---
title: "From branded bids to retention ROI: The spend portfolio model that turns waste into margin"
url: "https://parcellab.com/blog/retention-revenue-spend-portfolio/"
type: Blog
date_published: "2026-05-20T13:32:19+00:00"
date_modified: "2026-05-20T13:33:38+00:00"
description: "Stop double-paying for your best customers: three shifts that unify paid and retention spend into a single profitability engine."
---

*You’re paying twice for your best customers. Here’s the framework to stop*

**“We started noticing that we have a really high impression share on our branded terms, especially in the off-season. And so it’s a high likelihood that no one else is bidding on that. But then we’re looking at our CPCs, and they’re not rock bottom. I think that was our biggest indicator.”**

That observation – the gap between what Google charges and what the market actually requires – is the kind of thing that hides in plain sight. Most eCommerce brands never notice it. [Nate Hewett](https://www.linkedin.com/in/nathanhewett/), Performance Marketing Lead at [fun.com](http://fun.com), did so, which led to one of the largest efficiency gains in company history.

## The problem nobody is diagnosing

In most eCommerce organizations, paid acquisition and CRM run as separate teams with separate budgets and separate KPIs. The paid team optimizes for ROAS, while the retention team optimizes for open rates or conversion. Nobody sits in the middle asking the uncomfortable question: are we paying Google to reach customers we could reach for free through email or SMS?

It’s standard practice to bid on your own branded search terms. It feels like a protection tactic. You don’t want a competitor taking that top spot. Every year, the budget renews, the campaigns run, and the assumption that branded bidding is non-negotiable becomes organizational gospel.

Automated bidding tools make this worse. Google’s Target ROAS and similar systems optimize for performance – conversions and revenue – not for spend efficiency. If nobody else is competing on a branded term, the system should theoretically bid a penny.

Instead, it often bids $0.30 or $0.40. The ROAS still looks healthy, so nobody flags it. The brand pays a premium for attention it already owns organically, and the waste hides behind a metric that appears to be working.

Then there’s the marketplace paradox. [Fun.com](http://fun.com) supplies one in four costumes sold on Amazon in the US. That’s a dominant market position. But customers don’t remember the brand. They remember Amazon. You can be the biggest supplier in your category and still be invisible to the people buying your product. Market share and brand ownership are not the same thing. Nate Hewett, who leads performance marketing at [HalloweenCostumes.com](http://HalloweenCostumes.com), describes the tension:

**“Do I really need to be sponsoring branded terms? And I think for us, that’s even a more unique question than most brands, because our domain, [halloweencostumes.com](http://halloweencostumes.com), technically is branded, but it’s also very generic, right? So it’s kind of hard to draw that line in the sand.”**

His counterpart on the retention side, [Di Lyngholm](https://www.linkedin.com/in/dilyngholm/), faces the mirror image of that problem:

**“What I was trying to solve is getting customers to remember [HalloweenCostumes.com](http://HalloweenCostumes.com). Since it’s a one-time purchase for most folks, they tend to think HalloweenCostume.com, Costumes.com, or Halloween.com. So keeping that actual brand top of mind for them and getting them to come back year over year sometimes is a struggle.”**

Two teams, two problems, and one shared root cause: the company was spending to reach customers it already had and underinvesting in owned channels that could bring those customers back without paying an intermediary.

## The experts

Nate Hewett leads performance marketing at [HalloweenCostumes.com](http://HalloweenCostumes.com), part of [fun.com](http://fun.com). Di Lyngholm leads CRM and retention. Together, they operate in one of the most extreme seasonal environments in all of eCommerce – roughly 85% of annual revenue lands in a six-week window between September and October. [fun.com](http://fun.com) owns its fulfillment, warehousing, review system, and loyalty program. One in four costumes sold on Amazon in the US comes from their portfolio.

2024 made the pressure worse. It was, as Nate puts it, *“the year of tariffs”* – with most products sourced from a tariffed country, margins compressed further. But rather than responding with across-the-board cuts, Nate and Di each launched initiatives that attacked the same underlying problem from opposite sides: Nate audited where paid spend was leaking, and Di built a retention engine designed for profitability, not just engagement. Their two initiatives ran in parallel and together demonstrate that the biggest growth lever in eCommerce isn’t spending more. It’s spending smarter on customers you already have.

## The invisible tax on your own traffic

Nate frames the moment that changed the conversation:

**“It was the year of tariffs. And so not only were we dealing with this hyper seasonal environment, but we also have compressed margins because of most of our product comes from a country that is being tariffed. And so for us, a lot of it was: how do we still get in front of customers? How do we remind them that they have purchased from us before? That they should come back – without having that waste of spend?”**

The response was to audit where spend was leaking – and that audit revealed something uncomfortable. The company was paying premium CPCs on branded search terms where it held 95%+ impression share and had strong organic rankings. Google’s automated bidding was charging more than the competitive landscape justified. In practical terms, nobody else was bidding on those terms, yet the system was charging as if someone were.

At the same time, CRM and paid were operating as separate worlds. Engaged email and SMS subscribers – people who had already opted in and were responsive on owned channels – were still being targeted with paid ads. The same customer was reached twice, at two different costs. One of those costs was zero. The other was whatever Google decided to charge.

Every dollar overspent on branded terms is a dollar not invested in owned-channel relationships. Paid spend is a one-time transaction – you pay, you get a click, it’s over. An email subscriber, a loyalty member, an SMS opt-in – those are assets that compound. When you fund Google’s margin instead of your own retention infrastructure, you’re choosing the depreciating asset over the appreciating one.

## The spend portfolio model: Three shifts that turn waste into retention ROI

The solution isn’t a single tactic, but a mental model shift. Instead of treating paid and retention as separate budget lines, Nate and Di’s team began treating all customer-facing spend as a unified portfolio. The goal: allocate every dollar to the channel where it creates the most incremental value. Three shifts made this real.

### Shift 1: Unified visibility across paid and organic

Di puts it simply:

**“Make sure your paid and organic teams are talking to each other.”**

It sounds obvious, but it almost never happens. The uncontested bid initiative at [fun.com](http://fun.com) only started because SEO and PPC were brought together into a small task force. They stitched together data from SEMrush, Google Ads – specifically, impression share and CPC data – and internal ranking tools into a single view.
The insight was only visible when both data sets lived side by side:

High impression share + Strong organic rankings + Non-rock-bottom CPCs = **Wasted spend**

Without cross-functional visibility, nobody would have flagged it. The paid team saw “good ROAS,” and the SEO team saw “strong rankings.” Neither team could see “we’re paying for traffic we’d get anyway.” The diagnosis required both lenses at once.

### Shift 2: Spend as portfolio allocation, not channel budgets

Di describes the lever her team controls:

**“We have the most influence with folks that we’ve gotten to sign up for our email and SMS messaging, right? We can contact them again, and we can also make sure that we’re not spending to get in front of them on the paid channels.”**

The team implemented audience suppression: engaged email and SMS subscribers were excluded from paid targeting through a pipeline running from Attentive (a marketing platform) to Segment (a CDP platform) to paid channels. This is portfolio thinking in action. If a customer is responsive on a channel that costs nothing to reach them – email – there’s no reason to spend $0.30 reaching them through paid search.

The branded bid walk-down freed roughly 60% of branded spend. That budget was reallocated to initiatives with higher incremental value. The very growth programs that margin pressure had threatened to kill.

### Shift 3: Retention as margin liberation

Di’s team built a profitability-optimized retention engine. They tested different incentive amounts across customer segments, varying both the size of the site credit and how recently the customer had purchased. The expectation was clear:

**“We anticipated the highest site credit and the closest to last year’s purchasing being the winner. And it wasn’t, which was really interesting**.”

The team tested 15% coupons against 10% coupons and chose the one with a higher margin, not a higher conversion rate. They tested site credits against percentage discounts and found that coupons won – counter to what most marketers would predict, since a $30 credit feels like a bigger deal than 10% off. But the data was clear, and the simpler format also reduced operational complexity.

These findings only emerge when you measure retention through a margin lens rather than a revenue lens. If you optimize for conversion rate alone, you pick the higher discount every time. If you optimize for profitability, you sometimes choose the variant that converts less but earns more.

This is where the two initiatives connect. Nate freed the budget. Di turned it into compounding customer relationships. Two halves of the same coin.

If you want to read more on their tactics, Nate and Di also shared a [detailed step-by-step spend portfolio playbook](https://parcellab.com/blog/retention-revenue-playbook/).

## Strategic principles for eCommerce leaders

These principles apply whether you’re a hyper-seasonal retailer or a year-round eCommerce brand. The specifics might change, but the mental model doesn’t.

### Audit your branded spend before you cut anything else.

Look at the impression share on your branded terms. If you’re above 90% and CPCs aren’t sitting at the floor, you’re likely overpaying. Cross-reference with organic rankings – if you’re on page one organically for those terms, the paid coverage may be redundant, at least outside of [peak periods](https://parcellab.com/blog/how-to-turn-your-data-into-peak-season-success-and-long-term-customer-loyalty/). This is the lowest-risk efficiency play in most paid programs, because you’re removing spend on traffic you already capture through organic search.

### Build the suppression bridge between paid and owned.

If your CRM platform and your paid channels don’t share audience data, you’re double-paying for your best customers. The minimum viable version is straightforward: suppress email and SMS engaged subscribers from paid search and paid social retargeting. The more sophisticated version uses engagement signals – clicked but didn’t convert, for example – to dynamically shift customers between channels based on where they’re most likely to respond.

### Measure retention in margin, not in conversions.

Revenue per email is a useful metric, but revenue per email minus the cost of the discount is a better one. Di’s team found that a 10% coupon outperformed a 15% coupon on profitability, even though the 15% had a higher conversion rate. If you only measure conversion, you pick the wrong winner. Build margin into your retention reporting from the start.

### Question the “untouchables” on a regular cadence.

**“Even if it looks great, run a test and make sure it actually is great. We never would have considered pulling back on branded terms before. It was a totally off-the-wall idea. And it just shows that you do need to be questioning things that maybe even you wouldn’t have historically.”**

Nate captures the broader principle: Every organization has sacred cows – budget lines nobody questions. For [fun.com](http://fun.com), it was branded search spend. For your company, it might be something else entirely. Build a quarterly habit of asking: what are we spending on that we’ve never tested not spending on? The answer is often where the biggest efficiency gains hide. Not because the spend was wrong when it started, but because the conditions that justified it may have changed while the budget stayed the same.

## Where the margin actually lives

Di sets the context for what makes this approach possible – and necessary:

**“We always have pressure being a Halloween company. The majority of our sales, 85%, happen** **in September and October. We’ve said before, pressure makes diamonds, and we’re all a little bit kind of like adrenaline junkies here.”**

Most eCommerce brands respond to margin pressure by cutting programs or chasing new channels. The smartest ones look inward. They audit where they’re paying for attention they already own. They redirect that spend toward owned-channel relationships that compound over time. They measure retention through a profitability lens, not a vanity metric lens.

The results from [fun.com](http://fun.com) speak for themselves: roughly 60% branded spend reduction with flat revenue, and a retention journey that increased revenue per email by 77% – all from the same customer base, the same products, the same team. No new channels or tools, just a clearer view of where every dollar was going and a willingness to question what had always been done.

The first step is simple: look at what you already own.

## Your questions, answered

  Should I stop bidding on my own branded search terms?

Not necessarily – but you should test whether you’re overpaying. If your impression share is above 90% and CPCs aren’t at the floor, you’re likely bidding against yourself. Start with a slow walk-down in a low-risk period and measure total revenue – paid and organic combined – not just paid revenue in isolation.

  How do I know if I’m double-paying for the same customers across paid and CRM?

Check whether your email and SMS engaged subscribers are being suppressed from paid retargeting audiences. If they’re not, you’re almost certainly paying to reach customers you could contact for free. Connect your CRM platform – Attentive, Klaviyo, or whatever you use – to your paid channels via a CDP or audience sync tool.

  Does cutting branded spend hurt brand awareness long-term?

Nate’s team monitored this closely. Organic rankings, impression share, and competitive landscape were checked twice weekly. The key is to watch for competitors entering the auction. In the off-season, no competitor was bidding – so pulling back had zero impact. During peak season, the competitive landscape changes, and bids may need to go back up.

  How do I measure retention profitability, not just retention revenue?

Look beyond conversion rate and revenue per email. Factor in the cost of the incentive, the margin on the products sold, and the cost-to-serve. Di’s team found that a lower-converting but higher-margin coupon – 10% versus 15% – was the better choice. That’s a conclusion you only reach with a profitability lens.

  Is this approach only relevant for seasonal businesses?

No. The principles – unified paid and organic visibility, audience suppression, retention as margin liberation – apply to any eCommerce brand. Seasonal businesses just feel the pain more acutely because every wasted dollar is amplified by a compressed revenue window.