Case Study: Generating 8.5X ROAS Through Performance Marketing

Introduction

In this case study, we will explore how our team successfully propelled a furniture e-commerce business to new heights through strategic digital advertising.

The primary goal was to scale the advertising budget to $75k to $100k per month while achieving a 3.5 – 4x return on ad spend (ROAS). The client also aimed to secure prime positions on Google for their most popular furniture items, competing with industry giants, and ensuring consistent month-on-month revenue growth.

Sales growth through performance marketing.

Challenges

Upon taking over both Google Ads and Facebook Ads accounts, we encountered three key challenges:

  1. Low Conversion Rate: The client was already investing in advertising, with $40k spent on Google Ads and $2.5k on Facebook Ads in May 2020. Our goal was to improve the website’s conversion rate.
  2. Intense Competition: Competing with industry giants like WayFair, Home Depot, and Walmart, who offered similar products, posed a significant challenge. Our objective was to outcompete these heavyweights for all major product categories.
  3. Building Trust and Social Proof: The client’s store was relatively new, having launched in 2018. Establishing a trustworthy brand and rapidly increasing social proof through reviews and testimonials were essential.

The Strategy

To address these challenges, we implemented a comprehensive digital advertising strategy:

1. Funnel Approach: We divided our strategy into top, middle, and bottom of the funnel tactics, with a strong focus on Google Ads. This included Shopping Ads, Google Merchant Center management, and leveraging free Google listings.

2. Product-Level Campaigns: We analyzed competitors’ ad presentation and landing page styles to craft a product-level campaign strategy for Google Ads. This approach enhanced product visibility and allowed us to better understand buyer intent. We continually optimized negative keywords and bid adjustments to maintain optimal ad positions.

3. Supplemental Feed Optimization: By optimizing the supplemental feed through Google’s Merchant Center, we improved quality scores and reduced CPC. This allowed us to tap into free Google listings, driving organic traffic and enhancing algorithmic understanding of our products.

4. Facebook Advertising: We gradually increased our Facebook Ads budget to $10,000 while focusing on warm and hot audiences. Our approach included:

  • Effective Retargeting: We implemented retargeting for potential buyers further down the funnel to generate conversions.
  • Cold Sales with Facebook Interest Audiences: We used Facebook interest audiences to increase cold sales, achieving a 9x ROAS. After mastering retargeting, we expanded to top-of-funnel cold/prospecting campaigns, achieving a high ROAS of 14x (pre-iOS 14.5) and 8-10x (post-iOS 14.5).

5. Creative and Sales Strategies: Our success was bolstered by an array of creatives and sales strategies:

  • Diverse Creatives: We tested various creative types, with high-quality static images, lifestyle shots, and user-generated content proving highly effective.
  • Holiday and End-of-Month Sales: We implemented monthly promotions, an End of Month sale with a 10% discount, and a Black Friday Cyber Monday (BFCM) promotion offering a 20% discount sitewide. Incentivized discounts for basket values over $1,500 also saw impressive results.
  • Ad Copy Optimization: We fine-tuned ad copies to align with our holiday and end-of-month sales strategies, emphasizing key product benefits such as free returns, reviews, and free delivery.

Results

Through these strategies, we achieved remarkable results for our client:

  • Annual revenue increased from $1 million to over $10 million within 16 months, demonstrating the power of effective digital advertising and strategic optimization. The client’s initial goal of a 3.5 – 4x ROAS evolved into an impressive 8-8.5x ROAS, and we continue to explore new avenues for growth, including expanding into other paid media channels.

In conclusion, our case study illustrates the transformative potential of a well-executed digital advertising strategy, even in highly competitive markets. By understanding the nuances of each platform, leveraging supplemental feeds, and adapting to industry changes, we propelled our client’s e-commerce business to new heights, showcasing the incredible power of strategic digital marketing.

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