Case Study: How We Produced An 8.5x ROAS for an E-Commerce Client
According to Nielsen, the average return on ad spend (ROAS) for E-Commerce brands is around 287%. This number may sound like an impressive statistic, but after factoring in overhead, this leaves much less room for profit.
This average also indicates that many brands see less than 2.0x return on their ad spend, and only few brands see much more than 4.0x. That being said, with the perfect combination of audience targeting, creative content, and promotional offers, wonderful things can happen.
These results stem best from knowing your ideal audience inside and out, which is what we strive to do for each and every one of our clients. In this article, we’ll dive into how we got one of our E-Commerce clients up to as much as 850% ROAS.
TOC
Problem
Approach
Optimization
Results
Problem
Mark had been running his Facebook Ads for his new book for nearly a month before coming to the conclusion that they would not produce many sales. He had already spent nearly $1,000 in service fees to marketing experts alone trying to get his campaigns set up correctly. Nothing up to this point had worked for him so far.
His campaigns were barely producing a single sale each day, sometimes not even that. Mark was looking to get not only consistent sales, but to get his daily purchases up to 10.
Mark was facing many issues aside from his nearly zero conversions, such as inaccurate tracking metrics, costs that were through-the-roof, and an overwhelming number of abandoned carts.
When Mark came to DM Digital, he was ready for a complete ad campaign makeover.
Approach
We started by analyzing the creative content of Mark’s ads first and foremost. We decided that his creative content would be a good place to start, so we moved onto fixing the tracking metrics and optimizing Mark’s Ads Manager for iOS 14 and value-optimization. Once that was done, we began narrowing in on his ideal audience.
We identified that his book would resonate most with parents that had faced tragedy or showed an active interest in Christianity, so we used Facebook’s targeting parameters to run a search for mothers aged 40+ with interests in Christian books, Christian music, and more.
We correctly assumed that because of the book’s spiritual message, a lot of his ideal customers were religious mothers with older children, so we tailored the message of the ads around how tragic experiences can change a parent’s view of God.
With this micro-niche targeting approach and specific message, we were able to resonate with our ideal customer with a relevant and emotional appeal. Our message was simple: If you have ever wondered why God let something happen, struggled to cope with tragedy, or simply wanted to learn more about how God acts in mysterious ways, this book will guide you through a missionary’s journey to discovering how.
Results
In the first week that Mark’s ads were up, he generated a ROAS of 336%. This had now only skyrocketed him past his previous attempts with other marketing experts but had put him ahead of his own industry average within just 7 days.
Mark was ecstatic about his return and continued to encourage us to test new strategies to see how we could improve his return even more. By week six, we’d gotten his cost per purchase down to an average of just $4.89 - 500% less than his industry’s average of $21.47.
To top it all off, Mark’s average click-through-rate (CTR) across all of his campaigns was a whopping 8.46% in comparison to his industry average of 1.59%. Mark’s ads truly were an industry-defying milestone that showed that with the right strategy and creative content, you can scale a couple thousand dollars of ad spend into tens of thousands of dollars in revenue.
Even we were blown away at just how well Mark’s ads were running, but we weren’t done just yet. After all, what’s the point in promising your clients the best when you settle for just great?
We began implementing retargeting strategies and lookalike audiences, as well as optimizing for conversion value rather than lowest cost. Most importantly, we implemented email campaigns and follow-up campaigns that retargeted abandoned carts, encouraging them to complete their purchase. We even through a limited time offer for a discount their way to incentivize them to buy now.
With this retargeting strategy for abandoned carts alone, we were able to get Mark’s average cost per purchase down to $2.23, which was virtually unheard of by any of us at that time. That put Mark’s average cost per sale at nearly 1,000% less than his industry’s average.
We still didn’t stop there, however - We wanted to see how far we could take this.
We then implemented a new email campaign that retargeted people that had already bought the book, encouraging them to check out Mark’s other reads. We also added his other books to his order confirmation page along with a limited time discount. People began buying not only Mark’s latest book, but the other four books that he had written over his 20+ years serving as a missionary in Africa.
With this new source of revenue, we were able to indirectly increase Mark’s average order value. When it was all said and done, the optimized Facebook Ads, retargeting campaigns, and email campaigns resulted in Mark’s return on ad spend being over 850% of his initial investment.
That means that at peak, Mark’s revenue was 8.5x his ad spend from the traffic and customers generated from his Facebook Ads alone.
As Mark’s audience began to build and accumulate nearly 1,000 new customers, we were able to leverage the data from Facebook to target similar users, retarget a very hot and ready audience, promote different product lines, and not only scale down his costs, but maximize his return through a variety of optimization strategies.
Perhaps the most impressive statistic from this campaign is that Mark’s initial ad spend when working with us was just around $50 - $65 a day. Just a few weeks into his campaign, we were able to successfully scale his ad spend up to around $200 a day since his return was so good.
Mark’s ad campaigns showed us that it was not only possible to scale your ad spend from minimal to impressive, but simultaneously scale down costs and maximize return, while also increasing average order value.
We could have easily decided that a nearly 400% ROAS for Mark’s ads just by leaving them alone was enough, but we did the work to increase his average order value, scale down his costs by targeting better audiences, and leveraged data to optimize his campaigns even further.
The result? Five figures of revenue from less than $3,000 in ad spend the first month, along with thousands of new customers to build his audience from.
Mark’s ads are a prime example that just because Facebook Ads haven’t worked for you in the past, doesn’t mean they can’t work for you and provide massive revenue to your business down the road.
