The client set up and ran a sales campaign in Google Shopping for 6 months and implemented the strategy of maximizing clicks at the lowest price. Only the cost of advertising and the number of purchases through the shopping cart were known to our client, but the ROAS remained un-clear. This took place because a lot of goals that were unimportant for the business were set up in Ads Manager: viewing the contact page, put-in-the-shopping-cart actions which hindered the efficiency analysis in the account and were uninformative. It lacked the most important part – the tracking of calls and processed or already paid orders.
A month later, it became obvious that the current return on investment was 462% in sales cam-paigns and 100% in media campaigns — which meant that the store's revenue was approxi-mately equal to the cost of advertising.
These activities provided the automatic bid management algorithm with correct statistical data and this was the key factor of its proper functioning.
By June, the revenue was 24.5%, advertising costs decreased by 10%, and the ROAS in-creased from 479% in early April to 659% in early June:
We also noticed that the sales numbers of the store depended on external factors and the prod-uct range stability, so we compared two-week or monthly intervals. The chart shows the drop in all indicators on the day of the beginning of the riots in the United States on May 26, 2020 after the death of George Floyd:
Working on the project, we noticed that the automatic strategy target return on ad spend (ROAS) had a certain side effect: AI could significantly limit ads display to users whose purchase making probability was lower than the required value. The audience of ads displaying expands, if the target return indicator is reduced.
Thus, we came to the conclusion that it was profitable to spend 1/3 of the revenue for high-margin products and 1/6 of the revenue for low-margin products on the advertising. In any case it would be unprofitable to sell the products of this particular store with their margins below 15% in Google Shopping at any reasonable values of ROAS.