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From $70k drop to $30k revenue increase YoY within the first month

Author

George Reid
December 15, 2023

This case study is another example of how effective PPC optimization can significantly impact growth. With the right strategies, it's possible to witness immediate growth within the very first month. Let's explore this in greater detail: 

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We began managing this account in October, aiming to scale it profitably and transform the year-over-year (YoY) declines into gains, all while maintaining profitability.

Let’s start with the brief overview of the results we've achieved:

Amazon PPC

Before:

Before we started managing the account in Oct, the brand was experiencing a year-over-year (YoY) decline in both PPC and overall revenue. Below is a screenshot comparing the revenue of September 2022 with September 2023:

After:

We took over the account on October 5, 2023, and successfully reversed the year-over-year (YoY) decline within the first month. Where there was previously an avg. 30% dip in PPC revenue, we achieved a 16% growth in PPC revenue in October and 25% in November. In terms of numbers, we went from avg. monthly YoY drop of $53k, to avg. monthly YoY increase $23k and $39k in Oct and Nov respectively this year. Importantly, we also managed to reduce the Advertising Cost of Sales (ACOS) slightly from 35% to 33.6%.

The following screenshots illustrate the comparative PPC results for 2022 versus 2023:

Oct 2022 vs Oct 2023

October 2022

October 2023

Nov 2022 vs Nov 2023

November 2022

November 2023

Screenshot taken on Dec 14, 2023

Overall Performance

The improved PPC performance also led to an overall account growth. The account witnessed:

  • A 54% increase in Ad impressions Month-over-Month

  • A 5% increase in overall page views

  • A 40% growth in unique customer acquisition, and

  • A 56% growth in repeat sales, the compounding effect of which will be continually seen in the long run.

By bringing the right traffic through, we significantly improved the account's overall visibility and performance.

At an overall level, the YoY sales shifted from an average decrease of $69K to a consistent increase of $30K in both October and November. This achievement came with a 3% and 4% rise in Total Advertising Cost of Sales (TACOS), yet we successfully kept it below our 15% profitability target.

Moreover, the increased brand awareness has not only improved product rankings but also set the stage for continued growth in organic sales.

How did we do it?

Individual Product Focus

We started with a thorough analysis of the products and campaigns setup to understand individual products’ performance and potential. Our investigation revealed several missed opportunities. Benchmarking tests showed that the brand was capturing only 10% of the market share, and ad reports indicated insufficient capture of ad impressions from high-converting traffic. To address this, we employed product-focused strategies to boost individual product performance and fuel scalable growth.

Campaign Structure

The next phase involved establishing a robust campaign structure tailored to implement product-level strategies effectively. Our goal was to scale up efficiently while achieving a higher return on investment (ROI).

We created separate campaigns for each product, further dividing them by:

  • Target groups: ranging from generic to highly relevant.

  • Target density: maintaining less than 20 keywords or product targets per campaign to maximize exposure.

  • Match type: utilizing Broad and/or Broad Modifier, Phrase, or Exact match types.

This approach enabled us to manage bids more effectively and allocate budgets strategically, improving control, and gaining granular data for informed decision-making.

Making data-led decisions

Utilizing Ad reports, we identified high-performing targets for focused campaigns and spotted non-performing, unrelated targets (primarily from auto and broad targeted campaigns) for negatives. This minimized wasteful spending.

The ad reports formed the foundation for our new campaign setups. Additionally, we established harvesting campaigns for ongoing keyword research, further enhancing our data-driven approach.

We also conducted thorough market research for each product category to understand competition. We identified key competitors and implemented offensive targeting strategies. By focusing on products where we had a competitive edge, we effectively captured more market share.

Ad types and budget allocation

We found that the Sponsored Products (SP) Ad type yielded the highest ROI for the brands, a trend generally observed with SP campaigns. We primarily looked at maximizing exposure through SP campaigns to boost product page traffic and ROI.

We allocated 98% of the total ad spend to SP campaigns.

We dedicated 2% of the budget to experimenting and scaling with Sponsored Display (SD) campaigns.

While we haven't utilized Sponsored Brands (SB) and SB video campaigns due to ongoing creative and Storefront revamps, they are part of our upcoming strategy. We also plan to increase our investment in Sponsored Display campaigns.

Optimisations and Fine-tuning

We performed ongoing optimisation on a regular basis to fine-tune and optimise our Ad campaigns, as well as set up new campaigns based on new data collected. Regular optimisations also helped us stay on top of the changing trends on the dynamic platform of Amazon. At a high level, that includes:

  • Regular Bid Optimization: We updated bids every 3-7 days to maximize ROI and reach.

  • Keywords Funnel: We maintained an ongoing flow of keywords from research to ranking.

  • Negative Targeting: Particularly for broad, phrase, and auto campaigns, we routinely identified and negated unrelated keywords to prevent spend leakage.

  • We maintained a balance in Bid and Budget Management. To ensure campaigns remain within budget without going overboard (OOB), we also utilized budget rules alongside manual adjustments for optimal effectiveness.

Forecasting and regular adjustments

We regularly looked at what happened last year to anticipate any upcoming changes, especially during big shopping events like Black Friday and Cyber Monday. While we also kept an eye on what's happening now, so we could adjust our plans based on what worked before and what's working now.

Leveraging features and updates

We always keep up with the latest updates and used those levers.

We essentially leveraged :

  • Contextual Targeting: finding the right people to show our ads to, based on what they're interested in.

  • Retargeting: Showing ads to people who have seen our products before but didn't buy anything.

  • Brand Analytics Tools: Like the search query dashboard, Customer loyalty dashboard, brand metrics, and category insights, which give us more information to make better decisions.

By staying up-to-date and using these new tools, we're able to change our strategies effectively and stay ahead in the game.

Thanks,

Himanshu

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