Ozsale: Maximizing Profitability with a Customized Bid-to-Margin Strategy

Adcore Case Studies

Campaign Goals

Increase profitability on all goods sold by ensuring that high-margin products receive the majority of allocated budgets, and prevent ad spend on unprofitable items.

Executive Summary

With over 1 million product skus, and widely differing margins for each product depending on their unique attributes, we build a customize Bid-to-margin strategy.
Classify products according to High, Medium & Low margin, and segmenting the Google campaigns using this data by their respective margin-bands.
Ensure ad spend is distributed in the most profitable manner.
The strategy has been a clear success. Despite reduced account spend (-16.23%), we have seen a marginal increase in both conversions and conversion value. As such, return has increased substantially, with ROAS increasing 23.14%.

-16%

Account Spend

This B2M strategy enabled a more efficient use of account spend.

+23%

ROAS

A change in spending allocation on high-margin products led to an increase in conversions, revenue, and ROAS.

Efficiency

Bid-To-Margin (B2M) strategy through Feeditor, enables us to optimized their ad spend toward high-margin products, reducing overall costs while increasing return on investment.

Cooperation

The success of the campaign relied on close cooperation between the client’s technical, finance, and marketing teams, ensuring that accurate product margins and profitability goals were used to drive data-informed decisions across all campaigns.

Challenge

With over 1 million product SKUs, and widely differing margins for each product depending on their unique attributes, there was a desperate need to ensure ad spend is distributed in the most profitable manner.

Main obstacles:

1. High number of SKUs ( > 1 million)
2. Competitive market
3. Wide variety of goods sold with multiple target markets

Main Actions

Ensure the client is providing the necessary information within the feeds (COGS) provided to Feeditor.
Calculate margins and organize products into “margin-bands” using Feeditor. I.e. High, Medium & Low margin
Understand required profitability on each product to understand which profit targets needs to be assigned to each “margin-band”.
Segment the Google campaigns using this data by their respective margin-bands, and allocate budget towards high-margin goods.

Solution

We worked closely with the client’s technical, finance, and marketing teams to ensure the Bid-To-Margin strategy was seamlessly integrated into their campaigns, with budget and product margins at the core of decision-making.

Custom Campaign Deployment: Differentiated ROI targets by margin band to optimize performance.
Budget Reallocation: Shifted budget toward high-margin products and campaigns.
Supplemental Feeds: Created through Feeditor to identify and highlight high-performing products for better budget optimization.

About Ozsale

Year established: 2006
Website: ozsale.com.au

Ozsale is an Australian retail shop that sells Women’s, Men’s, Kids and Baby Clothing, Accessories and Shoes.

Get exclusive CMO tips that I only share with email subscribers.

Don't forget to share this article!