When it comes to setting up Performance Max or Shopping campaigns, one of the first considerations is how to structure and segment them effectively. In this comprehensive guide, we will explore seven strategies for segmenting these campaigns, discussing the advantages and disadvantages of each.
The first strategy is to have a single campaign that encompasses all products. This approach is common for small accounts that don’t generate high levels of conversions, as segmentation becomes difficult to justify. It can also be used for medium-sized accounts with high-end products or in service-based industries where CPCs and CPAs are high. The advantage of this strategy is that it allows for a large amount of data to be collected in one campaign, which can be beneficial for optimizing performance. However, the disadvantage is that there is no product differentiation in advertising, resulting in wasted spend on poor-performing products.
The second strategy is to segment the campaigns by best sellers. This approach is ideal for businesses that want to generate the most revenue. By focusing on promoting top-selling products and limiting spending on poor performers, businesses can efficiently scale their conversion numbers and value. The advantage of this strategy is that it provides more control over pushing products that have sold well. However, it may not suit businesses where revenue is largely price-sensitive and promotions are updated regularly.
The third strategy is to segment the campaigns by product attributes such as brand and product category. This is often the easiest way to segment campaigns as this data is readily available. It also allows for more streamlined integration with campaign assets based on product attributes. The advantage of this strategy is that it makes it easier to manage large product catalogs. However, grouping data based on attributes may lead to wasted spend on poor performers and overreliance on best sellers.
The fourth strategy is to segment the campaigns by location. This is often necessary to handle different currencies, languages, landing pages, and feeds. It can also be used to target different regions within the same country to optimize shop visits. The advantage of this strategy is that it allows for more options to accommodate regional differences and tailor the user journey. However, managing multiple regional feeds can be more difficult and may reduce growth opportunities within existing markets.
The fifth strategy is to segment the campaigns by profit. By integrating profit data into campaigns, businesses can align their advertising goals with their actual business goals. This strategy provides a more accurate measure of success than just focusing on revenue growth. However, some businesses may be wary of sharing profit data or may not have the resources to provide the necessary data.
The sixth strategy is to segment the campaigns by user. This can be done by focusing on acquiring new customers to measure incrementality accurately. By targeting campaign CPAs within the lifetime value (LTV) per customer, businesses can efficiently reach their advertising objectives. However, distinguishing new vs. returning users can be difficult, and too much focus on new user acquisition may be detrimental to performance for businesses that rely on returning users for revenue.
The seventh strategy is to segment the campaigns with a product matrix. This approach involves segmenting products based on multiple data points and levels of granularity. By prioritizing products according to marketing and business objectives, businesses can achieve multiple advertising priorities. The advantage of this strategy is that it helps reduce wasted spend and makes the budget work more efficiently across the entire catalog. However, it requires complete client collaboration and may not be suitable for ecommerce retailers with large catalogs and diverse product variation.
In conclusion, when setting up Performance Max or Shopping campaigns, there are several effective strategies for segmenting them. The choice of strategy depends on factors such as the account’s size, conversion volume, and overall business objectives. It is important to have transparent communication between the client and account manager to ensure that the chosen strategy aligns closely with the business goals. Ultimately, the effectiveness of these strategies relies on the availability of conversion and product data.
