Help Your Merchants Cut Customer Acquisition By Up To 50% (2023)

Merchants Cut Customer Acquisition

Since its initial launch in May of 2022, Shopify Audiences has helped merchants target their digital advertising with greater precision, with many participating merchants reducing their cost of customer acquisition by up to 50%.

Today, we’re excited to increase this offering with something new: Audiences v2.1. This release delivers our best performing algorithms yet. With Audiences v2.1, you can help your merchants in North America find more customers across all major ad platforms—expanding from Meta, Google, and Pinterest to now include TikTok, Snapchat, and Criteo. Additionally, we’ve launched a new benchmarking feature, which allows you to compare how your merchants’ ads are performing next to stores with similar target bases and business models.

In a customer privacy climate that’s increasingly restrictive, Shopify Audiences has what you need to maximize the performance of your merchants’ ads. As a Shopify Partner, Audiences is a key differentiating tool that will help you deliver maximum return on ad spend (ROAS) to your merchant clients. Let’s take a look at the features that make Shopify Audiences v2.1 an essential tool in your toolbox.

What is Shopify Audiences?

Shopify Audiences generates personalized audience lists and insights available only on Shopify, to better target buyers that are more likely to convert. Audiences is free and available exclusively to Plus merchants using Shopify Payments, operating in the US or Canada.

The Audiences algorithm develops audience lists from millions of commerce intent signals across Shopify. Lists automatically export to your merchants’ connected advertising accounts to better inform their targeting with a level of precision not available on the ad platforms alone. Lists can be customized based on the funnel stage and ad platform across Meta, Google, Pinterest, TikTok, Snapchat, and Criteo.

The new Audiences benchmarking tool compares performance of a merchant’s campaigns to that of similar merchants—a powerful feature we’ll go into more detail about below.

How can your merchants benefit from Shopify Audiences?

Shopify Audiences comes with a number of benefits, which have expanded in this most recent release.

Better results for existing ad campaigns

The Shopify Audiences algorithms begin with a base of knowledge about participating merchants’ stores and matches that against meaningful insights about buyer behavior on the Shopify platform to help identify buyers who are ready to enter your funnel. Shoppers represent every stage of the buyer’s journey, from initial browse to checkout.

Let’s say that one of your merchants sells swimsuits. With an ads platform alone, you could target your merchant’s ads towards buyers within certain demographics or interest areas, but that can only go so far in narrowing targets.

In contrast, when running the same campaign with Shopify Audiences, the platform’s algorithms would look at an array of customer data points to predict future behaviors. For instance, the Audiences algorithms might provide insights based on people who have purchased complementary products in the past.

Shopify Audiences doesn’t replace your clients’ digital ads accounts; it creates an extra layer of insight to increase the precision of their ad targeting.

Ads are still served in the same places. The difference is that now, they’re put in front of the right audience, targeted with greater precision towards audiences based on millions of insights drawn from similar audience behavior across Shopify.

Produc images on screen

For more precision, you can select a different list type for every stage of your merchant’s funnel.

A high-intent, lower-reach audience list contains the highest ranked potential customers and is appropriate for driving conversions. For consideration, a mid-intent, mid-reach audience is appropriate, as it contains a larger list of potential customers for expanded reach. For awareness, a lower intent, higher reach audience or lookalike audience is a good pick, since this contains a large list of potential customers.

Precision targeting 

Audiences algorithms leverage machine learning and constantly adapt based on what they’re seeing within the buyer intent data that the system receives as more merchants opt into the underlying Audiences data co-op. If you tried Audiences a year ago with your merchants, you’ll now experience an improved product today with v2.1—and it will only be better a year from now, as more customer intent signals are pulled in.

These improvements happen both organically and purposefully, as the Shopify Audiences data team continually launches and tests multiple competing algorithms in search of better models to maximize conversions and minimize cost to purchase ad impressions (CPM). It’s survival of the fittest: the algorithms deployed in Audiences today are the ones that consistently achieved the highest conversion rates in testing.

Improved performance with new benchmark data

New to Audiences v2.1, benchmark data allows you to see how your merchants’ ads are performing in comparison to merchants with similar business models in the same industry over the past 30 days.

Benchmarks dashboard

This data allows you to fine-tune your merchants’ ad sets, making improvements to key metrics, including click-through rate, conversion rate, cost per 1,000 impressions, cost per click, and cost per conversion.

After all, if that swimsuit seller is in the business of high-end, custom-made, luxury fashion, their approach to business business model is fundamentally different from that of a discount producer or reseller. Audiences allows you to compare your merchants’ ad performance to that of other swimwear merchantshigh-end swimsuit sellers, rather than to that of merchants who operate in the same overarching industry but have significantly different business models.

Lower customer acquisition costs

Shopify Audiences can decrease customer acquisition costs as much as 50%.

With the cost of digital advertising increasing, SIMKHAI, a luxury apparel retailer for women, turned to Shopify Plus Partner Maison MRKT, for help. Maison MRKT implemented Shopify Audiences to generate a list of high-intent buyers. In this way, the brand created multiple audiences to deliver its new marketing strategy to new customer segments. Cost-per-acquisition decreased by 54%, with an 84% higher conversion rate.

Read the full customer story here.

Man modeling coat with prices

Shopify Audiences is a powerful addition to our overall marketing system that helps us keep accounts balanced and profitable.

Amlan Das, CEO, Made by Das, Client: Scott Flowers

How to help your merchants get started with Shopify Audiences

To be eligible for Shopify Audiences, merchants must be a Shopify Plus merchant using Shopify Payments, operating in the US or Canada. Merchants should log in to their accounts to see if they’re eligible to install the app. Then, have them complete the following steps:

  1. Install the Audiences app.
  2. Turn on data sharing. This is how Audiences develops insights. Remember, merchants’ proprietary data is safe, secure, and hashed. Merchants should make sure to update their privacy policy to ensure they’re staying compliant with US state privacy laws.

Next, you as a partner agency can complete the following steps for your merchant:

  1. Connect an ad platform of choice, including Meta, Google, Pinterest, Criteo, TikTok, and Snapchat. Pro tip: We recommend starting with Meta.
  2. Shopify Audiences automatically generates audience lists that will export to the connected ad accounts. Note: It will take a couple days for those audiences to fully populate in the ad manager.
  3. You can now create and run an ad campaign in an ad platform targeting your merchant’s custom audience list.

Helping Your Merchants Get Even More Out of Shopify Audiences

1. Select audiences based on advertising goals

Different audiences will be more or less relevant to merchants based on their current advertising goals. We recommend experimenting with your merchants’ ad campaigns to find the results that work best for their brand and products.

For prospecting, we suggest using a mid-intent or lookalike (lower intent, broad reach) audience to discover new buyers with potential interest in a merchant’s products. These are larger audience list sizes with a variety of data incorporated, including past purchase behaviors that indicate possible interest in the products a merchant sells.

For retargeting, we suggest experimenting with a high-intent audience—a targeted, lower-funnel audience list built with proprietary signals and matching algorithms that indicate intent. This should lead to higher conversion rates.

2. Adjust targeting on exported lists

Tweaking targeting shouldn’t start and stop within Audiences itself. Once an Audiences list has exported, you can tweak it to more narrowly achieve an objective, such as targeting only men or only women. While this reduces the reach and increases cost, narrower targeting can help merchants better serve ads toward the most relevant audience, and therefore increase conversions.

3. Test, test, and test some more

Like everything in digital advertising and metricking, experimentation is key to ensuring Audiences does all that it can for merchants.

First, check to confirm that you’re putting enough spend toward your merchants’ Audiences powered ad sets. A good benchmark is about 50 conversion events in seven days to exit the learning phase. If they’re getting less than that, try adjusting spend.

Next, try running experiments to help you more rigorously understand the incrementality of Shopify Audiences. You can start by identifying an ad set that’s working well in their digital ad manager. Then, run it head-to-head against Shopify Audiences. For instance, you might try putting a Shopify Audiences high-intent list against a retargeting list that is not boosted by Audiences. Alternatively, you can run a prospecting Shopify Audiences mid-intent list against a prospecting list without Shopify Audiences.

Happy Hippo

When they first launched in 2006, Happy Hippo was determined to offer better, safer, more fun bath products for children than was currently on the market. They were quickly successful, moving from a kitchen table production line into major stores and craft shows across Canada.

Ready to scale, Happy Hippo became a Shopify Plus merchant and began using Shopify Audiences to help establish its own DTC presence. In its first campaign, 23% of the shop’s sales came from new customers that were directly attributable to Shopify Audiences. Just as impressively, return on ad spend (ROAS) had a 4.7 times return, there was a 51% lower cost per thousand advertising impressions (CPMs), conversion rate rose by 200%, and there was a 72% lower customer acquisition cost.

Confident in its use of Shopify Audiences, the company then took the lookalike audience it had created in its initial campaign on Facebook and further honed its efforts to scale its reach across Meta platforms.

Help your clients find more customers across top ad platforms with Shopify Audiences today

Shopify Audiences is a powerful tool in your back pocket for helping differentiate your merchants from their competitors—and you from yours. With Audiences on your team, your merchants will cut through the noise to attract the right customers and make their ad dollars go further.

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