One frustrating thing for most of our clients is the disconnect between all the information out there on YouTube and Google, and actually applying this to your account and running your paid media campaigns. You may find yourself asking “what is the natural progression of events to get me to the right next step?”
Well today, we are bringing you another client data set and we are going to discuss what the story is with their data and what we did about it. Follow along!
Note: To see the live changes and get a more immersive experience, we recommend checking this out on our YouTube video and reading along!
We will be going step by step into what we, the media buyers, would take as the next step when presented with client data.
Step 1: Put the Data into Our Funnel Optimizer Tracker
First, we would gather all the relevant data, which can be downloaded from Facebook, and add it into our Funnel Tracking Optimizer (shoot us a message) and we can send it to you to use!). We had been working with this client for 2-2.5 weeks so we took data from March 4th to March 10th.
Up until we took over, their account had learned incorrectly. They had not been running Traffic campaigns or Lookalikes. So we recalibrated the account so that it could start relearning. After a little bit of relearning, we thought it was ready to take some action and try to increase the performance.
Note: You can download your data by going into your Ads Manager and going into the “Columns” > “Performance and Clicks Default”. To customize it a bit how we did, you can add in the “Ecommerce Funnel”.
These customizations add in the following metrics: Website Purchases Conversion Value, Website Purchase ROAS, Landing Page Views, Cost Per Landing Page View, Content Views, Cost per Content View (synonymous with product page), Checkouts Initiated, and Cost per Checkout Initiated.
Once that’s added into the Funnel Optimizer Tracker, we can begin. We have built-in formulas on our sheet, but feel free to make your own or message us for this exact template!
Step 2: Analyze the Metrics
After we put the data in a nice digestible format, we could thoroughly analyze each metric and see how they correlated with each other. Below are some of our findings:
- Average Order Value is low. $35 is usually not good enough. Values like $50, $60, $70 are good order values.
- CTR (Click-through Rate) at .95% is rather low
- Conversion Rate is a good middle ground at 4%
- ROAS at 1.15X is below the goal (*2X)
- ATC (Add-to-Cart) rate at 10% is low, especially due to their order value being low
Note: This client had 2 products and one was out of stock so this most likely affected the Conversion Rate.
So how do we get the ROAS up to 2X? See step 3!
Step 3: Play!
Let’s walk through how we decided to play around with the numbers:
- Change Average Order Value to $50 (perhaps through product bundling) instead of $35 and the ROAS changes from 1.15 to 1.67. Many people default to arbitrarily increasing order value as the sole method to increasing ROAS, but it’s good to know exactly what you are changing.
- Change Average Order Value to $60 (just to see) instead of $50 and the ROAS changes from 1.67 to 2.01. This means the order value would have to double.
Changing Average Order Value may require more work on the client to bundle products, package, and ship. This could also mean more work for the Media Buyer.
- Change CTR from .95% to 1.2% and the ROAS goes up to 1.44X.
- Change CTR from 1.2% to 1.5% and the ROAS goes up to 1.80X.
Changing the CTR, however, can be easier with new creatives. Facebook has great templates as references to get good and attractive ads running. Photoshop and YouTube are your friends! The CTR is completely in your control.
- Change Conversion Rate from 4% to 5% (hypothetically speaking that the client’s out-of-stock product comes back in stock), with a 1.2% CTR, and this makes ROAS goes up from 1.44X to 2.26X.
- Change Conversion Rate from 5% to 4.5%, adjust CTR to 1.3%, and adjust Average Order Value from $34.25 to $40 (for a more realistic view) and this makes ROAS is 2.05X.
The second option makes the work a bit more manageable for both the advertiser and the client by increasing the Average Order Value by a small amount, decreasing the conversion a little, and also increasing the CTR slightly.
Overall, getting the Conversion Rate up by 25% has the same effect as getting the CTR up by 50%. Conversion Rate may not always be the most powerful, sometimes adjusting smaller metrics can help make a huge impact, and they can also be easier.
Did this help? Let us know in the comments!