Finding the right balance between prospecting and retargeting is one of the most reliable ways to improve paid campaign performance. While prospecting brings in new audiences and keeps the top of the funnel full, retargeting converts warm users who already showed intent. Allocating budget effectively between these two stages determines whether your campaigns grow steadily or stall.
Why the Ratio Matters
Prospecting typically accounts for most of your reach. According to industry data, around 70–80% of total conversions originate from users initially reached through prospecting campaigns, even if the actual conversion happens later through retargeting. At the same time, retargeting visitors can convert 2–5x better than cold traffic.
This means both parts of the funnel need funding: prospecting for scale, retargeting for efficiency.
Standard Prospecting vs Retargeting Ratios
Across small and mid-sized advertisers, common spend distributions look like:
-
70/30 (70% prospecting, 30% retargeting) for balanced growth
-
80/20 for fast scaling
-
60/40 for aggressive efficiency
For most brands, the recommended starting point is 70/30. This keeps your pipeline full while ensuring you recapture high‑intent users.
How to Adjust the Ratio Based on Funnel Size
Your audience pool size has a direct impact on the ideal distribution.
If you have small retargeting pools
Example: fewer than 10,000 monthly website visitors
-
Retargeting saturation happens quickly
-
Prospecting should grow your top of funnel
-
Suggested ratio: 80/20
If you have medium retargeting pools
Example: 10,000–50,000 monthly visitors
-
Enough scale for multi-layer retargeting
-
Suggested ratio: 70/30
If you have large retargeting pools
Example: 50,000+ monthly visitors
-
You can run deeper segmentation and creative tiers
-
Suggested ratio: 60/40, with room for 50/50 during sales periods
Performance Data: What Benchmarks Show
Industry performance studies highlight clear behavior differences between cold and warm audiences:
-
Retargeting CPMs may run 15–40% higher, but cost per acquisition is often 40–60% lower.
-
Retargeting click-through rates average 3–5%, compared to 0.8–1.2% for prospecting.
-
When brands shift from 80/20 to 70/30 allocations, they often observe 10–18% increases in total conversions with only marginal CPA changes.
These numbers reinforce why the top of the funnel must remain well-funded, even if retargeting metrics look superior on paper.
Seasonal Ratio Adjustments
Seasonal peaks shift the balance.
-
Q4 and sale periods: retargeting grows more valuable as user intent spikes. Brands often move toward 60/40.
-
Quiet seasons: prospecting should dominate to maintain pipeline flow.
What to Do If Results Plateau
If conversions stagnate, consider the following:
-
Increase prospecting: Grow the funnel if retargeting pools shrink or repeat CPM spikes are visible.
-
Refresh retargeting tiers: Segment by recency (1–3 days, 4–7 days, 8–30 days) instead of using broad audiences.
-
Test lookalike layers: Add modeled audiences to strengthen prospecting quality.
-
Monitor frequency: Retargeting frequency above 10–12 per week often indicates wasted spend.
Ideal Ratio Summary Table
