Catalog Ad Strategies for High-SKU Brands (Episode 4)

Welcome to The Catalog Cult, where we dive into cutting-edge catalog advertising strategies for e-commerce brands. In today’s episode, Dan Pantelo, CEO & Founder @ Marpipe, tackles a critical topic for high SKU brands: moving away from outdated hero product strategies and embracing the power of hero offers.

Key Highlights:

The Myth of the Hero Product

For high SKU brands, the concept of a hero product doesn’t always apply. While it works for small SKU brands, high SKU businesses—like apparel, furniture, or jewelry brands—need a strategy that considers their diverse product catalog.

Hero Offers vs. Hero Products

Dan introduces the idea of hero offers—sitewide discounts, tiered promotions, free shipping thresholds, or BOGO deals—that perform better for high SKU brands. These offers drive conversions across the entire catalog instead of relying on a single product.

Dynamic Product Ads (DPA) for High SKU Brands

Dynamic Product Ads (DPA) are the ideal solution for high SKU businesses. With DPA:

• Ads dynamically serve the right products to the right audiences.
• Brands can showcase a wide range of SKUs with personalized targeting.
• Campaigns can efficiently scale without wasting ad spend on low-performing products.

Feed Management for High SKU Brands

Feed management platforms like Feedonomics and DataFeedWatch simplify catalog organization and performance. These tools:

• Ensure your product data (e.g., inventory, descriptions, and pricing) is always accurate.
• Improve catalog ad performance by providing platforms like Meta with detailed product information.

Optimizing Product Sets and Segmentation

Dan explains the importance of product set targeting for high SKU brands:

• Segment your catalog by categories (e.g., men’s, women’s, kids’ apparel).
• Use performance metrics, like low CAC or high AOV, to create tailored product sets for acquisition and retargeting.

The Technical Side: Product IDs and Pixel Matching

Ensuring your product IDs in your feed align with your tracking pixel is crucial for accurate attribution. Misaligned IDs can result in lost performance and wasted ad spend.

If you’re ready to take your high SKU brand to the next level, subscribe to The Catalog Cult newsletter for actionable tips, strategies, and industry insights. Sign up today: https://www.marpipe.com/newsletter-sign-up-page.

Transcript

Dan Pantelo: 0:00

Business owners will make this mistake often where even though they're a high SKU brand, they will try to pick one hero product to focus their creative on. And this is where we see a lot of people trip up where they don't If you're a high SKU brand, instead of finding a HERO PRODUCT, you should be finding your HERO OFFER. Welcome to the Catalog Cult, the podcast where we explore best practices in catalog advertising. Dan Pantelo and today we're diving into something all high SKU brands will struggle with. Which is pivoting away from initial DTC performance marketing strategies that simply don't scale for high SKU brands. Remember there's a big difference between running a high SKU count brand and a small SKU count brand. And today we're going to dive into that. If your business has thousands of SKUs and you're wondering how to tailor your approach to drive better performance, this episode is for you. So today I'm going to cover DTC practices that don't translate for high SKU brands. A bunch of challenges specific to high SKU brands and how to address them and scalable strategies to optimize campaigns and increase AOV for you guessed it high SKU brands. Let's get into it. So there's the concept that you've all heard of called The hero product. If you're a student of DTC and you keep up with all the podcasts and you go to the event circuit, Everybody says you should build your brand around the hero product. For a lot of founders that are looking to break into making their first brand, there's this big focus on what's going to be my hero product. What's going to be my big main draw. And then the idea is if you can get like one really strong, compelling hero product, you can then build a brand around that by adding more and more products around that as you scale it. And so it's like the idea of the hero product is like a foot in the door approach, where if I can get one unit economic product, then I can build and scale the rest of the brand around that. So there's nothing fundamentally wrong with this logic, right? That's a tried and true proven strategy and a lot of brands have success with that and a lot of brands when they find a really killer Hero product, they'll just stick with that. one big example of this is AG1 has one SKU. They've only ever had one SKU and they figured out how to market and sell it. And the unit economics are great on that. You could build a brand around a hero product. However. If you are a high SKU brand, there are lots of different types of businesses and types of brands that are incompatible with this notion of the hero product. And I think it's a myth that needs to be dispelled rather quarantined in its own corner. So let me explain what I mean. if you're running an apparel brand, which is an inherently high SKU type of company or a furniture brand you will have a suite of different offerings. So if you're an interior design brand, you're going to have a lot of different things that are good for the living room. And maybe they all go together. Same thing for a fashion brand, right? You're going to release capsules of different things, like a cardigan and a shirt and maybe pants. Or if you have a jewelry brand, you're going to release collections and you're going to have a lot of different SKUs and you're going to have a lot of different sizes. And so naturally if you're building the type of business that has a lot of SKUs, the idea of finding a hero product becomes less and less relevant for you. Business owners will make this mistake often where even though they're a high SKU brand, they will try to pick one hero product to focus their creative on. And this is where we see a lot of people trip up where they don't If you're a high SKU brand, instead of finding a HERO PRODUCT, you should be finding your HERO OFFER, if the idea of picking one of your products to become a hero product doesn't make sense because you have a lot of SKUs as part of your business, then you should be finding the hero offer instead. So imagine some companies will do, 15% off site wide, or some might do if you order$200 worth of product, you get a free gift or a buy one, get one offer for your latest capsule right? These are ideas of different genres of offers. Like free shipping, if you exceed$50, these are hero offers that work much better for high SKU brands where there's not one individual particular SKU that's carrying more than 75% of your entire sales. So it becomes much more important like that type of creative strategy and the marketing strategy for a low SKU count brand that has a hero product. you're going to focus on making videos and UGC around that one hero product and explaining it brands with high SKU count can't AFFORD to be doing that. Because you're going to spend your video dollars on, focusing on one product that only makes up 4 percent of your sales? In that world, you're going to want to use DPA, right? Dynamic Product Ads or catalog ads that make it really simple for you to disperse your marketing spend across all your different SKUs and serve the right ones, the right people, and all of them can have that hero offer that, drives the most conversion. So if you're running a high SKU brand, you're going to want to focus on building out your hero offer, instead of trying to go down the rabbit hole of finding a hero product in a world where not one single product makes up the majority of your sales. The other consideration for high SKU brands that low SKU count brands don't really have to worry about is the whole idea of feed management, there's a whole industry of feed management platforms. Marpipe is not one of them, but you've heard of them already, probably like Feedonomics and DataFeedWatch or Productsup. there's so many feed management platforms that are out there. investing in one of these platforms is not really a priority for brands that have a small SKU count. And the reason why is because managing a product feed as you scale your SKU count becomes a much more complex and. Investing in one of these platforms just becomes like the cost of doing business at a certain point of scale. I would say probably after several hundred SKUs, it becomes inevitable that you're going to need to bring in a feed management platform and brands again, like AG one that only have one SKU really don't have to worry about this. So what is a FEED MANAGEMENT PLATFORM? Think of it like a glorified spreadsheet that is the constant up to date source of truth. About what products you have in stock and how many you have and what the product description is and all of that. Imagine one big spreadsheet where every row is a different product and you have for every product, you have a image column and the title column and the gender column and so on. So obviously as things go in and out of your warehouse. As you have more products, it's more complex to keep track of them all. And what's going on with what product and how much do we have and where is it. And so this really sits in between a feed management platform really sits in between your warehouse and the internet. And tells the internet what's going on with all of your products. So the feed management platform will, for example, plug into your website. And when you run out of a certain SKU, the website should update automatically to say that, this particular item is out of stock as of, one minute ago when we ran out of that item in the warehouse, So the warehouse is talking to your website through the feed management platform. And it's the same is true for everywhere else where you're selling stuff. The feed management platform is going to interface with all the other marketplaces you're on. So Meta shops, Amazon, target.com, TikTok shops, wherever you're selling. You just plug your feed management platform in, and it's a really easy way to stand up your store in all these different online marketplaces, rather than doing it manually, which is almost impossible, Imagine uploading one by one, every SKU to every platform that you do business on and then manually updating when something goes out of stock or when you add something new, You bring in a feed management platform to deal with that complexity, to ensure accuracy in your product information. And one other thing that is really important that I think a lot of people don't realize about feed management platforms is high SKU brands are going to be running dynamic product ads more often and running more catalog ads because they want to spread their spend out across their SKUs and serve the right SKUs to the right people. And the quality of your feed has a really big impact on the quality, like the performance of your catalog ads. What I mean by this is the more information you have about your SKUs in your feed. let's say that I'm selling this mug. I could just say that this is a cream mug, or I can give you a lot of details about what the mug says, what's on it, and I could have a much longer description. The longer my description and the more descriptive I am about what this product is, how much it costs like different lifestyle factors about it. If that's relevant, the more information you include in your feed, the better the advertising algorithm on, let's say Meta, we'll be able to serve that to other, people in your audience, So you're going to have better performance and better targeting. If you tell the ad algorithm more about your product and the feed management platform will allow you to add more details about your product really easily. it's like giving ammunition to the ad platforms where you run catalog ads. So imagine a feed management platform as, not only just being that web between your warehouse and everywhere where you want to sell all of your SKUs, but also being like a reinforcement layer to add platforms that tell them more information about your product, which will improve the targeting So there's a lot of other factors that will, that play in for instance, product photography to ensure that those stay high quality over time. All of that sort of stuff becomes much easier to do with feed management platforms, but those are the main two things. The other consideration that high SKU count brands are going to have is product set targeting and exclusions. So again, this is one of those tactical things that low SKU count brands that have one hero product do not have to worry about, but when you have a lot of SKUs, you're going to have a lot of categories because when you have hundreds of products, you're going to be categorizing them, So if you're an apparel brand, you're going to have men's women's kids, If you're just a menswear brands, you're going to have, tops, bottoms shoes, inevitably the more complexity you have, the more categories you have. As you build out your SKU set you'll be able to tell Meta,"Hey, run ads against not my whole catalog, but just this one category". So imagine I can run, I can deploy ad spend against my entire feed, which has men's, women's and kids clothing, for example, or I can segment that and tell Meta only look at my men's clothing and only run ad spend against that. And you can test, you can do those two things simultaneously and test them against each other and see how they perform because the targeting is going to end up being really different, When you have one third of your SKUs for kids, one third is for women and one third is for men. Obviously that's going to end up having a different performance profile than the one that's just men's because, you're targeting a whole different set of people, and so the algorithm trains on something entirely differently. And so sometimes running ads against your whole catalog will actually even work better than segmentation, but sometimes segmentation wins. You want to just be testing that, you want to be testing and measuring how's the segmenting your feed by categories, impact your ad performance. If you haven't run that test before, if you haven't segmented your feed in Meta and run as different ads different categories of your feed, then that's definitely a test that's really worth running because the performance will definitely be different. Some brands see that it's better to run against the whole feed some. Live and die by segmentation. It's important if you have a high SKU count brand that you have an opinion on that, that you have a perspective on it, that's well backed by testing data. So again, another complexity, but also win for high SKU count brands. Using tools like Marpipe, one place that we can go beyond regular segmentation by Reddit, regular product categories is this sort of holy grail segmentation capability that everybody wants to have, which is, hey, could I segment my products in Meta based on customer acquisition costs or maybe certain performance metrics, like return on ad spend or anything like that. Or maybe even profitability, So that's actually one of the big things that we're building right now at Marpipe that we'll have live in early Q1. Using a tool like Marpipe, you will be able to segment. your catalog, not just based on product attributes like men's versus women's clothing, based on revenue metrics. So imagine I just want a category that is just my top 10%. Lowest CAC products. And that can just become your new customer prospecting feed, cause it's going to acquire new customers at the lowest cost. Then you can run retargeting against your highest top 10% highest AOV products. So when these products are included in your cart, you have the highest average order value that you can run for retargeting. So you have an acquisition feed that's built for acquisition, a feed that's built for capturing the most amount of AOV on the backend. And so you can structure a funnel of catalog ads that are segmented based on performance metrics rather than just product attributes. So that's going to be a new capability that's coming to you that I know a lot of brands are really excited to dig into. One other consideration for high SKU count brands is, and this one is pretty technical and pretty annoying, but it's a really important base that you got to make sure you have covered and someone on your team is well educated on. And that is product IDs. So if you have hundreds or thousands of SKUs, then every SKU in your product feed is going to have a unique product ID. And then when you upload those products to something like Meta, or to Shopify So there's going to be product IDs that are being tracked by your metapixel on your website as well. And if there is a misalignment between the product IDs in your feed or on your site and the ones that are being tracked in your pixel, then you're gonna be losing out on a ton of attribution. and when you lose out on attribution, you lose out on performance, right? Because the algorithm isn't learning. It's important to make sure that IDs on your pixel match the product IDs in your product catalog. One way that is really easy to avoid running into this mistake, you should not be creating a ton of new source feeds, every time we go into an ad account and we see in Meta Commerce Manager there is like a ton of source feeds that you've uploaded for different things I can guarantee you there's gonna be a ton of attribution loss and your ideas are gonna be spread out all over the place that's where a really easy way to run into that problem. You should have one source feed in Meta and you should have a supplementary feed that can be connected to it. If you want to test with the creative, but no more than one base source speed where all the learnings accumulate and where you can ensure that the product IDs match across your Metapixel so that you have clean attribution. If you have trouble diagnosing this problem, you could dig it. So if you take a look at your pixel you should be able to see whether product IDs are matching signals of that. If you have trouble diagnosing this problem or fixing it, obviously you can reach out to us at Marpipe. And we'd be happy to help. But that's a really common problem that we see some early brands hit and the good brands that are really used to scaling high SKU counts and DPA campaigns, they kinda they got this down to a science. So that's just one more consideration that small SKU count brands don't have where, obviously attribution is much easier on a product level when you have very little products. So that's all for this episode of the Catalog Cult. High SKU count brands definitely face unique challenges, but with the right strategies, you can scale efficiently. And definitely maximize results. And honestly, a lot of these things are a competitive advantage against low SKU count brands. There's a lot more things you can do and take advantage of, you can have a higher return purchase rate than low SKU count brands. So there's a lot of advantages. And so these considerations don't look at them as taxes that you need to pay. Look at these as like, how do I lean into this and maximize this advantage? So if you're looking for more insights or have any questions, connect with me on LinkedIn Dan Pantelo or visit marpipe.com Thanks for listening. Until next time keep winning with catalog ads. I'll see you soon.