The times, they are e-changin’: How re-engagement has become more valuable during COVID-19


User acquisition is an important part of the conversions game, but what they could be missing in their marketing campaigns during the COVID-19 pandemic is the opportunity to retarget users who are more accessible and available now.

30-second summary

  • Users are spending more time on their digital platforms than ever, and ecommerce sales are up 25% as of the end of March
  • Companies are undervaluing retargeting practices; 28% of mobile app marketers said they only used 5% of their budget for re-engagement, yet customers are three times more likely to buy if they’ve already seen an initial ad
  • Re-engagement campaigns on Google can cost as much as 75% less than user acquisition Google Search Engine Results Page (SERP) ads
  • Re-engagement is an excellent opportunity for ecommerce businesses to address potential returning customers to continue driving more conversions or retargeting customers who are close to buying the first time
  • Re-engagement is tricky and must calibrate accordingly to adjust to the user’s habits and times when he/she is accessible, and be carefully adjusted to prevent presenting the same ads to customers who have already bought the product being advertised

“The times, they are a-changin’,” Bob Dylan said decades ago. It’s an expression that couldn’t ring truer for digital marketers during the COVID-19 pandemic.

The global situation could still be weeks or months away from reaching its peak in some countries, relegating many to stay home and interact more digitally with the world than they had in the past. This poses a new opportunity for ecommerce business proprietors to take advantage of.

User acquisition during the COVID-19 era

Users are about to spend more time on their mobile phones in general, a lot more screen time more online shopping, playing, texting or video calling, and social media browsing, and the data as of the end of March reflect it, with ecommerce sales up 25 percent.

Now, ecommerce businesses could find added incentive to improve their digital gameplan, and take advantage of the online boom.

As it stands, user acquisition is the dominant marketing strategy for ecommerce and rightly so. Without new users, of course, a business can’t grow or sustain itself. But re-engagement and retention are often greatly undervalued.

For example, 28 percent of mobile app marketers told Liftoff in 2019 that they designated five percent of their budgets to re-engagement, while a mere five percent designated 95 percent to re-engagement.

With users at home consuming more digital than ever, retargeting ads can become quite lucrative. Already, retargeted users are about three times more likely to click on an ad than users who’ve never interacted with the brand before.

How re-engagement has become more valuable during COVID-19

What is re-engagement exactly?

Re-engagement, or retargeting, is the act of advertising to customers who didn’t finish the conversion process or didn’t buy, and to refamiliarize customers with your brand in order to retain them. But at the very least, these users are familiar with the brand and have taken an initial interest.

A retargeting ad, whether on a social platform, search engine, or elsewhere is delivered to the customer for the specific item that he or she was interested in or maybe just the brand page in general; it depends on what kind of interaction the user had the first time and when.

To reach these kinds of users, the cost is less than acquiring a new user, because it already cost a marketer to acquire the user in the first place, but marketers expect a higher ROI for retargeting because of the likelihood of the user buying increases.

For comparison’s sake, SERP [Search Engine Results Page] Watch estimates that Google SERP PPC (pay per click) ads for ecommerce cost $1.88 on non-mobile devices.

Mobile Google PPC ads cost on average $2.81 for retail, $1.88 for electronics, and $2.68 for home and garden. Other industries might find it cheaper or more expensive depending on the competition.

To retarget users already familiar with a brand, the price drops off significantly. Ecommerce Nation estimates that for a $2-3 Google PPC SERP ad, the retargeting ad can cost as low ast $0.25-0.60 per click.

So, how should companies budget for re-engagement action?

Many ecommerce businesses might spend 5 to 10 percent of their digital advertising budget on retargeting ads, while others might go higher or lower.

It depends entirely on the product and company’s buyer-seller relationship to the consumer, whether it’s frequent interaction or sporadic. At most, the retargeting percentage is likely to land anywhere from 5 to 25 percent of the total budget, except for rare cases where a marketer’s achieved more brand familiarization and mostly needs to retarget the same audience.

For example, a supermarket selling groceries online for delivery might find itself raising the percentage of its budget for retargeting closer to the 25 percent, given the constant needs of the customer.

At the same time, a business selling consumer electronics is far more likely to limit retargeting to small incremental percentiles, maybe even to a few percentage points. But that, too, could very well change depending on how many users are showing interest, statistically-speaking.

More importantly, ecommerce marketers need to be careful about their re-engagement strategy. Sending remarketed ads to the same consumer who has already purchased or sending ads to users too frequently can disenfranchise users with a brand.

A great example that many can relate to is when a user receives ads for hotels in cities in which he or she has already booked one. Poor attention to detail and data reaps irritated customers rather than new ones.

The key with retargeting, especially with a limited budget to begin with, is to carefully calculate place and time an ad is shown to the user.

If a proprietor is selling a TV, for example, retargeting can’t be done in a matter of hours, and it can’t be done in a matter of months either, because, by then, the customer is lost.

To return to the same example of the accommodations industry, or even the airline industry, retargeting a customer within a matter of days or weeks won’t be effective either. The COVID-19 pandemic will not last forever, but the lessons that can be learned may be timeless.

Ecommerce businesses must always adapt to the situation, as user devices, habits, and economic circumstances change, but now is the time to embrace what retargeting or re-engagement can do for staying relevant during the tougher times.



First published on Click Z on May 15th, 2020:

The times, they are e-changin’: How re-engagement has become more valuable during COVID-19


Want to know more?
Contact Us
Contact Us