How to Use Retargeting to Convert Lost Leads

Retargeting is a digital marketing strategy that helps businesses reconnect with potential customers, or social media but did not complete a purchase or conversion. These visitors may have browsed products, added items to their cart, or even started filling out a form but left before taking the final step. Retargeting works by using cookies or tracking pixels to display targeted ads to these individuals as they browse other websites, scroll through social media, or search online.

Most consumers don’t make a purchase or commit to a service on their first visit. In fact, studies show that only about 2% of website visitors convert on their initial visit. Retargeting helps bring back the remaining 98% by keeping a brand visible and reminding users of what initially caught their interest.

Companies across industries use retargeting to stay top of mind. For instance, Zappos retargets shoppers who browse its footwear selection but don’t make a purchase, showing them ads featuring the exact shoes they viewed. This strategy increases the likelihood of conversion by reinforcing the shopper’s interest.

The Different Types of Retargeting

Retargeting can take multiple forms, each with its own benefits depending on the business’s goals and the consumer’s behavior.

1. Pixel-Based Retargeting

This method tracks website visitors through a small piece of code (a tracking pixel) placed on a website. When someone visits the site, the pixel drops an anonymous browser cookie that allows advertisers to show them ads later.

For example, if a user visits an online clothing store like Everlane and views a particular jacket, they may later see an ad for that same jacket while browsing another website or social media platform.

2. List-Based Retargeting

This approach involves using customer data, such as email addresses, to create a retargeting audience. Businesses upload a list of contacts to platforms like Facebook or Google Ads, which then match the data to users and show them targeted ads.

List-based retargeting is useful for engaging with people who have already interacted with a brand in some way—whether by signing up for a newsletter, downloading a free resource, or making a past purchase.

3. Social Media Retargeting

Platforms like Facebook, Instagram, LinkedIn, and X (formerly Twitter) allow businesses to retarget users who have interacted with their content or website. This form of retargeting is particularly effective because it integrates seamlessly into a user’s social feed, making the ads feel more natural and less intrusive.

4. Search Retargeting

Unlike traditional retargeting, which focuses on users who have already visited a site, search retargeting serves ads to users who have searched for relevant terms but haven’t yet visited the advertiser’s website. For example, a fitness equipment retailer might retarget people who recently searched for “best home treadmill” but haven’t landed on their site yet.

How to Set Up an Effective Retargeting Campaign

Retargeting can significantly improve conversion rates, but to get the best results, it must be executed strategically.

Segment Your Audience

Not all lost leads are the same. Some visitors abandon their cart at checkout, while others might have only browsed a homepage before leaving. Treating all users the same and showing them identical ads is ineffective.

For example, someone who abandoned a shopping cart is much closer to converting than someone who just visited a blog post. A brand like Wayfair might target cart abandoners with a discount offer, while more casual visitors may see ads that reinforce brand trust.

Use Dynamic Retargeting Ads

Dynamic retargeting takes ad personalization to the next level by displaying products or services that a user specifically viewed. Instead of showing a generic ad, businesses can remind users of the exact items they were interested in.

For example, Sephora uses dynamic retargeting to show shoppers the makeup products they browsed, often accompanied by customer reviews or limited-time offers. This level of personalization increases the likelihood of conversion.

Optimize Ad Frequency

While retargeting is effective, bombarding potential customers with too many ads can have the opposite effect, leading to ad fatigue or irritation. The right balance depends on the industry and audience, but a general rule is to limit ad frequency to 10-15 impressions per user per month to maintain engagement without overwhelming potential customers.

Experiment with Different Ad Formats

Retargeting ads don’t have to be limited to static banners. Businesses can use video ads, carousel ads, and interactive formats to re-engage their audience. Platforms like Facebook and Instagram offer engaging retargeting formats that allow brands to showcase multiple products or customer testimonials.

Offer Incentives and Time-Sensitive Promotions

A well-timed incentive can push hesitant buyers over the edge. Offering a discount, free shipping, or an exclusive deal can increase the chances of conversion.

For example, an e-commerce store could retarget users who abandoned their cart with a limited-time 10% discount code. Nordstrom frequently uses this strategy by sending cart reminders with an added incentive like free shipping.

Use Retargeting for Brand Awareness and Upselling

Retargeting isn’t just for recovering lost leads—it’s also a powerful tool for brand awareness and increasing customer lifetime value.

• Brand Awareness: Retargeting ads keep a brand in front of potential customers, even if they aren’t ready to convert immediately.
• Upselling & Cross-Selling: Businesses can retarget existing customers with complementary products or upgraded services. For instance, Peloton retargets customers who purchased a bike with ads promoting its app subscriptions and accessories.

Avoiding Common Retargeting Mistakes

Retargeting is highly effective when done correctly, but some common mistakes can reduce its impact.

• Failing to Exclude Converted Customers – If a user has already made a purchase, continuing to show them the same retargeting ad is a wasted impression. Adjust audience settings to exclude buyers or switch to upselling ads.
• Using Generic Messaging – Retargeting works best when ads are specific and relevant. A vague “Come back and shop” ad is far less compelling than one that highlights the exact product left behind.
• Ignoring Mobile Users – Many consumers browse on mobile but complete purchases on desktop. Retargeting campaigns should be optimized across devices to capture this behavior.

Final Thoughts

Retargeting is one of the most effective ways to bring lost leads back into the sales funnel. By leveraging personalized ads, audience segmentation, and compelling incentives, businesses can significantly increase conversions and maximize marketing ROI.

For companies looking to improve their digital marketing strategy, retargeting offers a second chance to turn missed opportunities into revenue. Whether it’s through dynamic product ads, social media campaigns, or email list-based targeting, the key is to stay visible, relevant, and engaging.