4 Performance Max Segmentation Strategies and How to Leverage Them

Understanding the pros and cons of Performance Max segmentation strategies can help you determine the best approach for your account. Here’s a guide to making the most of your Performance Max campaigns.

Akhra Amin on June 4, 2024


Introduction

In the world of digital marketing, structuring your Performance Max campaigns effectively is key to achieving optimal results. Having audited numerous PPC accounts, I’ve identified four common segmentation strategies. Below, I’ll break down each strategy, discuss their advantages and disadvantages, and share tips to maximise your campaign performance.

1. Top Performer/High Margin Segmentation

Focusing on top-performing products is a common approach. Advertisers often concentrate their efforts on the products with the highest sales, assuming this will yield the best results.

Pros:

  • Quickly highlights high-performing products.
  • Streamlines budget allocation towards top products.

Cons:

  • The product clicked isn’t always the product purchased.
  • Cross-sell rates can be as high as 70%.
  • Misalignment can lead to higher CPCs and lower CTRs.

Tip: Always segment asset groups by product type to ensure ad creatives and copy are relevant.

2. Product Type Segmentation

Grouping similar products together keeps asset groups relevant and makes budget and promotion management easier. This structure also aligns well with seasonal demand trends.

Pros:

  • Keeps data organised and assets relevant.
  • Easy to manage and implement.

Cons:

  • May overlook business factors like margins and customer types.
  • Smaller categories might need grouping with other long-tail categories due to low volume.

Tip: Conduct data analysis before launching to ensure each category has sufficient volume.

3. Brand and Non-Brand Segmentation

This strategy involves separating brand and non-brand traffic, which can help manage branded content in Performance Max campaigns.

Pros:

  • Resolves Performance Max/Search overlap issues.
  • Allows for different ROAS targets and budgets for brand and non-brand segments.

Cons:

  • Can lead to unnecessary data segmentation.
  • May result in reduced revenue despite similar efficiency.

Tip: Build a comprehensive branded search campaign to avoid branded text ad issues and budget constraints.

4. Customer Segmentation Based on nCAC/LTV

Segmenting based on new customer acquisition cost (nCAC) and lifetime value (LTV) can help justify higher CPAs by understanding the true value of a purchase.

Pros:

  • Helps win high-value auctions.
  • Supports growth of efficient channels like email and branded search.

Cons:

  • Can result in lower ROAS and squeeze margins.
  • Requires careful management and long payback windows.

Tip: Implement this strategy with expert oversight to avoid profitability issues.

Two Performance Max Must-Haves

  1. Zombie SKU Campaigns: Focus on products that are active but receive few clicks. By isolating these products, the algorithm is forced to test them, potentially identifying new high performers.

  2. Catch-All Campaign: Set to low priority, this campaign ensures new products are picked up and targeted immediately, even if they aren’t included in existing campaigns.

Conclusion

Since its launch in late 2021, Performance Max has evolved significantly. Smart Bidding and Smart Campaigns have made bidding and budget allocation more accessible. To succeed with Performance Max, focus on structuring your campaigns to provide the best signal quality and volume.


Infographic: Performance Max Segmentation Strategies

Performance Max Segmentation Strategies

Key Points:

  1. Top Performer/High Margin Segmentation: Quick wins but needs careful product matching.
  2. Product Type Segmentation: Easy to manage but requires thorough data analysis.
  3. Brand and Non-Brand Segmentation: Fixes overlap issues but may lead to segmented data.
  4. Customer Segmentation Based on nCAC/LTV: High growth potential but complex to implement.

Enhance your strategies with Zombie SKU and Catch-All campaigns for comprehensive coverage.


Hashtags: #DigitalMarketing #MarketingAutomation #AI #PerformanceMax #PPC #AdStrategy #CustomerEngagement #UKMarketing #AdTech #ConversionOptimisation

 

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