How to Measure Retargeting Ad ROI

Want to make your retargeting campaigns more profitable? Start by measuring ROI accurately.

Retargeting ads target users who’ve already shown interest in your brand, making them a powerful tool for boosting conversions. But without proper ROI tracking, up to 70% of ad spend can be wasted. Here's what you need to know:

• Key Metrics: Focus on costs (ad spend, creative, management), conversion rates, and revenue (direct and indirect).

• ROI Formula: Use this simple calculation:
  ROI = ((Revenue - Total Cost) / Total Cost) × 100

• Tools to Use: Analytics platforms with cross-device tracking, attribution modeling, and revenue tracking.

• Steps to Improve ROI:

  • Target high-intent buyers using real-time data.

  • Optimize ad frequency to avoid fatigue.

  • Focus on segments with the best performance.

3 Deadly Facebook Ads Retargeting Mistakes Killing Your ROI

Core Metrics for Retargeting ROI

To gauge the success of your retargeting campaigns, it's essential to monitor specific metrics that reveal their impact. Below are the key areas to focus on when evaluating performance.

Campaign Costs

Keep a close eye on these cost components to understand your total investment:

• Ad spend: Direct costs paid to platforms

• Creative production: Expenses for ad design and content creation

• Management fees: Costs for managing campaigns

• Technology fees: Charges for tools or software

• Additional platform costs: Any other fees tied to ad platforms

Sales and Revenue

Accurate revenue tracking is vital for connecting sales to your retargeting efforts. Here's how to break it down:

• Direct Revenue: Use attribution models like first-touch, last-touch, or multi-touch to assign sales directly to your campaigns.

• Indirect Revenue: Factor in the value from view-through conversions, brand lift, and repeat purchases.

"Before we were getting $6-$9 per click, with a 20% avg conversion… with this, CPC at $1.03 and 50% conversion, 3x the number of total clicks." - Rob T, Digital Marketing Specialist

Performance Indicators

Beyond revenue, these metrics help paint a clearer picture of your campaign's effectiveness:

These metrics are essential for calculating your campaign's ROI and identifying areas for improvement.

One success story highlights the potential of retargeting:

"We created a lookalike based on the data. We got 27 sales of approx $10k over the weekend. CPA drop by 40%." - Peter L, Agency Owner

3 Steps to Calculate Retargeting ROI

1. Collect Campaign Data

Start by gathering the key data from your retargeting platforms. Focus on these metrics:

• Total ad spend: Include all expenses, as outlined earlier.

• Conversion data: Track both direct and view-through conversions.

• Revenue generated: Measure the sales attributed to retargeting interactions.

• Time period: Use a consistent timeframe, like monthly or quarterly, for accurate comparisons.

You can streamline this process by using tools like 24/7 Intent's real-time tracking to automatically consolidate your data. Once you have everything in place, you’re ready to calculate ROI.

2. Use the ROI Formula

The ROI formula is straightforward:

ROI = ((Revenue - Total Cost) / Total Cost) × 100

Here’s an example: Let’s say your campaign for the month:

• Brought in $50,000 in revenue.

• Had $15,000 in total expenses.

Using the formula:
ROI = (($50,000 - $15,000) / $15,000) × 100 = 233.33%

This means every dollar spent generated $2.33 in profit after covering costs.

3. Review Performance by Segment

Dig deeper by analyzing ROI across different segments. This helps you identify what’s working best and where to refine your strategy. Here’s a breakdown:

Don’t forget to consider factors like customer lifetime value, seasonal trends, cross-device attribution, and time delays in conversions. These can provide additional insights to fine-tune your campaigns further.

ROI Tracking Tools and Methods

Data and Analytics Tools

Tracking ROI effectively requires reliable analytics that can link conversions and revenue directly to your retargeting campaigns. Here are some key features to look for:

• Cross-device tracking: Follow user interactions across devices.

• Attribution modeling: Pinpoint which touchpoints lead to conversions.

• Revenue tracking: Tie ad interactions directly to sales.

• Custom event tracking: Track specific user actions relevant to your goals.

By integrating ad platform data with your CRM and sales data, you can build a clear picture of performance. This complete view is crucial for accurate ROI calculations and forms the foundation of platforms like 24/7 Intent.

24/7 Intent Platform Features

The 24/7 Intent platform processes more than 100 billion buying signals daily, updating over 270 million consumer profiles to deliver precise targeting.

Here’s how its features help with ROI tracking:

These tools allow marketers to fine-tune their retargeting strategies for maximum efficiency.

"Our CPL on average is less than $80. Since we updated the campaigns with the intent data, it has dropped to the best we've ever seen." - David Jaeger, Owner

Testing Methods

The final step in validating ROI is systematic testing.

A/B Testing Protocol:

• Run side-by-side tests comparing intent-based campaigns with standard ones for two weeks.

• Measure metrics like conversion rates and CPA.

• Use control groups to isolate the impact of retargeting.

Keep test conditions consistent and evaluate multiple metrics, including cost per acquisition, conversion rates, lead quality, customer lifetime value, and return on ad spend. This approach ensures a well-rounded understanding of your campaign’s effectiveness.

Ways to Increase Retargeting ROI

Smarter Audience Targeting

Using real-time intent data can significantly boost conversions - by as much as 2-3x - while also cutting customer acquisition costs by 30-45%. The secret? Focus on identifying and targeting high-intent buyers before your competition does. By analyzing buying signals and building tailored audiences, you can zero in on prospects who are most likely to convert.

Take Bill Luke, an automotive company, as an example. They generated 1,608 leads in just three days using intent data. These leads came with detailed information like credit scores, vehicle mileage, car make, and in-market behavior.

Fine-tuning your audience selection sets the stage for better overall campaign performance, including ad creative effectiveness.

Improving Ad Content

Instead of constantly tweaking ad creative, targeting the right audience at the right time can deliver better results. Real-time intent data enables businesses to achieve impressive outcomes without needing to overhaul their ad content.

Here’s a case in point from a Digital Marketing Specialist:

"We have been hitting the same market for 3 years now and VSL opt-in costs usually $10-$25. We uploaded the Intent Data and within 24hrs it dropped by 50%."
– Bobby, Digital Marketing Specialist

This success was driven by better targeting rather than creative changes. The results speak for themselves:

Pairing these results with accurate tracking and segmentation strategies can further amplify your retargeting ROI.

Managing Ad Frequency

Once your audience and ad content are optimized, managing ad frequency becomes essential for maintaining engagement and ROI. With real-time intent data that updates every six hours, you can:

• Reach prospects when they’re most likely to engage

• Adjust ad frequency to match their position in the buyer’s journey

• Avoid ad fatigue by timing impressions more effectively

• Reduce wasted impressions on less-qualified prospects

This method has proven successful for financial advisors, who saw better campaign performance through improved engagement and higher conversion rates. The key is finding the right balance - ensuring your ads appear at the most impactful moments without overwhelming your audience.

Conclusion: Keys to Better Retargeting ROI

Improving your retargeting ROI doesn't have to be complicated. Using 24/7 Intent's real-time data can lead to impressive results, like doubling or tripling conversion rates while cutting customer acquisition costs by 30-45%.

Consistent measurement and smart adjustments are essential for better campaign outcomes. Here are three core elements that drive success in retargeting:

• Up-to-Date Data: Refreshing intent data every six hours ensures you target prospects at the perfect stage of their buying journey.

• Accurate Targeting: By analyzing over 100 billion buying signals daily and maintaining updates on 270 million consumer profiles, businesses can connect with high-intent buyers before competitors do.

• Ongoing Adjustments: Regularly fine-tuning campaigns based on performance data can reduce wasted ad spend by up to 70%.

These strategies summarize the tools and techniques covered in this guide. By applying them, businesses can consistently boost their retargeting performance and see better returns.

Ready to take the next step? Use 24/7 Intent's platform to refine your retargeting efforts and achieve measurable improvements. Put these principles into action to enhance your strategy and maximize your ROI.

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