Case Study: Return on Ad Spend Optimization

Hey, everybody, this is Adam Arkfeld with ParaCore, and in today’s video, I’m gonna go over the return on ad spend bidding optimization in the AdWords account. There a lotta different ways to optimize your bidding, you’ve got maximize clicks, maximize conversions, target return on ad spend, that’s one we’re gonna be looking at today. We did a short case study, an example of a test that we did, and so, I’m gonna show you how it worked and what the results were, a return on ad spend strategy, okay?

So, here’s a campaign that we’re running, it’s a shopping campaign. I’m just showing you three of the different campaigns in this shopping campaign, and I’m comparing August 1st through 20th to September 1st through 20th. And as you can see, here we have, on August 1st through 20th, we had 11,000 clicks, and that decreased, actually, to 7,000. So, the number of clicks went down 36%. What that also means is that the ad spend went down $471. So, the ad spend went down 29%, ‘kay?

So, we only spend somewhere between, maybe around $3,000 a month in this campaign. This is gonna be a little bit less, actually. But it went from 1600 to 1157. Alright, so, we saw a couple different things from, here’s the August conversion value, so we have $2900. The All Other Products category actually went down to 1400, so we lost 51% of conversion value, so that’s not great. 290 to 1239, so that went up 327%. And then here, we saw 1254 increase to 2789. So, overall, we saw a change of 21% in our return on ad spend. We went from $4500 to $5500, with a budget decrease of $471. So, what you can see here is that it’s not necessarily a definitive result from this test.

We have an example of it increasing 327%, this one went up 122%, this one went down 50%. And because this was a high-converting campaign in August, this really impacted, the net change was negative 1500, so our net change in conversion value was $974. That was a 21% increase in conversion value, not return on ad spend. So, we see here, in return on ad spend, is this return on ad spend went from 640, which was particularly high, down to 330, which is not necessarily good, by the standards of this campaign, but it’s also not terrible. So, we went from 640 to 330. This went from 60% to 530, 182 to 567, so for just these shopping campaigns, the return on ad spend went from 275 to 472, which was an increase in 200%, a net change of 71%, okay?

So, that’s really interesting, I mean the return on ad spend went from 275 to 471, even with this one going from 640 to 330. Now, this just may have been a particularly good month. We’re only looking at a 20-day window. The amount of data is not incredibly large. But it’s worth considering that the return on ad spend went up significantly when we made these adjustments because the number of conversions, I think is really interesting. This, for the All Other Product campaign, the number of conversions went from eight to three, so it went down five and it decreased 62%, which we saw in our conversion value, go down 50%.

But what’s interesting is you have in Football, 17 conversions, that decreased by four to 13 conversions. However, the all conversion value increased 122%, increased by $1500, so fewer conversions, but a higher average conversion value per purchase. And so, I think that’s a really good and a really interesting, a really interesting aspect that is worth, that’s worth considering, is that it’s not, if you’re running a lead gen campaign, you can maximize the number of conversions, that’ll maximize the number of calls and maximize the number of lead forms, which is one way to improve the number of conversions.

But if you’re doing product sales, and you’re well under budget, and you want your ad spend spent where you’re gonna get the highest bang for your buck, return on ad spend, then doing ROAS is a really good strategy to get that. So, this case study, I wouldn’t necessarily say it’s definitive; however, the return on ad spend did increase by 196%, which is a 71% increase, and it went from 275 to 472%. So, that is large, even though we had a pretty negative situation up here. But I think that probably, with some adjustments, maybe you could turn that around. Maybe it’s a seasonal thing, or maybe we do a few more months to see what happens.

So, that’s it, that’s a look at return on ad spend, and how we analyze whether or not that’s working. We’re just doing a strict comparison up here at the top. We’re comparing the 1st through the 20th with a custom comparison to the 1st through 20th of August, and then we can look at those different changes down here and segment it out and look at how they were affected by the return on ad spend change.

So, my name’s Adam, I’m the owner of ParaCore. We’re a pay-per-click lead generation agency. If you like the video, please like it, subscribe to the channel. If you wanna talk PPC, my email’s in the description. Please feel free to reach out any time. We run paid media campaigns for high-growth businesses. So, thank you very much for watching, and I will see you in next video.