This article was contributed by Aden Andrus, writer for Disruptive Advertising, originally published July 2, 2020
You already know that PingPong has your back when it comes to saving money on VAT and FX fees and incredibly simplifying paying suppliers, vendors, and so much more. Our goal is to help eCommerce sellers evolve their businesses into lucrative, scalable operations. Sometimes that involves bringing in partners who are experts in their business to share a new or different perspective, like this article from our friends at Disruptive Advertising.
Read this article if you:
- Spend money on advertising
- want to pinpoint mistakes you might be making
- Like saving money and improving your marketing
At Disruptive Advertising, one of the most common eCommerce marketing mistakes we see is companies wasting too much money on the wrong impressions, clicks, and even products.
The vast majority of ad spend is wasted. An audit of thousands of PPC accounts revealed that the average business wastes 76% of its ad spend on clicks with no real chance of converting. If we hadn’t done the research ourselves, that number would seem almost unbelievably high.
If you think about it, this statistic helps to explain why so many businesses struggle with online advertising. When the majority of ad spend isn’t producing anything of value, it’s hard to believe anyone is making money from online advertising!
Do You Have the Data You Need?
To track down wasted ad spend, you must have effective web tracking in place. That’s exactly the problem that one of our clients was struggling with when they first came to us.
Over the years, they had invested hundreds of thousands of dollars into PPC advertising. Despite that, their campaigns had never been profitable. Astonishingly, they kept at it.
After reviewing their accounts, it quickly became obvious that we first needed to set up accurate tracking before we could do any meaningful optimization. We began tracking every customer action - from click to sale - and then waited for the data to come in.
Once we could see what was going on with their campaigns, it became obvious that their cost per sale was much higher than their average order value. It also became obvious why: a significant amount of their budget was going towards clicks that weren’t turning into sales.
With that information in hand, it was fairly easy to reallocate their budget to their profitable campaigns. The results spoke for themselves.
The cost per sale dropped from almost $90 to just over $25 and sales volume jumped up by 400%. All of a sudden, their PPC campaigns were profitable—for the first time.
Simply by eliminating wasted ad spend, we were able to improve things to the point where they had to expand their operations into a new building. All we had to do was point their budget in the right direction.
One of our favorite ways to eliminate wasted ad spend with Google Ads is to take a hard look at which keywords are converting and which ones aren’t. This is especially useful for paid search campaigns, but it can be handy for Google Shopping campaigns, too. After all, while you can’t tell Google what keywords your product listing ads should rank for, you can tell them which keywords to avoid.
Reviewing the last 6 months of data in your account will give you a feel for how different keywords and search terms are performing for your business. If you’re spending a lot of money on keywords that don’t lead to sales, consider removing them, unless they significantly add value as an upper-funnel keyword.
Waste Not, Want Not
Wasted ad spend isn’t limited solely to unprofitable PPC accounts. Depending on your business, you may be running highly profitable campaigns, and still be wasting a ton of ad spend.
For example, another client came to us because he simply wanted to increase his profits. His campaigns were already running at a 9x return on ad spend, but given some of his other costs, he wasn’t making the kind of money he wanted.
When we audited the account, it quickly became obvious his campaigns had a lot of untapped potential. So, we redirected the budget from underperforming campaign elements to more profitable ones and the results were dramatic.
Not only were we able to cut his monthly ad spend monthly by $1,500, but we also increased profits by tens of thousands of dollars a month. Return on ad spend increased from 9x to 15x.
Again, these massive gains weren’t the result of major changes in strategy. Instead, we were able to generate these results by turning ineffective ad spend into highly-profitable ad spend.
Conclusion
We’ve seen stories like this play out too many times to count. Almost every account we’ve ever worked on has been caught in an uphill battle against wasted ad spend. It’s impressive how fast things can improve once you redirect your ad spend to the right places.
Many businesses waste the majority of their ad spend on impressions and clicks that don’t turn into sales. By thoughtfully looking at your campaign data, you can identify numerous opportunities to redirect wasted ad spend into more profitable campaigns.
To learn more about Disruptive Advertising, click here.
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Aden Andrus, Director of Content Marketing
Over his career, Aden has developed and marketed millions of dollars of successful products. He lays awake at nights figuring out new marketing tactics and is constantly upping Disruptive's internal marketing game. He loves to write, dance and destroy computer monitors in full medieval armor.
