At Online Retailer, the farsiight team connected with more than 100 retailers, all asking the same burning question: “How do I gain better efficiency from my paid media spend?”
In today’s challenging economic climate, with retail sales declining over the past quarters, getting more for less has become a priority for all our clients.
To help avoid some of the common pitfalls and instead embrace tactics that can make a real difference, I’m diving into our five key recommendations. These are based on our work with retail and eCommerce clients and will help you get more from your media budget.
1. Avoid over-investing in bottom-of-funnel media
A common and costly mistake we see is over-allocating media budgets to lower-funnel activities on platforms like Google and Meta. While this might boost your Return on Ad Spend (ROAS) initially, it often fails to translate into meaningful revenue growth. The reason? These campaigns usually target existing customers, sacrificing new customer acquisition.
For example, one direct-to-consumer brand saw a significant drop in new customers after shifting media spend to lower funnel activities. Over time, the brand exhausted its customer database, leading to a decline in performance. Prioritise a balanced media allocation that supports both short-term gains and long-term growth.
2. Rethink low-incremental-value campaigns like Google Ads
Google Ads brand campaigns often add little value to your bottom line. Reducing or even eliminating them can have minimal revenue impact. We recommend running brand campaigns only when competitors are bidding on your branded terms or when promoting sales.
Also, keep in mind that branded searches are included in Performance Max (PMAX) campaigns by default. Exclude branded terms from PMAX and run a manual branded search campaign to control spend. We’ve helped clients save millions by implementing this strategy—now’s the time to assess your brand spend.
3. Tighten campaign exclusions on Meta
While some suggest using Advantage Plus Shopping for all awareness levels, we still prefer separate TOF (Top of Funnel), MOF (Middle of Funnel), and BOF (Bottom of Funnel) campaigns. This structure allows better control over spend and creative.
Ensure your TOF campaigns exclude previous purchasers and website visitors to focus on new customers. Though this might lead to lower reported results, it often improves overall metrics like your marketing efficiency ratio (MER). If you have a strong retention strategy via email and SMS, consider reducing spend on retargeting and retention campaigns. Aim for a 70/30 budget split in favour of new customer acquisition.
4. Focus on conversion objectives on Meta
If you’re running traffic or awareness campaigns on Meta that aren’t focused on conversions, consider pausing them. Conversion campaigns, especially with purchase objectives, consistently deliver the best results. Exceptions are lead-gen campaigns for email list-building or, if you’re a large-scale brand, expanding beyond conversion limits.
5. Refine your product marketing strategy
Brands often attempt to advertise their entire range on Google, which harms media efficiency, especially with large SKU ranges and limited budgets.
If you’re using a single PMAX campaign for all SKUs or have limited segmentation, we recommend rethinking your strategy to align with business objectives. Given the focus on profitability, consider segmenting campaigns into “High Margin” and “Low Margin” categories based on GP margin. This allows more budget allocation to high-margin SKUs, positively impacting net profit.
Beyond segmentation, review your product feed to exclude items with limited size ranges or poor historical performance. Prioritise products that yield the best outcomes through paid media versus other channels.
Ben Somerville is director at farsiight.