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Facebook Retargeting Ads – Lower Your Ad Costs and Increase ROI

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by Kyle Handy       Updated October 31, 2020

You might have heard the marketing term “retargeting”, but what does it mean? And how can you put it to use in your business? Learning how to utilize Facebook retargeting ads can maximize the ROI on your advertising dollar and generate more conversions in your real estate business.

And the best part is, it’s so simple to set up that you don’t need to hire anyone to do it for you.

What we’ll cover

  • What Are Facebook Retargeting Ads? 
  • How They Work 
  • Objectives Of Retargeting
  • How to Set Up Your First Retargeting Campaign

What Are Facebook Retargeting Ads?

“Retargeting” and “remarketing” are often used interchangeably, but there is an important distinction to note. While remarketing generally refers to the Google platform, retargeting refers to Facebook and other social media, which is what we will be exploring in this post.

More specifically, retargeting focuses on advertising to people who have already interacted with you in one form or another. Retargeting is highly effective in boosting your conversion ratio by getting your ads in front of the right people.

Facebook retargeting can also lower your advertising costs. Instead of blasting an ad to thousands of people, you can retarget your ad to a list of 50 contacts who have already expressed some form of interest and will be more receptive to your message.

There’s two different types of retargeting:

  • List-based retargeting
  • Pixel-based retargeting

List-based retargeting

List-based retargeting utilizes contact information that you’ve already acquired, perhaps a database you’ve compiled of past clients or leads. 

You can import this information to Facebook as a spreadsheet. Facebook will then match the emails and phone numbers from your list to online profiles and an audience will be created for you.

Pros of List-Based Retargeting
  • It allows you to target the right people
  • Setup is immediate
Cons of List-Based Retargeting
  • Managing constant updates

The fine print with list-based retargeting is that updating your data regularly is very important, especially as you expand your database with new people. These updates might be once a week, once a month, or once a year.

Match Rates

Facebook is pretty effective at matching data from your spreadsheet to a user profile, but not entirely. 

Match rates on a list-based retargeting campaign can vary anywhere from between seventy to eighty percent on the high end, to twenty to thirty percent on the low end. Average results will be right in the middle, around 50 percent.

Low match rates are generally a result of people using a different email or phone number for their Facebook than what they provided you with.

Pixel-based Retargeting

Pixel-based retargeting zeroes in on those who have interacted with any of your online content, such as your Youtube channel, social media, website, or blog.

To use pixel-based retargeting, you would install a piece of code on your website. Then when someone visits your site, a cookie is placed on their computer which tracks their activities, such as which pages they visit and for how long.

Pixel-based retargeting is also unique in that it lets you go back and retarget people who visited your site in the past.

For example, if someone visited your website 90 days ago but you didn’t have an advertising campaign set up at that point, you can still create a campaign and retarget them.

Pros of Pixel-based retargeting
  • It’s simple to set up
  • You can define audience segments you want to target
  • The results are immediate 
  • It is highly customizable
Cons of Pixel-based retargeting
  • It takes more work in the beginning to get set up

Objectives of Facebook Retargeting Ads

There are two main objectives of a retargeting campaign:

  • Brand awareness
  • Conversions

To achieve either of these goals, you need to understand the customer funnel and how your Facebook retargeting ads can help push people through it.

The Customer Funnel

Now that you’ve established your audience, you’ll want to get them to the next step in what is called the “customer funnel”.

The customer funnel has a top, middle, and bottom end.

The top end of the funnel relies on the organic or paid traffic of a cold audience in order to build up your retargeting audience.

This is where you’ll have to do some traditional ad campaigns or paid advertisements to get the ball rolling.

For instance, say you write a blog post about “The Top 10 Things You Need to Know About San Antonio.” You would then create an advertisement to show a thousand people living in San Antonio. This target audience that will see your ad is the top of your customer funnel. 

The middle of the funnel is the collective audience that has engaged with your content and has been added to your retargeting audience.

Say one hundred people click on that blog post. Those people enter into the middle of your funnel, and you can add them to your retargeting campaign.

Note that this does not mean you take your eye off the top of the funnel. You need to maintain a continuous stream of organic traffic so that your retargeting audience is constantly regenerating.

A person would move from the middle of the funnel to the bottom after taking action such as signing up for your e-mail list or filling out a form on your site. 

The bottom of the funnel is the most engaged audience that has shown interest in what you have to offer and has taken a micro-commitment towards working with you.

Once you have a defined bottom of the funnel, you can now serve up advertisements to this audience centered around a buying decision. This buying decision can be setting up a consultation, giving you a phone call, or attending an event. It could be any action that you determine is needed for your business’ success.

How to Set up Your First Retargeting Campaign

You can set up your retargeting campaign in one of two ways.

The first way is to create retargeting audiences straight from your Facebook business page. If you do this, you don’t need to worry about installing a pixel. Facebook automatically tracks the information for you.

Or, you can set up your Facebook retargeting ads for a website or blog. In this case you will need to install a pixel for them in Facebook Business Manager.

Installing a Pixel

First, go to the search bar in the top right corner of the Facebook Business Manager and search for Events Manager. This feature is included if you have a Facebook business page and a working ads account.

Next click “Add new data source” and then “Facebook Pixel”.

Once you’ve created your pixel, you’ll need to set it up on your site.

To do this, click on the pixel and go to the top right corner of the screen. Click “Setup” and then “Install pixel.”

If you know how to install code, click “install code manually.” Or, give the code to whoever manages your website, if applicable.

Once the code is there, you’re done. It will start capturing data automatically.

Creating Your Retargeting Audience

Now that you have your pixel installed, select the actions you want to target and create an audience for. 

Click “Setup”, then select “Setup New Events” to add custom events.

Click on “Use Facebook’s Event Setup Tool”, then input the URL address of the website your pixel is installed on.

This will take you to a separate page that will show you a copy of your website. Here, you can turn any button into a custom event to track for your pixel.

For example, if you want to retarget people who click on a certain link within your site, selecting that link will tell Facebook that you want to set that up as a custom event.

To set up a custom event, go to the upper left-hand corner where Facebook’s tool appears and click “Setup Event”. Then click “Select an Event” and choose what you want the pixel to be about. 

After clicking “Tag your Event”, you will see various boxes highlighted across your site. Select what you want to have trigger your pixel. 

The tool will then confirm that your event has been tagged, and you can now name and save that event to show up as a pixel on Facebook.

When you return to the Facebook Events Manager, it will show you the pixel as a graph, with lines for page views, link clicks, and leads.

Beneath the graph, under “Total Events”, you will see the total number of people that have performed those three actions. 

Then, you can create targeted audience segments on Facebook made up of just these people.

How to Create an Audience Segment

In order to create different audiences based on your pixel, first go up to the search bar in Facebook Events Manager and search for “Audiences.”

Next, click “Create an Audience” and then “Custom Audience.”

A window will appear giving you the option to choose between your own sources and Facebook’s sources.

If you want to create a retargeted audience from the data of your Facebook business page, choose Facebook sources.

To use your own sources you will either need a database for list-based retargeting, or a pixel installed on your website.

Lookalike Audiences

A great way to keep the top of your funnel full and find new people who are likely to respond to your ads is through “Lookalike Audiences”. An entirely new audience is created when you set up a Lookalike Audience, using traits that mimic your current audience. 

After creating your custom audience using the tutorial above, go back to the main “Audiences” page and go up to the upper left corner to “Create Audience,” and then click “Lookalike Audience.”

Begin by selecting one of your existing audiences. Input the country your audience is located in and the size of your audience. 

Choosing a smaller match percentage will get you a more narrow lookalike audience that shares more direct similarities with your original audience. On the other hand, choosing a larger match percentage will yield a larger audience size but will be less similar to your original audience. 

Then hit “Create Audience.”

Your lookalike audience will then show up on the main Audiences page with your other created audiences.

To narrow down your lookalike audience to a specific city, click the “Create Audience” button again and select “Saved Audience”. Select the lookalike audience you created above but now choose your specific state or city as the location target. 

Now you can serve up a new round of Facebook retargeting ads, and expect this audience to respond similarly to your original audience.

Final Thoughts on Facebook Retargeting Ads

Facebook retargeting ads is an invaluable tool when it comes to finding the right audience for your real estate business. Taking the time to learn how to create a retargeting campaign will help you lower your ad costs and increase your conversions in the long run. 

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