Email vs ads for customer retention: where should the budget go?
Short answer
Email should carry the retention workload. Ads re-engage the segment that stopped opening emails. Most stores should spend 80% of retention effort on email.
Why email wins on cost
The marginal cost of an email is near zero. The marginal cost of a retargeting impression is not. For customers who still open, email is the obvious channel.
Where ads fill the gap
About 30% of your list stops opening after six months. They are not lost — they just moved to a channel where you are not. A retargeting ad on Meta or Google costs more per touch but reaches people email cannot.
The practical split
Run email for everyone. Layer ads on top for the segment that went dark. Review quarterly.