So you’re running an ecommerce store through your online business. You’re probably also running paid ads – it’s only natural, as paid digital advertising is one of the best routes for bringing in quick and immediate sales.
However, you’re also not seeing the Return on Ad Spend (ROAS) that you were hoping – and maybe even spending more on ads than you’re bringing in.
This is a remarkably common story for online businesses – especially if you’re not an expert at digital marketing or having had the chance to invest a lot of time optimizing your strategies lately.
While not everyone becomes a marketing maestro overnight, here are a couple of areas to look into first diagnosing your campaigns and then maximizing your ROAS if you’re not seeing the performance you want.
1. Review Your Product Catalog
One the most common issues we see when auditing ecommerce stores is the inventory – and, in particular, the size of the inventory.
More often than not, it’s simply too much – too many products, too many varieties, and not enough of them turning a profit.
In cases like this, we suggest two courses of action:
- Narrowing the offerings for the short term (such as hiding low sellers and ensuring there are no distractions to the big sellers). We get that it’s not possible for all stores to do this, but hiding a few weak products (especially those that get a lot of clicks and no sales) could help stream your visitors to the more efficient ones.
- Reducing the scope of the attached advertising campaigns. It’s pretty common for sellers to try and list and promote all items, but again, not all bring in equal returns. Trim the fat of your digital inventory and only put ad dollars on the individual ones bringing a strong ROAS.
If you’re not sure where to begin, consider reviewing your data to find your historical bestsellers, most pressing turnovers, and even if your new listings tend to see any sales boosts (if they do, new items might be worth promoting too even without historical data).
2. Understand Your Seasonality
A lot of businesses are affected by seasonality – and not just shops that sell items like beach towels or snow shoes. Even products as mundane as wine glasses and dinner sets see some seasonality in purchasing behaviour.
It’s good to remember that most industries have peaks and valleys in demand a couple of times over the course of the year. The key, then, is to understand what yours are.
If you’ve been advertising for over a year, you don’t need to do a deep dive into market research. You most likely already have the data to inform you.
Take stock of your ad metrics:
- First, see if there were patterns in purchasing (was there a peak around the back to school season, or certain holidays?). These could be strong clues about what your seasonality looks like.
- Then, check lesser used metrics like clicks and impressions. If you see big bursts of impressions at certain periods, there’s a good sign more people are searching for your products, and that maybe next time that period comes around you should be more aggressive with your ads.
Ultimately, understanding your seasonality helps you sell the right product to the right customer at the right time.
3. Find the Critical Times of Day / Week
Advertising platforms like Google Ads give us some control over not only where and how our ads are displayed, but also when. In many cases, there are peak hours in the day, or days in the week, when sales are more likely to happen.
Of course, some products will have buyers shopping at any time – and if your ROAS are good, it’s probably best to keep them up all day not to miss sales. However, when your ads are in a bad place it’s time to take stock of what your data says about specific hours or days.
For instance, if you run a business that is in some way food and beverage related, you might notice that there’s an uptick in interest right before and during lunch time every day.
That’s one easy example, but even just diving into your data might reveal interesting differences – such as times of day that cost more per click but provide fewer sales!
Then there’s also the mid-week slump. Mondays and Tuesdays are often hectic but come Wednesday, a lot of people see their productivity drop off and are more inclined to do a little browsing.
Consider closing up your ads on the slow days and focus your budgets on the best ones.
Are you running an ecommerce business online and having issues generating a return on ad spend (ROAS) that justifies your investment in digital advertising?
Acorn is a boutique agency with over 20 years of digital marketing experience, particularly within ecommerce and maximizing the ROAS of businesses just like yours.
If you’re looking for collaborators who can take your business to the next level, drop us a message using our contact form. You won’t regret it.
