How does retargeting work on Facebook?

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The Meta Ads platform has several technical features that allow advertisers to retarget users who have already interacted with a brand as well as existing customers within a retargeting campaign.

Ad Interaction: Meta can track 100% of all interactions that take place on Facebook or Instagram. Since this is first-party data, this data is not affected by the iOS 14 update . Based on these actions, you can create audiences for switzerland phone number data retargeting—for example, "3 Second Video Viewer" or XYZ.
Interaction with the website, product page, or app: Using the Facebook Pixel or the Conversions API (CAPI), you can track user actions on external platforms, such as your website, and send them back to Facebook. Based on these actions, you can then create audiences to target with a retargeting campaign—for example, "visited product page" or "added to cart."
Existing customer list: You can also upload customer lists from your backend to Facebook and target them when running Facebook ads . Examples of lists could be your customers from your shop system ( Shopify , WooCommerce , Shopware , etc.) or your CRM system (e.g., Klaviyo , Mailchimp , or Sendinblue ). It's important, of course, that you comply with data protection regulations and have obtained the appropriate consent from all users you upload to Meta. Therefore, use a cookie consent banner and note your data usage for marketing purposes in your privacy policy.
Costs & budget for retargeting on Facebook
The cost of retargeting on Facebook depends on various factors, such as competition, target audience, country, and ad quality. Since Facebook allocates its ad space through a bidding process, you pay per impression. This is also referred to as CPM (cost per 1,000 impressions). You can read more about how Facebook Ads costs are calculated here.

CPM costs are high when competition is fierce, the target audience is small, the country has high purchasing power, or the ad is of poor quality (low engagement). Accordingly, costs are lower when these factors are reversed. Of course, CPC is highly dependent on CPM, but this can be significantly reduced with performance-optimized ads .

Generally speaking, you should allocate about 10-20% of your Facebook ad budget to retargeting. The cost aspect of CPM and CPC is then a question of budget efficiency—in other words, how many impressions and clicks will I receive with the set budget, and how can I optimize my ads to reduce costs ?