Segments Use cases
Magelon Feeds offers great flexibility in terms of the strategies one can follow. Unlike other solutions that provide a fixed model, with Magelon Feeds you have the ability to adjust according to each client’s needs. This gives the freedom to test different approaches and choose the most efficient one.
Since it can feel overwhelming at first, here are some examples and guidelines on how you can use segments to divide products into different campaigns based on their performance. This allows you to increase spending on products with the highest profitability and reduce the budget for those that aren’t generating enough sales.
Potential Campaigns
• Top Performers: Select about 10% of the products with the best sales history. This percentage depends on the client’s number of products and the available data from Google Analytics.
• Worst Spenders: This campaign includes products that have many clicks but no sales or very low sales performance. You can allocate a minimal budget for this campaign or exclude these products entirely, opting not to promote them at all. Ideally, this category should not exceed 20% of the products, with a target of 5-10%.
• Normal Performers: These are products that do not fall into the Top Performers or Worst Spenders categories. They perform moderately, with lower performance than the Top Performers but better than Worst Spenders.
• Zero Clicks: Often, a large portion of products is not shown at all. This campaign aims to showcase products that may perform well but haven’t had the opportunity yet. You can choose products with 0 clicks or a minimal amount, e.g., 1 or 2 clicks in the last 30 days. The higher this threshold, the larger the campaign budget should be.
*Campaign Budgets: At the start, it’s helpful to allocate the same budget to both Top Performers and Normal Performers campaigns. The budget can be adjusted later based on performance. Worst Spenders should have a minimal or no budget. The Zero Clicks campaign needs a small budget (e.g., €5/day) because once some products start receiving clicks, they will move to the Normal Performers campaign.
For the campaigns with the highest budget, you can add a rule for segmentation based on price. Essentially, you can monitor performance within each price range and exclude product groups with poor performance. In some cases, it may be beneficial to exclude very expensive products from the start, such as those over €2000 or €3000.
Campaign Metrics
For all the above campaigns, the segmentation is based on the following metrics from Google Analytics 4:
- Quantity
- Revenue
- Cart to View Ratio
- Added to Cart
- Purchase to View Ratio
- Viewed
From the Merchant Center, we can use these metrics:
- Clicks
- Impressions
- CTR
These metrics can be used with different time durations. We don’t need to check all metrics for the same time period (e.g., last 14 days), but instead, we can use different timeframes for each metric. The available timeframes are:
- Last 7 days
- Last 14 days
- Last 30 days
- Last 60 days
- Last 90 days
For the four mentioned campaigns, it’s essential to experiment to determine which combination of metrics and timeframes works best. This will largely depend on the data available from Google Analytics 4. For instance, in the Top Performers campaign, we could use not only sales numbers but also other metrics, such as Cart to View Ratio or Purchase to View Ratio. We can also add filters based on other fields available in the feed, such as excluding specific brands or categories, or narrowing down price ranges.
Alternative Strategies
A simple approach could be to create only one segment for Top Performers and then create two campaigns: one for Top Performers and one for all other products.
Another option is to split Top and Normal Performers into three campaigns. However, this increases management complexity and requires more budget to ensure a minimum number of conversions for smart bidding to work correctly.
Adding Cost or Profit Margin
If a client can include the cost or profit margin in the feed, it would greatly improve ad efficiency. You could filter products based on higher profit margins, promoting those with better profit potential. Since this may be sensitive information, clients who don’t want to share exact margins can use custom labels to indicate high/low or high/mid/low margins, allowing you to use them in filters.