Google Ads E-commerce Case Study: 5X Higher ROI in Less than 6 Months

This is quite an interesting case study we’re excited to share. A prospect came to us with the goal of multiplying the revenue of their E-commerce store by five in less than a year without spending more on ads. 

It was a big challenge I’m proud we have beaten. And I’m even more excited that we were able to do it in half the time, six months instead of a year.

About the Client

This is a musical instrument store operating in the US. They already spent around $15K a month on Google Ads, barely breaking even in revenue, meaning they lost money with every sale they made. 

It’s not unusual to lose a bit when E-commerce stores just start with online advertising, but in this case, it was more than a bit, and there was no sign of improvement.

Day One

We started by analyzing the account. We wanted to understand which products we spend our budget on and which products actually make the client more profit rather than just revenue.

We were able to double the profits overnight just by focusing on the quick wins and reallocating the budget.

Doubling, though, wasn’t enough. In order to break even we needed to generate about 3.5X of our ad spend in sales. It slightly varied between different categories, but the vast majority were in this range.

We decided to start from scratch but to utilize the data already acquired by the old campaigns.

Tracking Set-Up

Making sure that tracking is set up correctly is a vital yet often, overlooked part of the account setup. 

Although the basic tracking worked accurately, we wanted to add an additional view-only conversion that tracks the profit from each product sold. In that conversion goal, 100% ROAS meant breaking even.

It was important to set it up because each product has its own profit margin, and we wanted to take advantage of products that are easier to sell while still having higher than average profit per unit sold. We also used that conversion to tweak keywords, ads, and bids manually.

The Plan

We knew that in order to reach our 5X profit goal and be able to scale up, we’d have to divide and conquer. We divided all the products they sell into categories, and sorted the categories by a combination of search volume and the store’s profit margin.

Apart from setting up the obvious shopping campaign, each category got its own set of campaigns: Search, YouTube, remarketing, and GDN. 

Instead of going broad and narrowing down, we decided to “re-educate” Google’s algorithm for our new, real conversion goal: 500% return on ad spend. 

We came up with a plan that had two phases. First, we launched search and remarketing, then, after reaching the initial ROI goal and keeping it for a few weeks, extended our reach with video and display campaigns, taking advantage of Google’s conversion algorithm we trained by hitting the profit target.

Phase One: High ROI As Fast As Possible

The first goal was to stop our burn rate, and improve the client's cash flow.

Search Campaigns

Search was the first type of campaign we set up because it allowed us to have surgical control of bids and targeting. Researching keywords manually gave us the advantage in many of the auctions, allowing us to create hyper relevant ads for every search query we appeared on.

Remarketing

A dynamic remarketing campaign is a must in most cases where we need to bring sales to e-commerce stores, and this case wasn’t different. But in addition to it, we manually created audiences for each category of products, planning to drive hyper relevant traffic straight to the most relevant category pages. We made sure the users from this campaign saw products that were both top-selling and had high profit margins.

Phase Two: Scaling Up

Now, that the client was profitable, we were able to start scaling up.

YouTube

YouTube is a placement that is a rare combination of extremely wide reach, yet, being owned by Google, it has extremely accurate targeting abilities.

We created lists of channels in each category and directed these users to the relevant category on the site. This sort of setup is a bit tedious to set up, but the results are worth the effort.

GDN

The last sets of campaigns we launched were targeting much broader audiences of users.

We created custom audiences using keywords and search terms from the search campaigns and the URLs of the top 10 organic results for each of the used keywords. We started slow without allowing Google to target users outside our target audiences. 

Gradually, we set the extended reach, counting on the firm tROAS goal to limit irrelevant and unwanted clicks.

The Results

The setup process took two months, during which we broke even and showed signs of profitability at the scale we wanted to reach. We kept tweaking and optimizing daily to improve the profitability without limiting the scale. 

Getting such results is not unheard of, but it requires a lot of cooperation from the client. It’s always great to see a client grow this fast with highly profitable campaigns, and we’re already working on another plan to expand further.