Acquisition Overview

Byron Marr:

Paid media offers the best opportunity to drive new customer acquisition for your e-commerce business. We can capture users who are actively searching for products you offer and bring them to your Shopify store to drive sales and revenue. We can also drive demand using channels such as Meta ads.

Google Ads - Demand capture

Google Ads is unmatched as a demand capture channel. All around the world, every day, users are actively searching for the products that you sell. This offers us the opportunity to present highly relevant ads right when somebody is looking to buy. You can bring them through to your website where conversion rates and performance are often excellent.

When it comes to growth, it's important that we saturate the budget and spend here first before moving to other channels to ensure that we're not leaving low-hanging fruit opportunities on the table. If we can maximise search and do the groundwork here before we start to go into paid social to drive further demand, we know that we have that bottom of funnel part ticked off.

Acquisition Framework to Implement

There are various different frameworks to implement within this channel. The most important are:

Search Ads: These use keywords to show text-based ads to people who are looking for the products that you sell. These ads perform well and are very pragmatic. The type of copy that works really well here (because the person's already actively looking for your products) focuses on your unique selling points versus competitors and the feature benefits that would encourage that person to click through to your website instead of somebody else's. This is a foundational part of any paid media strategy.

Shopping Ads/Performance Max: These work incredibly well for e-commerce. We've all seen and interacted with these types of ads where we search for a particular product on Google and are shown highly relevant product ads with visuals of the product, the price, store ratings, return period, and shipping options. When a user has seen that information and clicked through to the website, they're highly qualified to buy from our business.

Two things to bear in mind with your acquisition framework:

Segment Brand and Non-Brand: If somebody's actively searching for your brand, we're happy to show ads as it stops competitors taking that space. However, we want to mitigate overpaying for those clicks as the user has often been touched by another marketing channel. The ROAS and conversion rates will look very high. We don't want that data muddied with our generic or non-brand searches (product terms). It can mask underperformance on the broader, higher volume product terms or can be cannibalising the budget which could be going there.

Not having brand segmented means it’s highly likely that the bidding strategy will push budget to the higher converting brand terms in the campaign (to hit your ROAS target) which then pulls spend away from the larger growth opportunities that we want.

Focus on Non-Brand Growth: There's more volume on generic product terms where someone is in market for the product but hasn't found their preferred provider. 

That's where real P&L impact and commercial growth comes from. If we can capture those users at a profitable target return and scale spend, we'll drive real business growth.

If you aren’t seeing a viable return on these terms, it’s time to get into conversion rate optimisation (CRO). Add Microsoft Clarity to your store (it’s free) and watch actual user screen recordings from the campaign to see what the user is experiencing. If there aren’t enough trust signals, unique selling points or social proof then you have the chances to see the uplift that will get you on target and growing on these key opportunities.

Metrics to Optimise Around

The key metrics to optimise around in this channel are commercial metrics, as these are what bidding strategies use to decide who to bid for in the auction:

• Sales
• Revenue
• Cost
• ROAS (Return on Ad Spend)
• Cost per acquisition

ROAS on its own is not a benchmark of success. There's content online suggesting a 4:1 ROAS is good, but it may not be for your business. You need to consider your average order value (AOV) and gross margin percentage to ensure you're making a profit on the sale, not just driving revenue without actual profit.

As the old saying goes “Revenue is for vanity, profit is for sanity, cash is king”.

The trade-off is that sometimes, if your ROAS targets are too high or cost per acquisition targets too low, you're not accounting for other factors like additional revenues from retention marketing. Every customer we drive will likely join your email list, referral campaigns, etc. When you blend that into your spend and return your actual return could be 20-30% higher than the direct sale alone. This lifetime value and recursive revenue (for subscription services) is latent though - we won't see it when we first pay for the user, it will need 3, 6, 12 months to come into the business. 

In summary, we need to balance wanting high profit per sale in ads without undermining long-term growth. With automated bidding in Google Ads, higher ROAS targets mean fewer auctions you'll enter, as the system will opt out when it can't meet your target. Less auctions means less clicks and sales which affects our ability to take market share and scale. We don't want a ROAS target that's too low (no profit per sale), but we must consider the factors mentioned like latent revenue from retention marketing.

How Retention Marketing can Support Google Campaigns

Adam Kitchen:

Byron is absolutely correct, when he says that ROAS alone may lead you to pursue the wrong strategy that doesn’t take into account Lifetime Value (LTV) or revenue driven from retention channels such as email & SMS.

I have worked with dozens of brands that had a great ROAS, stable CAC, but awful Lifetime Value. By looking at cohort data, we have been able to help them significantly pivot their acquisition strategies to be more focused on high-yielding LTV products or assortments. Yes, ROAS may decrease, but the long-term benefit is a more profitable and sustainable business.

One of the easiest ways to see this impact and work in harmony with acquisition teams is to study LTV drivers in Shopify-native apps like Lifetimely:

In order to support profitable marketing practices, we can feed these insights back to the paid media team and use this data to inform cross-sell campaigns and even suggest bundling through retention channels.

Also critical to note, as it pertains to Google channels (what Byron coins “demand capture”), we generally see over 80% of people who subscribe via email convert within the first 24 hours! So if you’re running a traditional Welcome Sequence targeting these people that is drip-fed over a period of 10 days, your chance to convert them will drop dramatically with each passing hour.

The solution? Aggressively go after new subscribers in the first 24 hours because after this, your chances to convert them will fall off a cliff.

Meta Ads - Demand Generation

Byron: 

Meta is unmatched as a demand generation channel. It has the most powerful algorithm to find people interested in your products who may not have searched for them yet. We can tap into users' browsing history (via Meta Pixel) to see that they're looking at similar products. With the right campaign structure and creative, we can engage users who haven't visited your business or searched yet, but are researching products you offer.

Acquisition Framework to Implement

For Meta to work effectively, you need:

Broad Campaign Targeting: Implement a broad top-of-funnel campaign that excludes website visitors, previous customers, and anyone who's interacted with your Facebook page or Instagram account. This ensures you're truly spending on new users who haven't interacted with your brand. Optimise for click-based attribution so you’re finding users who haven’t seen you before, they see an ad, actually click and then come through to make a purchase. 

Clean Segmentation: There's nothing wrong with advertising to website visitors and previous customers, but keep this activity segmented in a different campaign. This lets you control the budget and spend appropriately.

Not having this segmentation in place leads to ‘top-of-funnel’ campaigns seeing inflated, unrealistic performance, prompting you to spend more without any actual impact on store sales. This happens because you're getting view-through conversions from people who already visited your website and a high percentage were going to purchase anyway.

If we can get the top-of-funnel campaign targeting new users on click-based attribution to target return, you'll really feel it in your store sales. As you increase your budget, you'll see it in sales and feel it in your P&L.

Strong Creative: This is crucial for Meta's success and feeds signals to the algorithm to find the right person. User-generated style videos are consistently high performers. Start by showing pain points or aspirations to scrolling users. Show clearly what your features/benefits are and how they solve user problems, ending with a strong call to action. This pre-qualifies clicks, reducing bounce rates and improves returns. The more conversion data we feed back into the algorithm, the faster it will learn and the better commercial performance you will see.

Custom Landing Pages: Because we're interrupting someone's experience (unlike search where they're actively looking), we need pages with more trust signals. Showcase why to choose you over competitors. Higher landing page conversion rates feed more signals back to Meta quickly, helping it bid for more of the right users. This is how you get to the target return and can scale this channel.

Metrics to Optimise Around

The metrics are similar to Google Ads:

• Spend
• Revenue
• Return on Ad Spend
• Cost per Acquisition
• Conversion Rate

Again, the ROAS target needs to be modelled across your average order value with consideration for gross margin to ensure sale-to-sale profitability. We don't want too high a ROAS expectation because sales generated from Meta are likely to enter your email list and be reached by Klaviyo campaigns, referrals, etc.

How Retention Marketing can Support META Campaigns

Adam Kitchen:

Byron raises a key point about how META’s algorithm searches for buyers who may not necessarily be “in market”, but are still interested in your brand and products.

What’s critical to consider here, as it pertains to retention marketing, is application of the 95:5 rule, studied extensively by the Ehrenberg-Bass Institute. That is, that 95% of people may not be “in the market” for your specific goods or services, but they are still within your ideal customer profile (ICP) or target buyer persona.

How does this impact our retention strategy? Well, just as Google Ads tend to pull users in with high intent, META may be collecting subscribers who are not active in the market right now, but may be in the future. Thus, our targeting needs to be expanded for these customers to consider longer timeframes, and not to discard of them so frivolously if they don’t convert.

There is significant value in having a large list, even if a significant majority of these subscribers have not yet converted. I documented how to adopt this principle to your email marketing efforts in this video.

You will also see, when running post-purchase surveys, that many of your customers were aware of your brand for weeks, often months (and sometimes even years!) before making a purchase.

We like to believe in the naive notion of a “marketing funnel” sometimes, as though we can specifically guide users through various sequences in the customer journey through tactful nudges, and various pieces of content at different stages in order to influence their decision making.

The reality is that marketing touch-points are often random, sporadic, and fleeting. There’s a huge amount of value and scientific evidence that suggests simply staying top-of-mind with value-based content is the way to convert buyers, and this is something that needs to be incorporated into your retention efforts. Sometimes, it’s not the offer that’s holding somebody back from making the purchase - it’s the timing.

Follow Byron Marr on LinkedIn here