Paid Case Study: Using Profit Margins to Improve Google Shopping Campaigns
- Improve return on investment
- Make AdWords a sustainable, continuous profit generator
- 9x increase in number of sales per month
- 610% average increase in monthly revenue since implementing this strategy 8 months ago
- ROI was in the red until we restructured our client’s Google Shopping campaign. Today, our client’s monthly ROI is 858% and it is steadily increasing month-over-month
Our client is a family-owned business selling pet food, pet toys, and other pet products across the United States. They own distribution in retail, as well as sell direct-to-consumer on their own website. Although a fast growing sector, the pet industry is extremely competitive online, and our client was feeling the pressure. They had been running their own Google AdWords Shopping campaigns over the past few years with minimal training and expertise. Unfortunately, they were losing money and needed help.
Since our client sells almost 2,000 products, our objective was to strategically restructure our client’s Google AdWords Shopping campaigns to focus on products that have high profit margins. Our goal was to turn our client’s unprofitable account into a highly profitable account, which continuously grows in terms of revenue and return on investment (ROI) from their Google Shopping efforts.
Our first tactic was to determine our client’s actual profit margins for every product they sold. We considered all of our client’s costs (e.g. shipping, ad spend etc.) and sales metrics (e.g. selling price, sales volume, etc.) to determine their actual profit margins. We based our campaign structure around that.
We discovered the top products in terms of actual profit margins and employed the classic 80/20 rule, to structure our Google Shopping campaigns to focus about 80% of our efforts and budget on roughly 20% of our client’s products – the high profit margin products.
In addition, we allocated about 20% of our efforts and budget towards the lower margin products, which allowed for efficient use of ad spend.
As the campaign ran and we collected online sales, revenue, and transaction data, we made continuous optimization efforts in order to continuously improve our client’s overall return on investment.
Our strategy proved to be successful for our client as we experienced an immediate boost in revenue and return on investment, upon pausing their old campaign structure and launching the new one.
Our strategic approach to focusing on products with high profit margins resulted in more sales with less ad spend.