How we tried and failed to teach advertising with 1029% ROI
“Running a business without ads is like winking at girls in total darkness.” Stuart Henderson Britt
Zenith projects that the cost of advertising on the Internet will amount to more than 52% of the total advertising budget of companies by 2021. In 2019 spending on digital marketing in the world reached 47%. This is a sure sign that business is growing up and starting to understand the importance of advertising for growth and increased profits. But this does not happen to everyone on the market.
What came to us
At the end of 2018 the head of an e-store selling electric and pneumatic tools contacted us. It should be noted right away that in this case the business owner was like Shiva with six arms – he carried out all the business processes in the company. This may initially seem like an advantage, since all information comes to the same place. But only at first glance…
The task was quite simple – to audit the company’s advertising campaigns.
As a result of the audit, the following problems were identified:
- Critical errors in the semantic kernel (lists of negative keywords, cross-negative keywords, lack of keyword queries, exact correspondence – where not needed, lack of actualization of the semantic kernel). All this wasted about 30% of the advertising budget.
- Significant gaps in the structure, configuration and maintenance of the advertising account, which as a result wasted another 35%.
- Parts of the necessary advertising campaigns were disabled, which indicated optimization towards last clickers without taking into account the associated conversions that could bring sufficient profit.
- Serious gaps in ad extensions that significantly reduced performance, read – profitability.
- Poor ad caption in terms of sales that showed very low CTR.
- Errors in setting up the feed and Google Shopping campaigns.
Logically, we were then asked to eliminate all the problems and gaps in advertising campaigns in order to increase profits.
But there were a number of severe limitations, which made the job torture.
Sometimes breaking up is a good idea
Our predecessor, an advertising agency, had bound the client hand and foot from the very beginning of their relationship. The responsibilities of the past provider included both creation and maintenance of the website, and management of advertising campaigns. Of course, disappearance of some of the work did not make them very happy. They either did not react to our comments about the website, or they raised the price of work, or did half-fast jobs. At the same time, access to the website itself was denied specially for us (even though we ourselves could and would have liked to make the necessary changes).
In addition, the client himself was very cautious (even overwhelmingly cautious) about advertising channels in general. With all the possibilities of the niche, the launch of video and banner advertising was quite logical. But the budget was not entirely going to these other channels.
As a result, both we and the client were stuck, not able to introduce improvements from both the technical and the financial point of view.
It would seem to make sense that picking up new digital agencies should involve a break with the previous partners. But all we heard was can’ts (or wont’s). The website was still maintained by the previous contractors, and many work went through their programmers alone. We should have taken note then, but we pressed forward.
The second phase of the “fight with the windmills”
After the audit, we performed a number of works to improve the performance of AC:
- Conducted analysis of key competitors.
- Identified priority categories for advertising with maximum profit.
- Compiled a strategy and tactics for introducing new AC.
- Prepared a plan to eliminate critical errors.
Under the restrictions that were imposed on us, the work could have been done in a month stretched over several. Despite this, we showed really good results in the niche, and for the product as a whole as well:
An impressive indicator, right?
A play ought to have three acts
Although the results of the first two stages of the relationship worried us, we hoped against hope that the situation with the “offended” predecessors would finally change, the client would be amazed at the results, and at last trust us.
We were told to keep the sale price within no more than $8. To do this, we performed website optimization and set up targeted advertising.
For internal and external optimization, we did the following:
- Compiled meta tags for new pages, and modified them for old ones.
- Tried to develop a whole new link profile.
- Fixed all errors that prevented website indexing.
- Eliminated duplicates, 301 and 302 errors on the pages.
- Built a new site map, etc.
Even taking into account all the barriers and elbow jabs from the side of the previous advertising agency, we managed to increase the number of website users more than fourfold, from 56 to 240 per day thanks to SEO (in the average price niche of a complex product). For half a year of work this amounted to:
Due to the cheapness of targeted advertising on social networks, we were able to go into that channel from scratch: Instagram and Facebook are exactly the website where our solvent audience is concentrated.
And, despite on-and-off funding, we fully customized promotional ads, product-wise remarketing, category advertising.
The result was a transaction price of $2.8 in remarketing and $5.27 in targeted advertising. The return on investment for social networks for 9 months amounted to 1100% (for 1 dollar of investments, we received 12 dollars of profit).
But the feedback from the client stubbornly stated that sales still fell short of competitors’. The explanation that we still did not have a YouTube channel and the advertising budget was at least 2 times lower than theirs fell on deaf ears. Rather than strive for perfection in such conditions, we declined further work.
“Only mint can make money without advertising.” Thomas Macaulay
This situation is an example of something like a suitcase without a handle. While indicators were constantly, steadily growing during the year, and with a limited budget, the return on advertising costs was more than 400%, those people should have made a decision. The decision whether to listen to experts or hold on to the old mechanisms.
If you want to get cost-effective advertising campaigns:
- Handle all marketing channels.
- Manage your advertising budget.
- Analyze and compare ALL indicators with the competitors.
Want to achieve high performance even with limited funding for advertising? Ready for sales growth? Seek advice from world-class digital marketing experts and get stunning results in a month!