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Retailer Achieves 348% ROI with Revenue Optimization [Case Study]

retailer_facebook_ad

A leading retailer recently ran a customer acquisition campaign which significantly increased incremental sales by leveraging Facebook Page Post ads in the News Feed and Nanigans’ optimization algorithms. The results highlight how critical revenue-based optimization is when running a Facebook performance advertising campaign

The retailer’s Facebook advertising campaign delivered 6x more in sales revenue when optimized for revenue rather than CPA-based bidding. 

Goal

The retailer’s goal was to find and acquire customers on Facebook to drive incremental sales during the spring shopping season.  The retailer shifted its advertising spend from CPA-based bidding to revenue-based optimization to generate a positive ROI and reach their goal. The objective was to draw the most valuable new members to the site from the perspective of lifetime value and return on ad spend, while maintaining a low cost per registration.

Strategy & Approach

The retailer leveraged native Facebook API targeting, custom audiences, Facebook Exchange, Page Post News Feed ads and a variety of creative elements and Ad Engine’s ROI optimization algorithms.

Targeting

The campaign run through Nanigans’ Ad Engine platform targeted customers by demographics and keyword sets, excluding fans who had already liked the page.  To reach their audience of fashion-savvy consumers, they targeted keyword terms associated with upscale retail brands, as well as relatable eCommerce sites, that would most likely reach people interested in their featured products.

Creative

To maximize the efficiency of ad types available on Facebook, the retailer leveraged Photo Page Post ads, which appear in users’ News Feeds. The retailer tested several unique creatives for each ad type featuring a variety of titles, bodies and images.  The best performing ads often highlighted a specific product from a “same day’s sale,” with a strong focus on creative imagery.  In addition, multivariate ad testing across messaging and imagery ensured that only the strongest creatives were being rotated.

Optimization

The retailer leveraged Nanigans CPC and oCPM bidding algorithms (based on real-time purchase and cost data) in order to optimize solely on “lifetime value ROI” at the audience-segment level.

Results

While CPA based bidding generated an average of 54% return on ad spend after only 3 weeks, Nanigans’ revenue based bidding algorithm delivered 6x the return at 348%.  By bidding and optimizing for true ROI as opposed to CPA, the retailer allocated their marketing dollars more efficiently by quickly identifying profitable customers  – those who generated more purchase revenue over the long-term than the cost to acquire them.

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