This is a complete guide to Facebook Retargeting Ads in 2020.

In this new guide you’ll learn exactly how to create successful retargeting campaigns using our:

  • 4 most effective retargeting ads
  • Retargeting campaign setup
  • Retargeting campaign management

Let’s get started.

Facebook Retargeting Fundamentals

As you start running Facebook ads, you will definitely have noticed that not everybody who visits your store completes a checkout.

Out of 100 people that visit your online store, perhaps only 2 people actually purchase something.

What you might not know is that the remaining 98 people aren’t necessarily uninterested in your products.

Maybe they were interested in your products but were not quite ready to checkout yet. Or, they were ready to purchase something but got distracted by something in real life and forgot to checkout.

Regardless of whatever happened, there is a very effective method of bringing these customers back to your store called retargeting.

Retargeting is when you target an audience that previously engaged with your brand or website, but didn’t commit to a purchase.

The goal of retargeting is to keep your brand at the forefront of your customer’s mind and bring them back to your store in hopes of converting a purchase. 

facebook retargeting

Retargeting an extremely cost-effective way of generating additional revenue for your online store. Furthermore, it’s easy to setup and if properly executed, can significantly increase your store’s profitability. 

If you’ve never setup retargeting campaigns before or haven’t seen much success from your own, don’t worry.

Effective Facebook retargeting is all about having the right setup, which we will teach you today. 

We will walk you through our most effective types of retargeting ads, how to setup your campaigns, what audiences to target, what your retargeting budget should be, and how to scale your retargeting campaigns.

Here’s an example of one of our successful retargeting campaigns:

facebook retargeting ads

With a bit of trial of error and some help from us, you can achieve these numbers as well.

Top 4 Most Effective Retargeting Ads

Although there are many types of retargeting ads, we’ve seen the most success using a combination of:

  • Testimonial ads
  • Functionality ads
  • Money-back guarantee ads
  • Coupon ads

We choose to use different types of ads to ensure that the audience will see at least one ad that addresses whatever prevented them from purchasing in the first place.

There’s always a reason why an interested customer didn’t purchase the first time around, so our retargeting campaigns focus on addressing potential issues.

Also, it’s always a good idea to change up the creative. People get tired of seeing the same advertisement and will start to ignore the ad. 

Let’s take a closer look at each retargeting ad strategy so you learn what each one does and how you can utilize it yourself. 

Testimonial Ads

These are advertisements that are designed to address any potential reservations about purchasing customers may have had due to lack of social proof or customer testimonials.

Testimonial ads help reaffirm your brand’s trust levels of consumers who are still new to your brand.

For the ad, we recommend either using images of your product coupled with a testimonial quote, or a video of a customer talking highly about your products. 

The goal of the testimonial ad is to bring some credibility and trust to your brand and products. Keep this in mind when choosing the testimonial you want to share on the retargeting ad.

If you don’t have any testimonials or ideas about what to create, feel free to ask previous customers to send you a picture of themselves with the product.

Also ask them to include a review of their thoughts on your products and brand. This may seem like a lot to ask a customer, but happy customers are more than likely willing to help new businesses.

Functionality Ads

The purpose of this retargeting ad is to address problems that occurred when a customer viewed your video advertisement.

For this reason, this type of ad is only relevant if you have videos as the creative of your advertisement.

The purpose of functionality ads is to educate your audience on your brand and product in case they never actually saw your original video advertisement, or they watched a few seconds but didn’t really pay attention. 

The advertisement should be similar to the video ad you created for your cold audience, however, mix up the footage and include details that you left out. Instead of a video, you could also use a carousel of images.

The text, or copy, of the ad should describe the functionality of the product and offer a solution to a problem the customer is having.  

Money-Back Guarantee Ads

This is another ad that increases the trust of your brand with potential customers. The goal of the money-back guarantee ad is to ensure the customer that they have no risk when it comes to purchasing a product.

A money-back guarantee is when the customer has full freedom to return their products for a refund.

You would only run this ad if your refund & return policies actually offer a money back guarantee and truly comes with no strings attached.

Any type of creative can work for this advertisement because most of the value from this retargeting ad comes from the text, or copy.

Using an image of the product is completely fine.

For the ad copy, let potential customers know that there is a 100% money back guarantee so they shouldn’t hesitate to try your products. 

Coupon Ads

Coupon ads are extremely effective if many of your potential customers find the pricing of your products to be the issue. We suggest testing anywhere from 5% – 30% off coupon codes that your customers can use. You can either put the coupon code in the text of the ad, or in the actual image itself. 

Now that we’ve introduced our 4 top performing retargeting ads, it’s time for you to setup your own retargeting campaign.

At this point, you should already have the Facebook Pixel installed on your website and know how to create custom audiences.

If you have no idea what these things are, please skip the following sections until you find “Beginner Retargeting: Initial Setup” and read that section first before setting up your retargeting campaign.

If you are already familiar with the Facebook Pixel and custom audiences, please continue reading to learn the retargeting campaign setup. 

Effective Retargeting Campaign Setup

Our typical retargeting campaign setup is straightforward and easy to follow.

You will be using a CBO (campaign budget optimization), with a daily budget that equals 10% of the total daily spend of your other campaigns.

Campaign Budget Optimization

For example, if you’re currently spending $1000/day on Facebook ads, you will want to budget your retargeting CBO at $100. 

Facebook Campaign Budget Optimization

You will create a total of 7 ad sets for your retargeting campaign which will use each of the following custom audiences:

  1. Video Views 95% – 7 Days
  2. Video Views 75% – 7 Days
  3. PageView – 7 Days
  4. Facebook Engagement – 7 Days
  5. Top 25% Site Visitors By Time Spent – 7 Days
  6. Add To Cart – 7 Days
  7. Initiated Checkout – 7 Days

On your Facebook Business Manager dashboard, click ‘Audiences’ on the left-hand side.

Facebook Audiences

Next, click ‘Custom Audiences’ and ‘Create a Custom Audience’.

Facebook Custom Audiences

Create these 7 custom audiences:

  1. Video Views 95% – 7 Days
  2. Video Views 75% – 7 Days
  3. PageView – 7 Days
  4. Facebook Engagement – 7 Days
  5. Top 25% Site Visitors By Time Spent – 7 Days
  6. Add To Cart – 7 Days
  7. Initiated Checkout – 7 Days

And then add one custom audience to one ad set. Each ad set will contain a different custom audience.

So, you should have 1 CBO campaign and 7 ad sets inside the campaign.

If you haven’t run any video advertisements, don’t create the ‘Video Views’ custom audiences as you won’t have any data to use for them. If this is the case, you will only have 5 ad sets and 5 custom audiences.

Within each of these ad sets, you will place 3 different retargeting ads. These don’t necessarily have to be different ad types.

For example, you can use 2 testimonial ads and 1 functionality ad. We recommend you mix it up and try different things to learn what works best for your products and audience. 

For the other settings in your retargeting setup, you will use automatic placements, automatic bidding, and schedule to launch at 12:00 AM the following day. 

In summary, your retargeting campaign will consist of 1 campaign using CBO, 5 or 7 ad sets, and 3 ads per ad set.

Managing Your Retargeting Campaign

After you have let your retargeting campaign run for a day or two, you should check in to view the results.

Always make sure you adjust your retargeting budget to 10% of your daily ad spend.

Furthermore, retargeting campaigns generally perform well right off the bat, and you should gradually increase your budget every few days if this is the case. 

However, don’t go over 10% of your daily ad spend when increasing your retargeting campaign budget.

The CPP, or cost per purchase, will generally increase as you exhaust your audience too quickly.

If your retargeting ads start to perform badly after increasing the budget, lower the budget to what you previously set it at. 

Beginner Retargeting: Initial Setup

If you are completely new to Facebook ads or have never run them before, there’s a few things you need to know before setting up a retargeting campaign.

Retargeting is when you advertise to customers who have interacted with your Facebook ads before. Facebook collects information of your website visitors using something called the Facebook Pixel.

Facebook Pixel

Before running ads, the first thing you need to do is to create a Facebook Pixel for your ad account and connect it with your Shopify (or other platform) store.

Go to your Facebook business manager and go to the business settings. On the left-hand side, click ‘Data sources’ and then ‘Create a Pixel’.

Facebook Business Settings

Fill in the prompts and choose ‘Set up the pixel now’

Facebook Pixel

Next, choose ‘Add code using a partner integration’.

Facebook Pixel

Choose the platform you are using and connect the pixel to your website.

Facebook Pixel

The Facebook Pixel is the tool that collects the data of everyone who visits your website.

It tracks all the actions they take such as which pages they view and which products they add to cart. 

If you’ve just installed your Pixel, you will have to run regular advertisements for at least 7 days before setting up a retargeting campaign.

The retargeting campaign requires data from your pixel to create custom audiences. If you’ve run ads for at least 7 days with the Facebook Pixel, the next step is to create custom audiences.

Custom Audience

Go to your Facebook Business home screen and click audiences on the left-hand side. From here, click ‘Create a Custom Audience’.

Create 4 separate custom audiences using ‘Websites’ as your source:

  1. PageView – 7 Days
  2. Top 25% Site Visitors By Time Spent – 7 Days
  3. Add To Cart – 7 Days
  4. Initiated Checkout – 7 Days

Next, create 1 additional custom audience using ‘Facebook Page’ as your source. Choose ‘Everyone who engaged with your Page’ in the past 7 days. At this point, you should have 5 custom audiences. If you have used videos in your Facebook ads, create 2 more custom audiences using ‘Video’ as your source.

  1. Video Views 95% – 7 Days
  2. Video Views 75% – 7 Days

Now, you should have 7 total custom audiences if you use video ads and 5 custom audiences if you don’t use video ads. Next, you can scroll back up to the “Typical Retargeting Campaign Setup” section of this article and follow from there.

Facebook Ads Custom Audience

Why Are Retargeting Campaigns Effective?

There’s a reason why every major brand, such as Adidas or H&M, use retargeting campaigns.

You have probably noticed that after you browse or shop online, you start seeing that store’s advertisements on your Facebook and Instagram feed. The reason for this is that they are retargeting you.

With the amount of competition in the ecommerce space nowadays, big brands are fully utilizing retargeting campaigns themselves. Unless a buyer has an extremely high impulse or need for a product, it is rare for consumers to buy upon their first viewing.

A lot of sales are made through reminding them of the brand or offering additional discounts and value. 

Simply put, retargeting campaigns are effective because consumers can have difficulty committing to purchasing despite showing interest in the products. It can take a few reminders before they fully make up their mind to finally input their payment information and check out. 

Studies have shown that around 97% of online store visitors don’t buy anything on their first visit. This is why retargeting campaigns are so important and can help generate a lot of additional revenue.

Closing Thoughts on Facebook Retargeting Ads

Although this setup seems extremely simple, it’s what we’ve actually used on our successful 6-7 figure stores. Regardless of how straightforward a method may seem, the key is always the results, and we’ve seen phenomenal results from using these ads.

If you’d like to learn more about Facebook ads and dropshipping, please check out our YouTube channel with over 100,000 subscribers. You’ll find many video tutorials and walkthroughs that can teach you the information needed to achieve your own success. 

Follow this retargeting setup on your own stores and let us know in the comment section below with your results and thoughts. If you have any questions about retargeting ads, feel free to leave a comment below or ask us in our Facebook group, which holds over 50,000 members.