Ad Retargeting tags users who visit your website and show them your ads on other websites as they browse the internet. This is a great way to re-target visitors who have already been to your website. This is extremely effective when it come to e-commerce, as only about 2% of the visitors convert on the first visit to an online store. Re-targeting gives you a way to reach out to the other 98% of visitors who left your website.
How does it work?
When a user visits your website, a cookie is written in their browser which tags them. Now when this user visits another website, the ad network on that website checks for the re-targeting cookie, if they find this cookie, the network know which websites the user has visited. They can then choose to show ads based on this information. This is known as re-targeting.
The popular re-targeting solution is Google Adwords. This is the best one as most people anyways use this to advertise, so adding the re-targeting option requires you to make some updates in your campaign.