Your Loyalty Programme Should Change How You Bid

The Loyalty Blind Spot

Most ecommerce accounts blend all customers into one audience. A loyalty member searching for your brand name gets the same bid as a first-time visitor. But their economics are completely different:

• • Loyalty members have already been acquired - their CAC is zero for this purchase
• • Their conversion rate is 3-5x higher than new visitors
• • Their AOV is typically 15-25% higher
• • They would likely have purchased through direct or email channels without the paid click

Every click you pay for on a loyalty member is potentially wasted spend - money spent acquiring a customer who was already coming back. This is the same principle behind suppressing existing customers in Shopping.

Member vs Non-Member Economics

Calculate these numbers for your account:

• • Loyalty member CPA: What you're paying per conversion for loyalty members clicking on ads
• • Incremental value: How many loyalty member purchases via ads would have happened anyway through other channels
• • Cannibalisation rate: The percentage of loyalty member ad clicks that cannibalise organic, direct, or email conversions
• • True incremental CPA: After removing cannibalised conversions, what is the real cost per truly incremental loyalty purchase

In our experience, 40-60% of loyalty member clicks on branded search would have converted through other channels. That's your cannibalisation rate - and it represents pure waste.

Bid Adjustment Logic

The approach depends on your campaign type and objective:

• • Brand campaigns: Exclude loyalty members entirely. They'll find you through direct/bookmarks/email.
• • Shopping (acquisition): Negative audience exclusion for loyalty members. Don't pay to acquire existing customers.
• • Shopping (retention): Separate campaign targeting loyalty members with lower ROAS targets (since their LTV justifies the spend)
• • PMax: Use audience signals to deprioritise loyalty members, though exclusion control is limited

Audience Segmentation Setup

The technical implementation requires clean data:

• • Upload loyalty member emails via Customer Match (weekly refresh minimum)
• • Segment by loyalty tier if your programme has tiers (Gold, Silver, Bronze behave differently)
• • Create separate lists for active members (purchased in last 90 days) vs dormant members
• • Dormant loyalty members may warrant reactivation campaigns with specific budgets

This is first-party data strategy in action - using your own customer data to make bidding commercially intelligent.

Suppression vs Investment

Not all loyalty members should be suppressed. The decision framework:

• • Active members (purchased recently): Suppress from acquisition campaigns. They're coming back anyway.
• • Dormant members (90+ days since purchase): Target with reactivation campaigns. They need a nudge.
• • High-value members: Consider competitive defence campaigns if competitors are bidding on your brand terms
• • About-to-lapse members: Worth investing in via targeted remarketing with loyalty-specific offers

Measuring Loyalty Impact

Run a holdout test to measure the real incremental impact of ads on loyalty members. Suppress ads for 20% of your loyalty audience for 30 days and compare purchase rates. The difference is your true incremental value - everything else is cannibalisation.

Next Steps