significant number of users who clicked on your ad ended up purchasing the equipment. On the other hand, a low conversion rate would suggest that users are not finding the equipment appealing or that the landing page is not providing enough information to convince them to make a purchase.
Click-through rate measures the number of clicks that an ad receives, divided by the number of impressions it generates. A high CTR suggests that the ad is resonating with users and encouraging them to engage with the brand, while a low CTR may indicate that the ad needs to be refined to be more appealing or relevant to the target audience.
For instance, if your retargeting campaign is aimed at promoting a new line of skincare products, a high CTR would mean that users are finding the ad and the products appealing and relevant to their needs. A low CTR, on the other hand, would suggest that the ad is not resonating with users and needs to be refined to better align with user interests and behaviors.
Cost per acquisition measures the amount of money that it costs to acquire a new customer through retargeting. CPA is calculated by dividing the total cost of the campaign by the number of conversions. A low CPA indicates that the campaign is achieving a good return on investment, while a high CPA suggests that the campaign may need to be adjusted to better engage and convert users.
For example, if your retargeting campaign is aimed at promoting a new line of home decor products, a low CPA would mean that you are able to acquire new customers at a relatively low cost, indicating that the campaign is effective at driving conversions. A high CPA, on the other hand, would suggest that the campaign is not resonating with users and needs to be adjusted to better align with user interests and behaviors.
Return on ad spend measures the amount of revenue that a campaign generates, compared to the amount of money that was spent on the campaign. ROAS is calculated by dividing the revenue generated by the campaign by the amount spent on the campaign. A high ROAS indicates that the campaign is generating a good return on investment, while a low ROAS suggests that the campaign may not be worthwhile financially.
For instance, if your retargeting campaign is aimed at promoting a new line of pet products, a high ROAS would mean that the campaign is generating significant revenue for your business, indicating that the campaign is effective at driving conversions. A low ROAS, on the other hand, would suggest that the campaign is not generating enough revenue to justify the amount spent on it and needs to be adjusted to better align with user interests and behaviors.
Bounce rate measures the percentage of users who leave a website after only viewing one page. A high bounce rate can be a sign that the landing pages or website experience are not aligned with user expectations or interests.
For example, if your retargeting campaign is aimed at promoting a new line of fashion accessories, a high bounce rate would mean that users are not finding the landing page or website experience appealing or relevant to their needs. This could be due to a variety of factors, such as poor website design, slow page load times, or lack of relevant information on the landing page.
By monitoring and optimizing these KPIs, you can ensure that your retargeting campaign is effective at driving conversions and generating revenue for your business.
In order to measure conversion rate, businesses need to set up conversion tracking. This involves adding a small piece of code to the website or landing page that tracks when a user completes a desired action, such as making a purchase or filling out a form.
Once conversion tracking is set up, businesses can begin to analyze conversion rate data. They can look at the overall conversion rate for the campaign, as well as the conversion rate for specific ad sets or landing pages. This can help to identify where the campaign is performing well and where it may need to be optimized further.
Based on the conversion rate data, businesses can identify areas for improvement. This might involve refining ad targeting, creating more compelling ad copy or creatives, optimizing landing pages, or adjusting the retargeting frequency based on user behavior.
One way to improve conversion rates is to segment your audience based on their behavior or interests. This allows businesses to create more personalized and relevant ad campaigns that speak directly to the user's needs or pain points. By speaking to the user's specific needs, businesses can increase the chances of conversions through retargeting.
Another way to improve conversion rates is to personalize ad creatives based on user behavior or demographics. For example, an e-commerce business might show retargeted ads featuring products that were left in a user's shopping cart, or ads displaying products that are similar to those that the user has viewed before. Personalizing ad creatives can help to improve click-through rates and engagement, which ultimately leads to more conversions.
A/B testing involves creating two versions of an ad or landing page, and then testing them to see which one performs better. By testing different elements of the campaign, such as ad copy or creative, businesses can identify which elements are resonating best with their audience and refine the campaign accordingly.
Landing pages play a critical role in converting retargeted users. Ensuring that landing pages are optimized for user experience, with clear calls to action and easy navigation, can help to increase conversion rates. Businesses should also consider A/B testing different versions of landing pages to determine which elements are most effective at driving conversions.
While retargeting can be an effective way to reach users who have already interacted with a brand, it's important to avoid overwhelming users with too many ads. Frequency capping involves setting a limit on how many times an individual will be shown a retargeted ad. By limiting exposure, businesses can avoid frustrating users and improve the likelihood of conversions.
Conversion rate is a critical KPI for retargeting campaigns, as it indicates the effectiveness of the campaign at driving action from users. By tracking conversion rate and optimizing campaigns accordingly, businesses can improve their return on investment and drive more conversions from retargeted users.