Client Overview:
Our client, a mid-sized eCommerce business, offers a diverse product catalog with prices ranging from 10 cents to over $1,000. Competing with industry giants like Amazon and large retailers posed a significant challenge. Our goal was to help the client scale profitably while navigating this complex landscape.
Challenge:
The primary challenges were:
Auction Pressure: The client faced tough competition in auctions against major retailers.
Revenue Range Complexity: Products with wide price variations often led to skewed campaign performance, with lower-value products struggling to gain visibility.
The industry-wide shift to Performance Max (PMAX) campaigns compounded these challenges. The forced transition to PMAX required a rethink of how to best manage their catalog for optimized performance across price points.
Our Approach:
At the heart of our strategy was a data-driven approach, combining our deep expertise in campaign management with the powerful automation tools offered by Google. Our specific actions included:
PMAX Transition Management: The forced move to PMAX was an opportunity to restructure campaigns. We consolidated the product catalog to allow for more effective AI learning and campaign scaling. This allowed us to stay competitive with large retailers while smoothly adapting to the PMAX shift.
Optimization with Offline Conversion Tracking (OCT) & Profit-Focused Metrics: By utilizing OCT and optimizing to conversion value (rather than treating all conversions as equal value) with profit as the core metric, we shifted the campaign’s focus from pure revenue generation to maximizing profitability. This approach empowered Google’s AI to distribute exposure across the product catalog, including lower-revenue items that are often overlooked in revenue-based optimization models.
Network & Backend Data Integration: Utilizing our proprietary tools that combine network data with backend analytics, we ensured that the campaigns were profitable and contributed to long-term growth. This integration gave us a granular view of product performance, helping us regularly fine-tune the campaigns and ensure consistent improvement.
Results:
The result was a substantial increase in both post-marketing gross profit (PMGP) and profit return on ad spend (PROAS):
Key Insights:
Improved PMGP: Post-Marketing Gross Profit increased by 99% from 2023 to 2024, showing how optimizing to profit, combined with our optimization approach, delivered tangible results.
PROAS Growth: Profit Return on Ad Spend (PROAS) experienced an impressive increase from 120% to 244% after the transition. Unlike traditional ROAS, which measures return based on revenue, PROAS focuses on profit, providing a more accurate picture of the true financial impact and effectiveness of profit-driven campaign strategies.
Diversified Product Portfolio: By optimizing for profit rather than just revenue, we successfully diversified the client’s product portfolio. Our approach increased exposure to smaller-volume, lower-revenue products, allowing them to contribute more significantly to the overall business performance. This led to a more balanced distribution of ad spending across the entire catalog rather than concentrating only on high-ticket items.
Supporting this shift:
71% of the top 1% of products were newly introduced into the top-performing segment after the optimization, meaning products that previously had little visibility became key contributors.
93% of the top 10% of products were also newly introduced into the top tier, further highlighting the success of a diversified product approach.
This diversification created a more resilient, profitable campaign structure, allowing the business to scale sustainably across a wide range of products.
Conclusion:
The forced shift to PMAX might have posed challenges, but through strategic campaign management, a data-first approach, and profit-centered optimization, we were able to deliver significant results for our client. By transitioning seamlessly to PMAX and using advanced profit-based metrics, we unlocked growth opportunities for the entire product catalog, not just high-revenue items.
This case study showcases how our team’s expertise in campaign management and optimization ensures eCommerce businesses not only stay competitive but thrive—even in highly competitive auction environments.
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