Google Shopping case: medical equipment store (NDA)
Results
10.01.2017 — 12.31.2017 (before) | 05.01.2018 — 07.30.2018 (after) | Change | % of change | |
ROAS | 147% | 361% | +214% | +145% |
Conv.rate | 3% | 4.62% | +1.62% | +54% |
Conversions | 1,600 | 2,353 | +753 | +47% |
Av. margin | 31.45% | 32.85% | – | – |
ROMI (Shopping) | -31% | +54% | +85% | – |
Net profit (Shopping) | -$6,782 | +$8,705 | +$15,487 | – |
Background information
Client: online store with medical equipment.
Region: USA.
Service: creating and optimisation of Google Ads campaigns (Shopping, Search, Video, Remarketing).
How it was
We negotiated about cooperation with this client one year before signing the contract and getting down to work. Unfortunately, he chose another agency and worked with it for about 4 months. Some time later the client didn’t get what he had expected, so he came back to us with the request to increase net profit and ROI in Google Ads account.
We started to work with making an audit. Technically, everything was well (there were some small flaws, but they weren’t critical). But there were some mistakes in marketing and strategy — and it was not so good:
- The ads were set up not for products, but for products category.
- There wasn’t any splitting into Alpha/Beta campaigns.
- Search campaigns were pretty flimsy and too general, they were targeting far too wide audience.
Unfortunately for our client, data from Google Analytics wasn’t showing sensible bad results:
This data from Image 1 helps us to make some conclusion:
- The total ROAS for 3 months of work is $45,721 (Revenue) / $30,983 (Cost) = 147% (at first glance, not bad).
- The revenue share of Shopping campaigns (the first campaign from the image above) is 95.05%, and ROAS = 194% (25% higher than the average account). Which means that Shopping campaigns generated a major share of revenue with really high ROAS.
- The rest of the campaigns (Search) performed not well: ROAS = $2,262 (Revenue) / $8,637 (Cost) = 26% (in this case, from every $3 invested in advertising advertiser returned $1).
At first glance, everything doesn’t look crucial, ‘cause if we subtract from total turnover $45,721 – $30,983 = $14,738. But in this case the margin which can be from 15% to 50% depending on the product, isn’t taken into account.
Without margins it’s impossible to calculate final profit and ROMI: and without them it’s impossible to make a conclusion about the account’s effectiveness. That’s why our specialists use The Panda ppc micro management software.
This software allows you to add margins to your products and calculate the actual profit or loss for each product and common numbers for the campaign. Based on this data The Panda calculates the Target CPC for every product.
As you can see on the image:
- total profit / loss is -$6,782 (which means that Google Shopping loss is $2,260 per month);
- ROMI is -31%.
This data shows not only obvious losses of client’s store in Google Search, but also in Google Shopping.
Based on all of this and on the accumulated data in account, we created a new strategy:
- To split items into the Alpha and Beta campaign for more flexible management.
- To add remarketing campaigns + RLSA.
- To expand the negative keyword list.
- To set lower bids for products with low ROI and high loss.
- To increase bids for products with high ROI and high Profit.
- To disable search campaigns till we reach positive ROI in Google Shopping.
- To ensure consistent scaling of the account.
After realization of this new strategy we got next results:
Results according to Google Analytics:
- total ROAS for 3 months of work is $69,414 (Revenue) / $19,221 (Cost) = 361%;
- the revenue share of the Shopping campaigns (the first 4 campaign at the image) is 84%, ROAS = 381% (10% higher than the average for the account);
- other campaigns (Search + Remarketing) showed ROAS = $10,227 (Revenue) / $2,837 (Loss) = 358%.
The results that we have are much better than before. In addition to positive change in Google Analytics, we obtained good ROMI and net profit:
As you can see on the image:
- total Profit/loss is $8,705 which means that Shopping’s profit was $2,901 per month;
- ROMI is 54%.
These results allowed our client to make profit with the help of Google Ads advertising.
We achieved positive results due to:
- The correct strategy based on the principle of achieving a positive ROMI → then scaling.
- Competent micro-management thanks to the software that we use.
- Focus on the growth of ROMI and net profit.