Retargeting: What Is It and How Does It Work?

Drew Pytel

For most e-commerce websites, only 1.82% of visitors convert on the first visit. For the other 98% of users who don’t convert, there’s retargeting.

Retargeting utilizes user intent data from previous interactions to serve relevant ads and messages, driving further engagement and conversions.

This guide will review retargeting and how it works amidst the upcoming Third-Party cookie deprecation.

What is Retargeting in Digital Marketing? 

Retargeting identifies users who have visited your online store and displays targeted ads across various websites and social platforms, encouraging them to revisit and convert.

🆚 What’s the difference between retargeting and remarketing? 🆚
Retargeting campaigns utilize cookies to place ads in front of your prospects, while remarketing campaigns have a broader scope and collect and send emails to re-engage customers.

Types of Retargeting

There are two main types of retargeting: pixel-based and list-based. 

1. Pixel-Based Retargeting

Pixel-based retargeting is the most common method to re-engage anonymous site visitors. 

It works like this. You embed a code snippet (either HTML or JavaScript) or tiny invisible 1×1 images called pixels on your web pages, which collect user information like an IP address.

When someone visits your website, the code is placed on their browser, making it effectively “cookied.” As they navigate the web after leaving your site, this cookie triggers retargeting platforms to display tailored ads based on the specific pages they previously viewed on your website.

⭐ The advantages of pixel-based retargeting ⭐

    • Timely: Can immediately target users after leaving your website.
    • Specific page targeting: Can serve ads based on the specific pages or content users have viewed on your website.
    • Behavior-based: Can target users based on their actions and behaviors on your website, increasing relevancy.
    • Accurate tracking: Pixels allow precise user interaction tracking, including page views, clicks, and conversions.
    • Customizable: Can tailor your ad message based on a user’s previous interactions.

2. List-Based Retargeting

List-based retargeting involves serving ads to individuals based on their contact information stored in your database or through lists of existing contacts. 

Typically, you’ll upload a list of email addresses for a retargeting campaign and users with those email addresses are identified and will be served retargeting ads.

⭐ The advantages of list-based retargeting ⭐

    • Customizable: Can customize criteria for ad targeting as you can choose who goes on specific lists based on your contact database.
    • Personalized: Can develop personalized messaging based on the information you have about your contacts.
    • Diverse data sources: Not solely dependent on user behavior, and can use data from various sources like email addresses, customer databases, or CRMs.

The Different Retargeting Methods

In most ad campaigns, retargeting can be achieved through various methods like:

  1. Ad click retargeting: Adds users who click on ads to a retargeting pool using a pixel placed on the ad.
  2. Website interaction retargeting: Creates specific retargeting pools by tagging different sections of the website and retargeting users who visit a particular product page or complete a specific action with relevant ads.
  3. Email retargeting: Retargets users who have interacted with your emails by tracking email opens, clicks, or conversions and creates tailored retargeting campaigns for those users.
  4. Social media retargeting: Retargets users who have interacted with your social media by uploading customer lists or using tracking pixels on social media platforms.
  5. Search retargeting: Targets users based on their search behavior, delivering ads to those who have shown interest in specific products or services.

Retargeting with Axon Audience Manager

Ad click retargeting is a common method used in advertising campaigns. At KORTX, with Axon Audience Manager, we can tag specific website sections to track user interactions and create retargeting pools based on user actions.

Example: When a user visits the fitness section of a sporting goods website, we can create a retargeting pool exclusively for those who have interacted with that section. This allows us to deliver retargeting ads with creative messaging aligned with fitness-related content, making it more relevant to the user’s interests and actions.

Axon uses a JavaScript base code that captures various site events, allowing advanced audience management tools to track, organize, and implement First-Party data segments. 

Axon can catch all of these user interactions and site events.

Personalized Retargeting with Axon Audience Manager.

With Axon Audience Manager, you can ensure an airtight tag implementation structure that enables personalized messaging and helps you track site events and measure campaign success. 

Don’t let site tagging hold back your retargeting strategy!

Try Axon Today

How Retargeting Campaigns Work

For the sake of this guide, we will focus on pixel-based retargeting based on ad clicks, which is the most common method. 

Like other types of advertising campaigns, with retargeting campaigns, you’ll set parameters such as flight dates, budget, geography, target audience, and overall campaign goals. Once you launch a campaign,

  1. Ads are delivered to the internet ecosystem for users to see. 
  2. Some users click on the ads and go to the website. 
  3. The users that click are placed into a retargeting pool based on their initial ad click.
  4. As the main campaign continues, we can serve additional ads to the users in the retargeting pool. 
  5. These ads can be the same or different creative messaging, depending on what the users have seen or clicked on before. The goal is to display varying ad versions to users based on their previous interactions, avoiding repetitive displays of the same ad.

As we serve these retargeting ads, some users may continue to engage and click on them, while others will fall off. For continued engagement, we would serve more ads to get them to take the desired action, such as converting or revisiting the website. 

What if People Stop Clicking on the Retargeting Ads?

Users will not be entirely removed from the retargeting pool, but they may receive fewer impressions compared to more active users. The campaign still considers them, aiming to prioritize users with higher interaction levels who are more likely to engage.

🤔 What role does retargeting play in an advertising campaign?
“Retargeting and understanding your First-Party audience strategy allows advertisers to interact with users who’ve already shown initial interest in their brand. If done correctly, it’s the most effective and efficient way to capitalize on a consumer’s interest in a product or service.

We use Axon’s Custom Audience Builder to customize a client’s First-Party targeting parameters beyond just retargeting users who have visited the site. It’s a key component of many of our client campaigns.”
–Maria Barnd, Senior Account Manager, KORTX

The Benefits of Retargeting Ads

Retargeting is typically part of a broader and long-term campaign strategy. Once you set up your campaign, retargeting runs in the background, targeting more customers to earn more conversions. Brands aim to be the first ones to come to mind when a consumer is ready to buy a product or try a service. 

There are many benefits to retargeting including:

Boosting Brand Awareness

Retargeting ads repeatedly expose users who have previously engaged with your brand, reinforcing your brand messaging and increasing brand recall. 

Example: Let’s say you own an online outfitting store. A user visits your website and explores different products but doesn’t make a purchase. Later, while browsing a news website or using a social media platform, they see ads showcasing the same or similar outdoor products they previously viewed on your website. 

These retargeting ads remind you of your brand and products, keeping your brand top of mind and increasing the chances of that user revisiting your website to make a purchase. 

Increasing Your ROI

With retargeting, there are multiple ways to increase your ROI. One way is to upsell and cross-sell to existing customers who already enjoy your product. 

Another is through abandoned cart retargeting. For indecisive customers, you can use retargeting to send them an email promotion, a reminder to complete the purchase, or serve ads on websites they visit. 

Example: A women’s shoe retailer retargeted its cart abandoners with search ads and saw a 39.8% return on ad spend (ROAS)[1] versus non-life cycle audiences. 

This same retailer also retargeted individuals as “high-value buyers” on social media, resulting in a 75% higher ROAS[1] than the social account average.
[1] Source: eMarketer, 2023

Higher Conversions

Like increasing your ROI, retargeting ads target users who already know and have shown interest in your brand by providing relevant reminders and incentives to revisit, increasing the likelihood of conversions.

❓ What’s one of the biggest benefits of retargeting in advertising campaigns?
“Retargeting can be likened to approaching someone with the highest probability of accepting your invitation for a date. The people in the retargeting pool are the warmest audience and have a higher likelihood of taking the desired action (like making a purchase). This group may have a narrower reach, but they have already shown intent towards your business, making them a great audience for lower-funnel campaigns focused on driving conversions.”
–Josh Pheneger, Account Strategist, KORTX

But it’s not just for new customers. Retargeting ads also work on loyal customers, who are a brand’s most engaged audience. 

Example: A men’s health retailer used its loyalty members and those who engaged with emails in the last 90 days to drive traffic to the site. This retargeting campaign resulted in a 1,060% purchase increase and a 5% higher conversion rate than its account average.

3 Successful Retargeting Examples

This section will show three compelling and effective retargeting campaigns that drove impressive results.

1. Lottery Client x KORTX

Our lottery client wanted to understand how users interacted with their website and online games to capture the right user at the optimal stage of their customer journey. 

What KORTX Did

We used Axon Audience Manager and the client’s own CRM data to build several First-Party segments based on on-site interactions. We also targeted based on where they sit in the funnel, like lapsed users with no purchase, any users who purchased in the last 30 days, and so on.


We had success across the board, driving a 220X return on ad spend (ROAS) for one segment. We also drove a ROAS increase for lapsed and engaged users, resulting in over $23 million in revenue.

2. Watchfinder x Google

Watchfinder wanted to increase sales just like any e-commerce business. 

What Watchfinder Did

Using Google Ads, they created 20 specific audience lists that showed intent but didn’t make a purchase. Then, they defined the audiences by funnel stage, location, on-site behavior, and Internet service provider (ISP). 


In just six months, they achieved an ROI of 1,300%, average order value increased by 13%, and they achieved CPAs that were 34% cheaper than non-brand search campaigns. 

3. National Restaurant and Entertainment Center Client x KORTX

One of our clients wanted to improve its online cost-per-booking for kids’ birthday parties. As online party booking takes several steps, the brand needed to decrease customer drop-offs while recalibrating its retargeting strategy. 

What KORTX Did

Through Axon Audience Manager, we built First-Party segments to isolate users meeting specific criteria (i.e., drop-offs). By creating these segments, our client allocated their budget more effectively by tailoring ad delivery to different stages in the online booking process. 


Using this funnel prioritization approach to retargeting, we helped our client achieve and exceed their cost-per-booking goal of $50, resulting in an average revenue per party booking of $265. We also delivered a $4.04 cost-per-booking while balancing CTR and viewability performance.

Retargeting: A Complement To Your Campaigns

Only a small fraction of website visitors convert on their first visit, so retargeting is a great strategy to re-engage them. 

Successful retargeting campaigns are a component of your overall campaign strategy, sending ads to users who previously interacted with your website in hopes they’ll convert.

Retargeting capitalizes on user intent and delivers relevant ads to keep your brands at the forefront of your customers’ minds, leading to increased engagement, conversions, and marketing success. 

🎯🎯 Enhance Your Campaign with Retargeting

Don’t let potential customers slip away! Through our advanced retargeting strategies, KORTX can help you maximize your ROAS and conversions. 

Through Axon Audience Manager, we offer precise targeting, personalized messaging, and comprehensive tracking abilities to help you catch the other 98% of website visitors who haven’t yet converted.

Contact KORTX Today!

About the Author

Drew Pytel is a Senior Account Strategist at KORTX. He enjoys golf, bourbon, and being active with his wife and 3 kids.

Drew Pytel

Latest Stories

Here’s what we've been up to recently.

Get our stories delivered

From us to your inbox weekly.