The Importance of Retargeting | RedPandas Digital
The Importance of Retargeting

The Importance of Retargeting

“If my customers are already coming back on their own, why should I spend money retargeting them?” It’s a fair question, and one that many business owners and marketers wrestle with. But did you know retargeted visitors convert 70% more than cold traffic?

“If my customers are already coming back on their own, why should I spend money retargeting them?” It’s a fair question, and one that many business owners and marketers wrestle with. But did you know retargeted visitors convert 70% more than cold traffic?

quote about retargeting

But retargeting might seem like an easy expense to cut, especially when your loyal customers are already making repeat purchases without any extra nudging. Wouldn’t that money be better spent finding new customers?

On the surface, it makes sense. 

But here’s the truth: retargeting isn’t just about bringing people back. It’s about maximising the potential of every customer interaction. 

When done right, retargeting can uncover opportunities you might not even realise you’re missing—like cross-selling other services, upselling premium offerings, or simply staying top-of-mind in an increasingly crowded market.

In this article, you’ll learn:

  • The hidden benefits of retargeting that go beyond driving repeat visits
  • How to strike the right balance between retargeting and acquiring new customers
  • Practical strategies for using retargeting to grow your business without wasting a dollar

If you’ve ever wondered whether retargeting is truly worth it—or how to approach it strategically—this is the guide for you. 


What is Retargeting Really For?

meme about retargeting

When most people think about retargeting, they picture ads that follow them around online, trying to coax them back to a website they visited once. And while that’s part of it, retargeting is so much more than just a digital nudge.

At its core, retargeting is about reconnecting with people who already know your business—whether they’ve visited your website, engaged with your social media, or even made a purchase. But the goal isn’t just to bring them back; it’s to deepen the relationship and maximise the value of every interaction.

Here’s what retargeting can really do for your business:

1. Cross-Selling Other Products or Services

Your customers may love what they’ve already bought from you, but they might not be aware of other solutions you offer. Retargeting lets you showcase complementary products or services in a way that feels timely and relevant.

Example: A gym member who signed up for a membership sees a retargeting ad for personal training sessions or nutrition plans—services that enhance their initial purchase.

2. Upselling to Premium Options

meme about upselling

Retargeting can also help you introduce customers to higher-value offerings. People who have already bought from you are more likely to trust you and consider upgrading.

Example: A customer who bought an entry-level software subscription sees an ad for your premium plan, highlighting the advanced features they’re now ready for.

3. Reinforcing Brand Loyalty

Even if customers return to your business naturally, retargeting can help you stay top-of-mind. By reminding them of the value you bring, you strengthen their connection to your brand and increase the likelihood they’ll keep choosing you over competitors.

Example: A loyal shopper at an online boutique sees retargeting ads featuring new arrivals or exclusive offers, reinforcing their habit of checking your site first.

4. Recapturing Missed Opportunities

Not every customer will convert on their first interaction. Retargeting helps you re-engage people who showed interest but didn’t follow through, giving them another chance to take action.

Example: Someone who added items to their cart but didn’t complete the purchase sees a reminder ad offering free shipping if they check out now.

Retargeting isn’t just about following up—it’s about creating opportunities to engage, educate, and enhance your relationship with customers. But to make it work, you need to understand its hidden benefits and how to balance it with your broader marketing strategy.

Balancing Cold vs. Retargeting Spend

One of the biggest questions businesses face when it comes to retargeting is how to balance their budget between reaching new audiences (cold traffic) and re-engaging existing ones (retargeting). Both are critical for growth, but the key lies in finding the right split to maximise ROI.

The Purpose of Cold Traffic Campaigns

Cold traffic campaigns target people who haven’t interacted with your brand before. The goal is to introduce your business, build awareness, and start generating conversions. These campaigns are essential for expanding your customer base and driving new growth.

Read: Maximise Your Cold Traffic Campaigns With This 5 Step Audit Checklist

Use the 5-Point Ad Framework to Drastically Increase Leads From Your Paid Ads

Where Cold Traffic Shines:

  • Building brand awareness in untapped markets
  • Capturing potential customers at the top of the funnel
  • Generating a steady flow of new leads to keep your sales pipeline full

Drawback: Cold traffic often requires a larger budget and more time to convert, as these audiences are unfamiliar with your brand.

The Purpose of Retargeting Campaigns

meme about retargeting campaigns

Retargeting focuses on people who have already interacted with your brand, whether they’ve visited your website, engaged with an ad, or made a previous purchase. These campaigns are about reinforcing relationships, converting warm leads, and maximising lifetime value.

Where Retargeting Shines:

  • Converting warm leads who need an extra nudge
  • Upselling and cross-selling to existing customers
  • Improving customer loyalty through consistent engagement

Drawback: Retargeting relies on having a sufficient volume of traffic to retarget, so it can’t be your sole strategy.

How to Split Your Budget Between Cold and Retargeting Campaigns

This is going to depend on your business, goals, and specific scenario. 

A good starting point is to allocate 70% of your budget to cold traffic campaigns and 30% to retargeting

This balance ensures you’re continuously bringing in new leads while nurturing the ones you’ve already captured.

Read: 10 Reasons Your Google Ads Campaign Is Not Converting

10 Reasons Your Google Ads Campaign Is Not Converting

Adjust Based On:

  • Traffic Volume: If you’re not driving enough traffic to support retargeting, increase your cold traffic spend
  • Customer Retention Goals: If repeat purchases or upselling are a priority, shift more budget toward retargeting
  • Campaign Performance: Use data to identify where you’re seeing the best ROI and adjust accordingly

So, Are You Wasting Money With Retargeting? 

At the end of the day, if you’re generating revenue from retargeting, why would you stop?

You might say ‘Oh, but I would have generated that revenue even without it!’ 

However, when you don’t stay top of mind, you may be surprised at how much less revenue you may generate from them in one year. 

According to a study, retargeted customers are 3 times more likely to click on your ad than those who haven’t interacted with your brand before and on top of this, retargeting can increase your customer’s average order value, leading to more revenue per interaction.

In other words, retargeting results in: 

  • Customers coming back more often 
  • Customers spending more each interaction

At first glance, retargeting might seem like an unnecessary expense—especially if you already have returning customers. 

But when you look closer, it’s clear that retargeting is more than just a way to bring people back; it’s a powerful tool for growing customer relationships and maximising revenue.

Next, check out our article on how much Facebook Ads generally cost in Australia so you can make sure you’re getting the best bang for your buck.

How Much Do Facebook Ads Cost in Australia?

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