Does Retargeting Ads on Facebook Really Work?

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Have you ever wondered if those retargeting ads on Facebook that follow you around after you’ve looked at something online are actually effective?

Facebook retargeting ads can still be effective when used strategically. Retargeting ads allow you to re-engage with customers who have already interacted with your website increasing the likelihood of conversion. 

So, let’s dive deep into retargeting ads and see does retargeting ads on Facebook really work.

Well, there are two main ways to look at whether Facebook retargeting ads work or not.

There’s what we call “attributed sales,” which happens right after someone clicks on an ad. But then there’s something even more important called “incremental sales.”

Incremental sales are the extra purchases that happen because someone saw an ad, not just because they were going to buy something anyway.

It’s like if you weren’t planning to purchase sneakers, but then you saw an ad that reminded you how much you liked them, and so you decided to buy them.

That sale is an “incremental sale” because the ad convinced you to make a purchase you weren’t already planning to make.

Incremental sales example
Source: Skai

So, when we talk about whether Facebook retargeting ads are worth it, we’re asking if they could make these incremental sales happen.

If all they do is get credit for sales that would’ve happened without the ad, then they might not be as valuable as we think.

But if they can actually get people to make purchases they weren’t already planning on, that’s when we know they’re really working to help grow your business.

Impact of Facebook Retargeting Ads

When you look at the numbers for Facebook retargeting ads, you might be surprised. They challenge what we think about how well they work.

Despite a notable 142% increase in purchases through Facebook ads, alongside a whopping 251% rise in revenue attributed to these ads, a deeper analysis reveals a concerning trend: a decline in both first-time and repeat orders by 18% and 36%, respectively.

retargeting ads on facebook results

This data shows a case for re-evaluating the actual benefits of retargeting ads. While on the surface, retargeting campaigns appear to drive significant sales growth, the underlying numbers tell a different story.

The decrease in both new and returning customers suggests that these ads may primarily be converting users who were already likely to purchase, rather than effectively attracting new customers or encouraging additional purchases from existing customers.

So, the bodle line is to approach retargeting with a critical eye, focusing on strategies that not only boost attributed sales figures but also drive genuine growth by engaging new customers and fostering loyalty among existing ones.

Misleading retargeting success highlights the need for a data-driven approach to digital marketing.

Are Retargeting Ads on Facebook Really Effective?

Even though it might look like retargeting ads are doing great because they’re getting a lot of clicks and supposedly driving sales, there’s more to the story.

To really say if retargeting ads are worth it, we have to see if they bring in new sales – sales that only happen because someone saw an ad.

If all the numbers are going up but we’re actually selling less to new customers or even seeing our regular customers buy less, then it might mean we’re putting too much faith in these ads. It’s all about finding new growth, not just chasing the same sales over and over.

Should You Run Facebook Retargeting Ads?

Deciding to use retargeting ads on Facebook is a big decision. It’s not just about throwing money at ads and hoping for the best.

It’s recommended to only use up to 15% of your total ad budget for retargeting. This is a smart way to make sure you’re not spending too much budget just to reach people who might buy from you anyway.

So, keeping your retargeting ad spend under 15% helps you make sure you’re using your money wisely.

It’s all about getting more sales without wasting a budget on unnecessary ads. This limit makes you think carefully about who you really need to target with your ads and keeps you from spending too much on people who are already likely to buy.

By sticking to this rule, you can balance your budget better. You’ll have enough to reach new people who haven’t heard of you yet and also remind those who have shown interest before. 

Disadvantages of Retargeting Ads

Now, let’s explore some of the disadvantages of Facebook Retargeting ads.

First, your audience might get tired of seeing the same ads all the time. This is called “ad fatigue.

Then, there are worries about privacy because these ads need to track what your audience does online to work.

Plus, these ads need to really bring in new sales to be worth it, not just take credit for sales that would’ve happened anyway.

If you focus too much on trying to sell to people who already know about you, you might miss out on reaching new customers. There’s a point where spending more on retargeting ads doesn’t really add anything new.

So, the key is to find the right balance. You want to use retargeting ads to remind interested people about what you offer, but not so much that it’s all you do.

Spreading your efforts to attract a fresh audience is just as important for growing your business.

When Should You Start Retargeting on FB?

Starting retargeting ads isn’t just about having a lot of people to show ads to. It’s about knowing exactly who to target and when.

This means looking for the right moment when someone is just about ready to make a decision, making your ad the little nudge they need. 

In practice, that means having at least 10, 000 website visitors per month, and clear exclusions of all your customers with purchases. 

Get started with retargeting once you’re clear on who’s most interested and how you can reach back out to them without going overboard with your budget.

So, make sure every ad brings you closer to your goal of growing your business.

Budget allocation

As we mentioned before, a golden rule is to keep it under 15% of your total ad budget. This isn’t just a random number—it’s about making sure you’re spending smart and not putting all your eggs in one basket.

Staying within this limit helps you balance your efforts. It’s enough to remind interested audiences about your products without overshadowing the need to attract new customers.

Plus, it keeps you from overspending on the audience who might already be on their way to buying from you.

Source: Lebesgue AI CMO

The key here is efficiency. You want every dollar you spend to work hard for you. That means not just going after easy wins but focusing on turning those on-the-fence visitors into happy customers.

By sticking to this budgeting rule, you’ll have enough left to explore other ways to grow your audience too.

Best Retargeting Audience for Facebook Ads

The best retargeting audience is one that’s likely to offer the highest incremental value. This means targeting customers who have shown a high intent but have not converted, excluding recent purchasers unless targeting for cross-sell opportunities. 

An audience segmented based on specific behaviors and interactions with your brand, such as cart abandoners or high-engagement users who haven’t made a purchase, can yield more incremental conversions.

Summing up

To sum up, Facebook retargeting ads could be effective for engaging with customers who have already shown interest in your brand.

They offer the potential for a good return on investment by guiding these customers towards conversion. 

However, it’s important to strike a balance with ad frequency to avoid fatigue. Regular analysis of performance data is key to refining strategies and maximizing the effectiveness of Facebook retargeting ads over time.

With the help of Lebesgue: AI CMO, you can easily track and attribute sales to your Facebook ads, gaining insights into their impact on your business growth.

Understand and optimize your performance with Lebesgue


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