What Does the Latest Meta Update Mean? Featuring Luke Austin

[00:00:00] Richard Gaffin: This episode of the E-Commerce Playbook Podcast is brought to you by Al. Build your influencer marketing program on autopilot with a simple workflow. For everything from gifting to paid campaigns, try it out for free at getsaral.com/champions/ctc or with the link in the show notes.

[00:00:18] Richard Gaffin: Hey folks. Welcome to the Ecommerce Playbook Podcast. I'm your host, Richard Gaffin, Director of Digital Product Strategy here at Common Thread Collective. And I'm here today. I'm joined by our war reporter, Luke Austin, who's our Director of Growth Strategy here at CTC.

He's in the war room. You can see our media buyers hard at work in the background behind him. But Luke, how are you doing today?

[00:00:36] Luke Austin: I'm doing great. Yeah. Uh, Wrapping up Q1, start to uh, get another really interesting year with its own really unique dynamic. So, it's been a bit of fun, right? can't wait for what's with Q2. And as, as always, Meta is thinking about, you know, what's new on the roadmap for them as are all the platforms.

So stoked to dive into one of the new features on the

[00:00:59] Richard Gaffin: Yeah, exactly. Right. Speaking of the year being interesting and unique, this is something coming up. Our sort of, shared with us by our meta rep about a huge update to ASC, which is of course, advantage plus shopping campaigns. And, and so let me just kind of read out what the update is real quick. You'll be able to define your engaged customers in addition to your existing customers using custom audiences in your ad account settings. This means you'll be able to see reporting breakdowns for new engaged and existing customers by using the audience segment breakdowns. So that's just a brief kind of overview of what this changes in, in summary, it's, you're able to define and create audiences off of engaged customers, but Luke, let's talk a little bit about what exactly does this mean?

What is the implications?

[00:01:43] Luke Austin: Yeah, definitely. And maybe before getting to the specifics as well, I think something interesting to reflect on is the new features that the platforms specifically met in Google that they release usually tell us something about the feature requests that they get most. And what the direction in which the platform is heading.

So we had our, our agency rep in town last week for a couple of days as well, had some really good conversations and got some insight into in addition to this, some other features on the roadmap for them. And What I see happening more is customer centric and profit centric conversations are happening in regards to the platforms and the features that they're rolling out.

We have some clients doing engaging in the beta to, to import product cogs into GMC and then be able to see profitability by camp by product and, and campaign for your PMAX campaigns and shopping delivery. Meta allegedly has this on their roadmap how prioritized it is, it is, we're not sure.

So that's on the profit side of things. And then customer centric this this feature that just rolled out, I think indicates that as well, which is like, rather than you know, more audience capabilities around traffic behavior, you know, add to carts or a website visits, this is really looking at customer segments to inform reporting and then ultimately decision making on platform.

So I think even before getting into the specifics of this one, like. Reflecting on how these new features indicate some of the broader conversations happening and where the platforms are going, profitability and customer centric is, is interesting to on as well. More broadly.

[00:03:18] Richard Gaffin: So, yeah, and this is as in contrast with, let's say, product development approach to the ad platform like Five, 10 years ago or whatever, or historically, which has been primarily around just engagement, driving engagement on platform and which caused as which caused them essentially to make decisions about the ad platform that didn't necessarily, wasn't helpful for conversion as much as it was helpful for them just to have more people being on Facebook.

So it sounds like what's, what's going on here is, is that. The product managers at Meta sort of heard or kind of see where, where things are heading and particularly following at least some of the direction that we're going, which is towards profitability, towards conversion, towards that kind of thing.

Is that, is that a good summary of it?

[00:04:04] Luke Austin: Totally. I think so. And even talking with our rep last week, there's like the, the focus for meta this year, they, it could be around delivery on a new video centric placement within their platform to get upper funnel. Brand awareness, video view campaign delivery, right? So there's a lot of directions they can go in terms of the development of their core ad business.

And so focusing on conversion campaigns, right, which is really where ASC has honed in on conversion, conversion campaigns on meta, and then, you know, more customer centric. And then hopefully some of this profitability centric reporting and optimization capability down the road. And then, you know, I think is just important to indicate.

And that's what we talk about all the time, right? In terms of what our core customer is focused on and where the landscape is at in e commerce right now. So, I think it's I think it's interesting indication of where things are headed.

[00:04:56] Richard Gaffin: Okay. Well, let's, let's dive into this specifically, right? So again, to reiterate, it's a new definition in ASC. You'll be able to define or audience definition, whether you're able to define engaged customers, in addition. To existing customers. So what, what's the implication of this? What does this mean?

[00:05:14] Luke Austin: Yeah, so it's important to tease out that there's As of now, it's, it's not, there's nothing here that's going to impact budget controls or optimization directly on platform. This isn't something that's going, that you're going to be able to leverage to optimize or target your campaigns. It's a reporting functionality.

So you're, you're able to just see another level of another yeah, level of reporting on your existing customer segment so that you can see that in more granularity. So right now, what you can do within on the account level for your ASC campaigns on meta, you define what your existing customer is.

Audiences. So you upload your website, you know, purchaser list from the Metapixel, maybe integrate your Klaviyo list other CRM data and, and define these are my existing customers. And then you can set your existing customer budget cap within your ASC campaigns to deliver however many percent of the overall allocation to those customers in that segment.

So what this is going to do is it adds in an engaged user segment so you can define not just your existing customers, but an engaged user subset as well. So then you'll have three dimensions within your ASC reporting new customers, engaged and existing, whereas right now you just have new and existing, so it's one more dimension to reporting on ASC campaigns.

And what, what's really important here is this isn't an optimization functionality. It doesn't affect budget control. So, defining these segments is really crucial to make it useful for you. Otherwise you just have another dimension to use in reporting. That's like, Cool. Those are my engaged folks.

Now, now what do I do with them? So we have a perspective on that in terms of how we've been thinking about the best way to define engaged, existing customer segments within meta, which we'll dive into. But that's the specifics of what's rolling out ASC campaigns. One more dimension with engaged customers.

[00:07:11] Richard Gaffin: So the idea here then is to give people more insight into. Or maybe more granular insight into where customers are in the funnel. Right. So the idea here is that, so new and existing are two kind of widely different buckets. And obviously there's overlap between new and engaged. I would imagine, of course.

But the engaged customers view gives us a sense maybe of like, Oh, this customer who just made us, or we made a sale on or whatever has been engaged with the website in some, to some degree within the last decade or so. 60 days or something like that over the last two weeks. So giving a little bit more insight into maybe what the timeframe is between first touch point and then sale, which obviously, I mean, there's obviously implications to how that could be useful for for marketers.

But maybe dig a little bit into, into that, like the clarity on, or the usefulness of this in terms of defining the funnel or location, the funnel more.

[00:08:08] Luke Austin: Definitely. Yeah. So the implication on decision making is, is the core thing. And you can define these customer segments in any way, like even right now in an ASC campaign, how we've been leveraging it is for some customers we're excluding. All time customer lists as much data as we can through the CRM or integration and the, and the Metapixel other customers were just defining a certain time period of up until a lapsing point or the churn point of their customer segment, because we actually want to go after those churned and lapsed customers still.

And so with either of these segments, you can define them in either way. You can say, I want my engaged segment of users to be. folks that have gone to the website but not purchased in the past seven days. And then my existing customers to be anyone who's ever purchased ever and anywhere in between in terms of the definition, which I think it's helpful because it gives us a lot of optionality in terms of how we view this, but I think what we're going to start to see is that these are going to be defined in really inconsistent ways for a lot of different brands.

And it begs the question, what's, what's the most helpful way to use that data? If you're really trying to look at your customer subsets and where they're at in the funnel, what is the best way to define what your existing and engage user segments are? And. How we approach that question and how we're thinking about the definition of this is based on how we look at what we have in status, active customer report.

I'm going to looking at the different distribution of our customers over time. And at what thresholds they're considered at risk, and then at what thresholds they're considered churned customers and then using those two specific time periods to define these audiences and inform decision making around those those points.

 We talk a lot about good and bad U G C , but if you want a streamlined way to do the good kind of U G C, which is product seating, then look no further than Sora. If you're still using a spreadsheet to save creator profiles for influencer management, you will love this Chrome extension that comes with Soar.

You can see engagement rates like projections and their fair price without even leaving their profile, and you can add them to your creator c r m with one click. And that's just step one. You can search for influencers, send personalized outreach emails, manage your relationships, and track performance all in one place.

Sound too good to be true? See for yourself with AL'S free trial. Just go to get al.com/champions/ctc or click the link in the show notes.

[00:10:37] Richard Gaffin: Gotcha. Yeah. So just to maybe add some definitions in there. So like, obviously if you guys have been listening to the podcast for a while you'll be familiar with this sort of idea of net new customers as defined or, and then the sort of sub definitions of your new customer file as active customers, at risk customers, and then churn customers.

And. Part of the way, the reason we think about it that way is to get a sense of what our expected LTV window is, like, over what period of time are people most likely to rebuy? And therefore, and obviously that all comes back to then how much money can you pay for the customer up front? And so it sounds like what this tool provides the opportunity to do is to define your engaged customers.

By let's say the window of time in which they're at risk. So maybe, yeah. Define a little bit more how that concept of like how we think about active customers versus at risk versus churned plays into the decision makings around how you define the engaged customer segment.

[00:11:35] Luke Austin: Definitely. So essentially there's three options and only two audience definitions within So, any brand is going to have to choose of the two audience definitions you have, you have the ability to define within meta, which of these three audience segments you want to leverage it for. And I think there's good arguments to be made either way, but the three core audience segments that we're talking about is.

Active customers at risk and then your churned customer groups and how we're defining those each store. It's a unique definition of a number of days between each of those points based on the distribution of orders for that specific brand. So, To explain that more, if you visualize like a distribution of orders on a scatterplot, so like a graph that just has dots everywhere, which is all of your orders and it has days between orders as as the main point in terms of where we're looking at each of these customers and the frequency between their orders.

And then we're grouping them. Based on the distribution percentages. So for for this brand specifically for bamboo earth, 10 percent of their customers have 10 days between their orders and then the 20 percent distribution threshold goes to 18 days. Then 30 percent goes to 26 days at 40 percent of distribution.

That's where the at risk customer segment is defined. So that for bamboo earth is at 30 days. If a customer has not repurchased within a 30 day period. They are now considered at risk, which makes a lot of sense. I think for that brand that they are personal Carol care products and oriented around subscription, subscription, subscription as well.

So like, that 30 day period being important. So at 30 days, that customer is considered at risk. And then all the way up to from 40 percent to 70 percent of your customer distribution, that's your at risk segment. And then at the 80 percent distribution level, the customers are considered churn, which the number of days of that for Bangor earth is at a hundred days.

So after 30 days, you're considered at risk. And after a hundred days, you're considered churn. So, you have engaged customers, 0 to 30 days, you have at risk customers, 30 to 99 days, and then you have churned, which is 100 plus days. Three customer segments. And then, you have two audience definitions now in meta engaged and existing customers.

And you can choose to define to essentially use those three audience segments in those within the two audience definitions and meta based on what's going to be most helpful for decision making for that brand specifically.

[00:14:05] Richard Gaffin: Gotcha. Okay. So maybe walk me through just so I can at least wrap my head around this. So let's say, okay. For bamboo, the churn threshold or the, the at risk threshold is 30 days. So what are the, what do you set? What settings are you applying? Let's say in the ad account to account for that, or to make sure that the engaged customer. Audience or whatever is, or you're tracking that in a way that's useful. Maybe this is what I'm trying to ask.

[00:14:31] Luke Austin: Yeah. I think for, so I think for bamboo earth in this specific example Based on the number of days between orders. So at 30 days, again, it's at risk at a hundred days are considered churn. What, what I really want to see. is the number of purchases coming through my meta campaign for that 30 to 100 day That's, that's what I think is going to be most interesting in terms of the use of that engaged segment. And so the language here is pretty unhelpful because like engaged We can define these in any way. So in this case, we'd be defining the engaged segment definition and meta as our risk segments. So any purchases that come through there, we know this is the percentage of my total purchase volume through ASC that is coming from at risk customers.

And then what, what you do is define your existing customer base as anyone past that point. So a hundred plus. So what you could then see is here's my meta ASC campaign. Okay. Here's the breakdown of new customers from this campaign. Here's the breakdown of orders that are coming from customers in my at risk segment, 30 to 100 days.

And then here's the percentage of customers that are coming through my 100, you know, plus churned statement. So that's one way you could use it for for your brand. In this case, Bamboo Earth, that could be helpful. The other way you could use it is to bump it up. So if you're using 0%. Existing customers, which Bamboo Earth fully focused on new customer acquisition through the meta campaigns, it might not be helpful to use the existing customer segment as like you're 100 plus.

And so what, what you could do in that case is rather than defining the segments is 30 to 100 and then 100 plus, you could go the other way and define it as 0 to 30 and then 30 to 100. So your engaged segment is actually your customers who have purchased. You know, between day essentially 1 to 30.

That's your engaged subset. And then your existing customer subset, the second audience definition would be your 30 to a hundred statements. And then you have a 0 percent existing customer cap. And so wouldn't be getting delivery or much delivery past that point. And so you could see really what is, what are the percentage of orders that are coming from folks within that zero to 30 day period as well, which is a really highly engaged customer, even before they get to that at risk inflection point.

[00:16:49] Richard Gaffin: Cool. So I think like, and, and I know you've got a jump scene. So in summary, essentially it's like this new audience definition of engaged customers is only as useful to you as you make it, right? There's a lot of ways that this particular tool could be essentially useless to you because it's, the definition is so wide and. The each brand, the, the way in which this is useful at each brand is so unique. So let's talk about like maybe one or two takeaways from this. Usually with these big, like meta changes, the question on everybody's mind is how do I have to prepare for this? Sounds like because of the budget and optimization thing, you don't have to prepare for it per se.

But if you want to make best possible use of this, What are like one or two steps that you could take?

[00:17:31] Luke Austin: Yeah, I think the one step would be getting very clear on what your at risk and churn thresholds are for your customers and then define your meta ASC audience definitions in alignment with those. I, I, I find it difficult to think of an alternative definition or use of these audiences. That's going to be more helpful than that using, you know, website visitor or traffic oriented, or even like other events, new content at Descartes.

You can really get great insights about who your customers are and what stage they're in the funnel they're at. And so defining those audience definitions based on at risk and churn thresholds and using that to inform it. Is going to be the most helpful, and that's how we're approaching the use of these out of the gates were getting them set up so that we can start to get some of the reporting and insights and then make this you know, spin up new campaigns.

Use this to inform our email and SMS campaign strategy off the back end of that as well. So get this set up in alignment with those audience definitions and then start actioning on that, spitting up new campaigns to get after those

[00:18:34] Richard Gaffin: Awesome. Cool. All right. I think we can leave it there. Luke, as always, we appreciate your on the ground sideline reportage for us. And of course, like for the audience, we'll let you know if anything comes to this, if there's anything interesting that develops as we continue to use this tool. But for now, if you guys are listening and you're not subscribed, of course, smash that subscribe button, whatever platform you're on, that is what helps us the most.

And Luke again, thanks for joining us and take care everybody. We'll see y'all next week.