.png)
Estd 4.22.2023
In today's competitive digital landscape, SaaS executives are constantly seeking ways to optimize their marketing spend. While acquiring new customers is essential, reconnecting with potential customers who have already shown interest often yields higher ROI. This is where retargeting comes into play—a sophisticated marketing strategy that deserves careful measurement and analysis.
What is Retargeting Performance?
Retargeting performance refers to the effectiveness and efficiency of your campaigns that focus on re-engaging users who have previously interacted with your brand but haven't converted. These interactions could include visiting your website, adding items to a cart, downloading content, or any other meaningful engagement without completing your desired conversion action.
Technically, retargeting works by placing cookies on visitors' browsers when they visit your site. These cookies then trigger your ads to appear when these same users browse other websites, social media platforms, or search engines—keeping your SaaS solution top-of-mind during their decision-making process.
Why Retargeting Performance Matters for SaaS Executives
1. Higher Conversion Rates at Lower Costs
According to research by AdRoll, retargeting can increase conversion rates by up to 150%, with clickthrough rates (CTR) that are 10 times higher than standard display ads. For SaaS companies with lengthy sales cycles, this efficiency is particularly valuable.
2. Reduced Customer Acquisition Costs (CAC)
Retargeting campaigns typically cost 25-50% less than campaigns targeting new prospects, according to Digital Marketing Institute. In the SaaS industry, where CAC is a critical metric that directly impacts profitability, this reduction is significant.
3. Enhanced Customer Lifetime Value
Effective retargeting doesn't just help with initial conversions—it can strengthen the entire customer journey. According to Invesp, existing customers are 50% more likely to try new products and spend 31% more compared to new customers. By nurturing relationships through strategic retargeting, you're building foundations for longer, more profitable customer relationships.
4. Competitive Advantage
In the crowded SaaS marketplace, staying visible throughout the buyer's journey provides a critical competitive edge. According to a study by Salesforce, it takes 6-8 touchpoints to generate a viable sales lead. Retargeting ensures your solution remains in consideration even as prospects research alternatives.
Essential Metrics to Measure Retargeting Performance
Conversion Rate
This fundamental metric tracks the percentage of retargeted users who complete your desired action. For SaaS companies, conversions might include:
- Free trial sign-ups
- Demo requests
- Subscription purchases
- Feature upgrades
How to measure: Total conversions ÷ Total retargeting impressions × 100
Benchmark: According to WordStream, the average conversion rate for display retargeting across industries is 0.7%, but SaaS companies often achieve 3-5% with well-optimized campaigns.
Cost Per Acquisition (CPA)
This metric measures how much you're spending to acquire each customer through retargeting efforts.
How to measure: Total retargeting campaign spend ÷ Number of conversions
Benchmark: While this varies significantly by SaaS category and price point, you should aim for a CPA that's 30-50% lower than your standard acquisition campaigns.
Return on Ad Spend (ROAS)
ROAS shows the revenue generated for every dollar spent on retargeting.
How to measure: Revenue from retargeting conversions ÷ Retargeting campaign spend
Benchmark: According to Criteo, well-executed retargeting campaigns achieve ROAS of 4:1 to 10:1, meaning $4-$10 in revenue for every $1 spent.
View-Through Conversions
This metric captures conversions that happen after users view your retargeting ad but don't immediately click on it.
How to measure: Most ad platforms track this automatically within a specified attribution window (typically 28 days).
Benchmark: According to Google, view-through conversions can account for 50-90% of total retargeting conversions for B2B SaaS solutions with complex buying processes.
Frequency
This measures how often the same user sees your retargeting ads.
How to measure: Total impressions ÷ Unique users reached
Best practice: While there's no universal optimal frequency, research from AdRoll suggests limiting frequency to 17-20 impressions per user per month to prevent ad fatigue.
Time to Conversion
This metric tracks how long it takes users to convert after first being retargeted.
How to measure: Date of conversion − Date first retargeting impression was served
Insight value: This helps understand your sales cycle and optimize campaign duration. For enterprise SaaS, longer windows may be appropriate, while shorter windows work better for lower-commitment offerings.
Advanced Retargeting Performance Measurement Strategies
Segment Analysis
Break down your retargeting performance by:
- User behavior (visitors to specific product pages vs. blog readers)
- Time since last visit (1 day, 7 days, 30+ days)
- Device type (desktop vs. mobile)
- Traffic source origin
Why it matters: According to a study by Salesforce, segmented retargeting campaigns deliver 3x higher engagement rates than generic retargeting.
Incremental Lift Testing
Rather than assuming all conversions from retargeting would have been lost otherwise, use controlled tests to measure true incremental impact.
How to implement: Create a holdout or control group that doesn't receive retargeting, then measure the difference in conversion rates between this group and your retargeted audience.
Why it matters: According to research from Harvard Business Review, only 60% of conversions attributed to retargeting are truly incremental—the others would have happened anyway.
Multi-touch Attribution
Recognize that retargeting is part of a larger marketing ecosystem by implementing more sophisticated attribution models.
Options include:
- Position-based attribution (giving more credit to first and last touchpoints)
- Time-decay attribution (giving more credit to touchpoints closer to conversion)
- Data-driven attribution (using algorithms to determine touchpoint value)
Implementation tool example: Google Analytics 4 offers advanced attribution modeling that can help understand retargeting's contribution within your broader marketing mix.
Common Retargeting Performance Pitfalls to Avoid
1. Ignoring Burn Rate
Monitor how quickly you're exhausting your retargeting audience. If you're burning through your audience faster than you're adding new prospects to the top of the funnel, your retargeting performance will inevitably decline.
2. Neglecting Creative Fatigue
According to research by AdEspresso, ad performance can drop by up to 50% after the same creative has been shown for more than two weeks. Implement a regular creative refresh schedule to maintain engagement.
3. Poor Audience Segmentation
Failing to segment your audience based on their behavior and intent leads to irrelevant messaging. According to Epsilon, segmented, targeted campaigns outperform non-segmented campaigns by 101% in conversion rates.
4. Overlooking Cross-Device Behavior
B2B SaaS buyers often research on mobile but convert on desktop. According to Google, 65% of revenue comes from purchases that involved multiple devices. Ensure your measurement accounts for cross-device journeys.
Conclusion: The Retargeting Performance Imperative
For SaaS executives, mastering retargeting performance isn't just about tactical marketing gains—it's about fundamentally improving unit economics across the business. When properly measured and optimized, retargeting can:
- Reduce overall CAC by re-engaging high-intent prospects
- Shorten sales cycles through timely, relevant messaging
- Increase conversion rates at critical funnel stages
- Improve retention by continuing engagement post-purchase
The most successful SaaS companies don't view retargeting as a separate channel but rather as an integral part of their comprehensive customer acquisition and retention strategy. By implementing rigorous measurement frameworks and continuously optimizing based on data, you can transform retargeting from a basic remarketing tactic into a powerful engine for sustained growth.
To maximize your retargeting performance, start by establishing clear baseline metrics, implement the measurement approaches outlined above, and commit to regular performance reviews that lead to actionable optimizations.