How to Crush It with Facebook Retargeting Ads in 2024

Facebook retargeting ads allow you to recapture lost leads and sales, but the setup can scare most marketers away from what could be one of the highest ROI campaign strategies available.

In this guide, we'll cover what retargeting ads are, how to create retargeting audiences, and 6 winning strategies you can implement today to increase your ad ROI.

You'll also find additional tips and best practices for how to write your ad copy and design your graphics for the best results.

What are Facebook retargeting ads?

In the United States, the average cart abandonment rate for Q2 2020 through Q2 2021 was about 76%. That means you're only capturing one out of every four sales opportunities.

So, what happens to the other 76% of potential customers?

You can leave it to chance that these people come back and buy later, that's true. But the only real way to make sure that you get them back to your site is with retargeting ads.

By using a piece of tracking code called Facebook Pixel, you can serve ads to (or as we call it, retarget) those who have engaged with your company at some point to get them back to your website.

The ultimate goal, of course, is that they eventually become your customer or a lead.

The Importance of the Marketing Funnel

You shouldn't ask someone to marry you on a first date, and likewise, you shouldn't ask a complete stranger to buy your product off the bat.

In fact, those who have been served with a retargeting ad are 3x more likely to click than people who haven't interacted with your brand at all.

(We're sure the marriage stats are higher)

Just like in the dating world, buyers are looking to do more research on their options before they commit to the big sale. They need to identify their problem, research the different options they have available, and then try one they think suits their needs.

If they are successful with what they found, they typically turn into repeat buyers and happy customers. If not, they go back to the drawing board and repeat the cycle again.

As marketers, we need to align our campaigns to follow each customer on their own journey to help them move through each step. This process is called the marketing funnel.

There are four main stages in the marketing funnel: Acquisition Prospecting, Acquisition Re-engagement, Retargeting, and Retention.

Prospecting. This is the 'blind date' phase of the marketing funnel. Here, we're casting out our net to find audiences who may be interested in what we have to offer. This stage of the funnel is like a 'warm handshake' to let our strangers know who we are and how we can help them solve their problems.

Re-engagement. After a successful first date, you're likely to pick up your phone and schedule another one—thus the re-engagement phase. Since we've 'met', it's time to take the next step and get them more engaged with our brand by visiting our website or storefront.

Retargeting. If you've been successful so far, you want to take things to the next level and make it official—by getting that sale. In the retargeting phase, we want to recapture those who have visited our page but have not become customers with ads. These should be focused on showcasing your value and sweetening the pot with an irresistible offer.

Retention. Once you've made your relationship official, you still have one job left to do—ensure you keep your customers happy and coming back for more. Retention ads help expand your relationship by upselling/cross-selling additional items that make your customer's life easier and continue to solve their problems.

Each of these stages has a completely unique message, design, and targeting strategy you need to use to fuel the next step.

Luckily for you, we're going to give you strategies to use in re-engagement, retargeting, and retention campaigns in this very post. :)

How does Facebook retargeting work?

It might seem like magic (admittedly, of the 1984 kind), but the inner workings of retargeting have to do with a little thing called the Facebook (or Meta) Pixel.

To put it simply, the Facebook Pixel is a bit of tracking code you add to your website. Using this code, Facebook is able to track users who leave Facebook and visit your page. The Pixel is triggered (or, as it's commonly referred to, fires) when those actions happen. It can be things like viewing a page, submitting a form, scheduling a call, or purchasing an item.

While we can't see the exact person who took an action, Facebook does allow us to group these people into different audiences to retarget with ads.

Note: If you haven't installed a Facebook pixel yet, you can find our complete guide on how to do so here.

Why you need the Facebook Pixel for retargeting campaigns

If you're thinking about creating retargeting campaigns without installing the Facebook Pixel, I have a word of advice:

Save yourself time and simply light your money on fire now.

That may seem harsh, but give me a moment to explain my logic.

Not only does the Pixel allow us to find and retarget those at the most crucial point of the funnel, but it also allows us to directly attribute those purchases to our advertising efforts.

Without tracking how much profit you make in relation to how much you spend, you can easily find yourself in a situation where your ads are costing you more than you make without even realizing it.

There's really no reason not to be using it, and every reason you should.

That being said, the Facebook Pixel does have some downsides and words of caution.

Since the release of iOS 14, those using Apple devices must manually consent to have their data tracked. If they don't, these people will not be eligible to be retargeted with your ads.

The best way to combat this incredible data loss is through server-side tracking.

Server-side tracking is a way of transferring data directly from your server to Facebook. With this method, your server acts as the intermediary between the browser and your ad network. This turns what would be a third-party cookie into a first-party cookie, which is not restricted by iOS changes and allows for greater security and control.

While the Facebook Pixel is (relatively) easy to set up, server-side tracking is much more difficult without outside help.

Thankfully, we offer a solution to your tracking woes: the Madgicx Cloud Tracking דervice.

With this service, our team of ad experts will set up every piece of tracking code needed to ensure you're capturing the maximum amount of data you can from your Facebook ads. Our customers have seen a minimum of 20% more tracking data after setup—which means more users in your retargeting audiences and better attribution across the board. And the best part is that you can try it for 14 days for free!

After all, at the end of the day, your decisions are only as good as your data.

How to create Facebook retargeting audiences?

Now that we've covered the tracking side of things, let's move on to how we set up some of our audiences!

There are currently 13 types of custom audiences you can create on Facebook, so the answer to "How do I create a retargeting audience?" is a broad one. Instead, we'll cover some of the most effective ones (which we'll be using in our strategies section).

To start off, head over to the Audiences section of your Business Manager account. Here, click on the Create Audience button.

We'll be working with the Custom Audience here today. Click on Custom Audience, and you'll see a variety of different choices available:

This is the starting point for the audiences we'll cover in the next step.

Website Custom Audience

One of the easiest types of audiences (and the first one on the list) is a Website Custom Audience. After you've installed the Facebook Pixel, you can create Custom Audiences that retarget your website visitors by utilizing the tracking code you added to your site.

There are several different ways you can segment these audiences for retargeting. Some of the options available are:

• By those who have visited any part of your website within the past x days (Max. 180)
• Those who have visited specific pages (using URL slugs)
• Those who have spent the most time on your site
• Those who have triggered specific pixel events (purchase, add to cart, lead, etc.)

The last method is one of the most powerful options available today for retargeting and will be one of the prime Custom Audiences we'll use in the strategy section of this article.

Engagement Custom Audience

Next on our list of Custom Audiences are Engagement Custom Audiences. Website Custom Audiences deal with activity that happens outside of Facebook, but Engagement Custom Audiences are built around engagement that happens on Facebook or Instagram.

These audiences make up the bottom half of the Custom Audience page:

Each of these options allows you to retarget those who have interacted with the corresponding asset. Selecting video will allow you to target those who have viewed a video; events allow you to retarget those who have engaged with your events, etc.

Each of these has a slightly different setup, but typically follows the pattern of selecting your asset, choosing the type of engagement, and then saving it.

The majority of these will fall under the Re-engagement phase of the Facebook ad funnel, apart from shopping and lead form (since those are more suited to bringing a contact back to finish an action, thus are in the Retargeting phase).

Customer List Custom Audience

Another frequently used Custom Audience is the Customer List Custom Audience.

Here, instead of using the Facebook Pixel to retarget your audience, you can upload a list of your customers or anyone in your email database and serve them a Facebook ad. Since we already have data on a customer, this technically falls under the retention phase of the funnel.

However, these audiences are important as we need to ensure we are excluding these contacts from our retargeting campaigns. After all, it’s no use to spend money to ‘acquire’ contacts whose data we already have.

To get started, you need to download the template. There's also a set of instructions you need to follow when adding contacts to the template to make sure the data read properly, such as following the right two-letter country code. It's important that you follow all the proper formatting guidelines in order to increase the chances of successfully matching all of your contacts.

Only email is required, but the more information you can add, the higher your match rate (and audience size) will be.

After that, you just need to match the fields on the form to the proper contact fields and do one last check for errors. Once your audience has populated, you can use it in one of your campaigns. The minimum requirement for this is 1,000 contacts.

Conversely, you can also sync your Mailchimp account to automatically populate your list if you're using it already.

Note: Since this method is manual, it's often time-consuming and needs frequent updating. Some CRMs (HubSpot, ActiveCampaign, etc.) have native integrations with Facebook ads and can create and update these lists dynamically.

6 winning Facebook retargeting audiences

Since we've covered all the foundations of how retargeting works, it's time to cover the best part— how to use them strategically in the funnel.

Here, I'm going to focus on strategies that happen after the initial cold touchpoint as these are the Facebook ads that focus on retargeting.

[Re-engagement]

In this stage, we focus on finding warm audiences in an attempt to get them to visit our store or landing page.

Find warm audiences with video

Video is one of the most engaging ways to show off your brand to a new audience, and it gives us a good entry point for our first level of retargeting.

In this example, we want to create an audience based on those who have watched 95% of the video we used in our cold audience campaign.

WHY THIS WORKS: If someone has taken the time to watch your video to near completion, it's a sign that they're more than likely interested in what you have to say. This makes them a good candidate for the next step of the cycle.

I've selected 95% here as it represents the most highly engaged. However, 50% and 75% are also okay choices. Anything lower than that would likely need another touch before they move on.

Re-engage your Facebook fans

Following the same line of thought, another good candidate for re-engagement is right in your own digital backyard—your Page fans.

WHY THIS WORKS: Your Page fans have not only interacted with your content but have also signed up for more. In this regard, they've opened the door to the rest of the funnel themselves.

If you want to cast a bigger net, you can also use other Page engagement options like those who have visited your Page and taken any action at all, or those who have engaged with any of your posts.

[Retargeting]

This step is for retargeting those who have left our store or landing page without completing our desired action (purchase, form submission, etc.).

Recapture lost sales with Dynamic Product Ads

In our eCommerce ads guide, we mentioned how important Dynamic Product Ads (DPAs) are. In short, they allow us to combine the power of our Pixel with our digital storefront and show pictures of products our users saw before they exited our page.

For this campaign, we want to target anyone who has added any product to their cart in the past 3 days.

Why this works: Given they've already added this product to their cart, they have some obvious interest in the product.

The drop off could be due to price, interruption, or user experience——but regardless of the reason, recapturing this high-intent audience is critical. The default option is 14 days. However, I think waiting so long to retarget such a warm audience is too much. 3 days is quick enough to still be relevant while creating an audience that's big enough to serve properly.

Recapture lost leads

If you're more focused on leads and not direct sales, don't worry—we haven't forgotten about you. Just like with sales, we can recapture those who have viewed your signup form but have not submitted their information.

The exact setup of this audience depends on where they're submitting their information.

If you're working with a form hosted on a landing page that you're driving traffic to, you would create a website audience based on those who have visited your landing page but have not triggered the lead event (or whatever event you're using as the confirmation action).

If you're using a lead generation form on Facebook, you can create an Engagement Custom Audience using those who opened but did not submit the form.

Why this works: Much like the previous strategy, these people have some interest as they're interacting with your ads—this is just the lead gen version.

[Retention]

Our funnel has worked and we've got ourselves a shiny new customer. Hooray! Now, we can increase the chances they stick around (and generate more revenue) with retention.

cross-sell to your current customers

In 2020, Apple made over $6 billion in revenue from its accessories—which is more revenue than the Mac computers brought in. This points to a very interesting fact: That's a ton of cash in the cross-sell.

With this strategy, we want to retarget those who have bought a product from us with another relevant product (bonus points if it improves product A's experience). For example, we could retarget those who have purchased a mobile phone with a phone case.

Again, we would be using the power of the product catalog and product sets to do the work for us.

You'd need to start off by creating a custom audience based on those who have purchased a product from a specific product set. (i.e., the mobile phones in this analogy). Let’s call it product set A.

Then, when creating your ads, you can choose to create an ad based on product set B (i.e., your phone cases) while targeting those for this audience.

WHY THIS WORKS: You've done all the hard work to build trust between you and your customer. Not only can cross-selling increase revenue, but it can increase brand 'stickiness' and improve product experience in the meantime.

Upsell your current customers

In a twist on the above strategy, you can also upsell your customers. With this strategy, we want to target those who have purchased a mid-price item and showcase items that would give us a bigger return instead.

For example, retargeting those who purchased mid-price shoes from a specific brand with that same brand's luxury shoe line.

The targeting for this would be identical to the example above—we would target those who purchased from product set A (the cheaper shoes) with ads that serve products in product set B (the expensive ones).

WHY THIS WORKS: Although it's similar to cross-selling, upselling can be better for situations where the customer has no need for a follow-up item. Here, we're capitalizing on our knowledge of the customer's product preferences and offering them more of what they like from our store.

WARNING: Exclusion is just as important as inclusion!

The most important thing to remember when setting up your audiences at each funnel stage is to exclude the audience from later funnel stages. Otherwise, you'll end up targeting the wrong person at the wrong time (and wasting money in the process).

For example, if you build a campaign geared towards acquisition and forget to exclude your retargeting and retention audiences, Facebook will spend all the budget on the warmer audiences instead of going after the new audience (defeating the purpose entirely).

You can waste hours on creating these audiences and their exclusions manually, or, you can try Madgicx's Audience Launcher and set them up in just a few clicks.

Audience Launcher comes stacked with over 100+ pre-made audiences across every stage of the ad funnel, and will automatically exclude audiences in the other funnel stages for you.

Best practices for Facebook retargeting ads

If you want to make sure that your ads are highly successful, you need to make sure you're following a few best practices.

Hit 'em with your best shot. For retargeting campaigns, this could be the last time you ever get a chance to talk to your audience—and you should treat it as such. To this end, deal out your best discounts or offers for retargeting, especially for add-to-cart drop offs.

Be memorable. Consumers see ads everywhere in life, and a poorly designed ad won't get a second look. Use tools like the Facebook Ad Library to research competitor trends or hire an on-demand design team to do it for you. Aka, Sparkle :)

Focus on benefits, not features. Steve Jobs could have walked up on stage to pitch the first iPod and talked about the design specs, inner workings, or other technobabble—but he didn't. Instead, he focused on a phrase that summed it up perfectly: "1,000 songs in your pocket.” Similarly, you need to be sure every word in your ad, at each stage of the funnel, encompasses your brand's unique value and what you can solve for your consumer.

Conclusion

Whew! We've covered a ton of material today: from how to install the Pixel through how to create Custom Audiences to 6 retargeting strategies you can use to create high-converting campaigns.

We've also shown you how to save time by using Audience Launcher to instantly deploy over 100+ audiences with your 7-day free trial as an added bonus. :)

As we mentioned earlier, proper tracking will either make or break your campaign. If you want to guarantee you're tracking everything and making the best data-driven decisions you can, start for free for 14 days with Madgicx Cloud Tracking team and let us handle the setup for you completely.