Programmatic Media Buying 101: Retargeting And The Marketing Funnel

Programmatic Media Buying 101: Retargeting And The Marketing Funnel

How Does Retargeting Work?

marketing funnel programmaticDigital advertising provides incredible insight into how consumers engage with brands throughout the buying journey – or marketing funnel. From brand lift awareness, engagement levels during the consumer consideration phase and ultimately to the number of conversions and total cost of purchases, metrics are available to measure the user’s engagement at every stage.

These metrics enable retargeting technology, a very effective tactic marketers use to drive already interested users towards conversion.

Typically, customers don’t purchase every time they view an ad or visit a website. But those views and visits are important: the average customer interacts with a brand at least four times before buying – which may happen over several days or even months for larger purchases, like a car or a home. Those who have visited a website are therefore far more likely to make a purchase than any other audience. That means marketers need to keep users engaged and stay top-of-mind.retargeting programmatic

Retargeting allows marketers to deliver relevant reminders and incentives, such as free shipping or a discount, to lure back a current customer who’s abandoned a shopping cart or attract potential customers who viewed a product page without purchasing.

You probably have experienced retargeting yourself. Ever research an item like a coffee maker? Then notice ads that seem to follow you around that are all about coffee?  Not a coincidence.


The Technology

programmatic session cookieRetargeting uses a small piece of code, called a tracking pixel. The code is placed on the advertiser’s site and drops a cookie to the target audience when a specified event occurs, such as a product page view or a shopping cart is abandoned. Cookies allow the user to be anonymously identified as they continue to browse beyond the advertiser’s website. When the potential customer’s cookie appears again, relevant ads are delivered from the advertiser.


The Challenges

While a small percentage of people use cookie- or ad-blocking software to prevent this collection of data, it’s only a fraction of the market in its entirety. Even those who’ve blocked tracking will still receive ads, but they’ll just have less relevance to them.

Additionally, it’s also important to note that while mobile usage is on the rise, pixel tracking with cookies aren’t enabled in most mobile apps or browsers. Shoppers often use their phones for evaluating what they’d like to buy – valuable behavior for retargeting – but then will wait and make purchases on desktop or even in-store.

The Opportunitiesfrequency caps programmatic

Retargeting technology has become a powerful tactic in the marketing industry — especially when it’s done strategically. To maintain strategy, it’s important to keep an eye on how the tactic is coming across on the user’s side. Retargeting ads at times, might irritate users who are for example tired of seeing the same ad for life insurance over and over again just because they read one article on retirement planning. In order to prevent this, frequency caps are implemented to prevent serving too many ads to the same person.

Ultimately, both behavior and affinity targeting can be the critical data point in matching ads to viewers, even in real-time on a one-to-one basis via programmatic advertising.


Evaluating Retargeting Metrics

When done well, retargeting is more effective than any other targeting or segmentation techniques.

In fact, it has the potential to be so effective, that marketers at times rely too heavily on a user’s last click or page view and they pay less attention on the surrounding metrics. Likely, the most valuable advertising was done before the customer first visited the website because that’s where the brand awareness was required.

It’s therefore important to understand that retargeting is limited in scale to people who actually visited the website. Marketers sometimes put too much budget into retargeting users who would have purchased anyway.


Overall, retargeting offers a vast amount of opportunities, but like any tactic — it needs to be executed strategically. It’s important to keep in mind that:

  • Retargeting taps into the audience most likely to buy – those who have already visited the advertiser’s website – driving interested users to action.
  • Retargeting presents relevant ads, but should be used with frequency capping to avoid hounding users through repetition
  • Predictive retargeting reaches users based on their interests and behaviors to show ads that are relevant and valuable.

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