The retailer’s goal was to reach people on Facebook already familiar with their brand to drive incremental sales during holiday shopping season. The retailer aimed to spend its advertising budget to reach this goal in a way that generated positive ROI.
The retailer leveraged custom audience targeting, a variety of creative elements, and Ad Engine’s ROI optimization algorithms.
Targeting: A member’s only site, the retailer created two custom audiences to remarket to based on email addresses in their CRM database. These included:
- Repeat customers who purchase frequently
- Registered members who have never purchased
These custom audiences had shown previous intent and affinity for the retailer, and thus had a high likelihood of converting through the remarketing campaign. These custom audiences were further segmented by age and gender.
Creative: The retailer tested 200+ unique creatives with a variety of title, body and image elements. Images ranged from seasonal holiday items to product images in line with best performing creative in prior campaigns. No offers or discounts were used in the creative.
Bidding & Optimization: By leveraging Ad Engine’s ROI optimization algorithms, bidding adjusted automatically based on real-time purchase and cost data in order to maximize ROI at the audience level.
Cohort Analysis, a tool within Ad Engine, allowed the advertiser to identify trends in their Facebook advertising campaign, generating the graph and table below. Trends included three core benefits of ROI optimization: (1) increased performance over time, (2) same-day 100%+ ROI, consecutive days in a row, and (3) high ROI despite increases in market costs during the holidays.
Increased performance over time: Ad Engine’s ROI optimization algorithms improved the return of the campaign over time, as shown in the graph below. Each line charts the ROI generated by audiences in the seven days after they were targeted, with each color representing different days in which ads were delivered during the campaign.
Audiences targeted in the beginning of the campaign generated just under 500% ROI after seven days (audiences targeted November 26th – 28th; the three lower teal, purple and pink lines). Audiences targeted at the end of the campaign, after Ad Engine’s ROI optimization algorithms incorporated learnings from purchase data, generated over 1,000% ROI (audiences targeted December 3rd – 4th; the two top green and gray lines).
100%+ day 1 ROI, multiple days in a row: With the exception of November 28th, audiences purchased more in revenue in the same day they were targeted than the cost of ad spend to reach them that day. This same-day ROI ranged from 79.13% to 438.02%, as shown by the Day 1 ROI from revenue outlined in red in the Cohort Analysis table below.
Higher ROI despite high costs: Nanigans’ ROI optimization provided benefits in addition to increasing campaign performance over time. Bidding based on expected ROI allowed the retailer to continue to bid high enough to reach its highest value and most profitable customers, all despite dramatic increases in market costs due to increased demand and limited supply of ad inventory during holiday shopping season. For example, the December 4th cohort outlined in blue above had the highest CPCs of the campaign at $1.10 and generated the highest Day 1 ROI of 438.02% as well as the highest 7-day ROI of 1,080.23%. Had the advertiser only been willing to bid and optimize toward a target CPC or CPA that was lower than $1.10 (or other high-cost days), it would have missed out on tens of thousands of dollars in incremental revenue.
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