Rethinking tracking to measure the real value of online advertising
BilligVVS is a Nordic market leading e-tailer selling products within categories such as bathroom & kitchen among much more. Dept has helped Billig VVS develop an innovative approach to performance tracking which evened out the great difference in profit margin across its product range. This way, Billig VVS was able to maintain a healthy economy while being more actionable due to deep insights in the profitability of its paid channels.
An innovative search metric for more precision
BilligVVS is a Danish e-tailer with a product portfolio of more than 14.000 different products ranging from small spare parts to marble hot hubs. This accounts for a great variation in profit margin. Historically, BilligVVS has been aiming to maximize revenue within a single fixed Return on Ad Spend (ROAS) target on non-brand search traffic.
Dept’s innovative approach to data made a sustainable difference in our economy
Considering the large portfolio range, ad spend from clicks on one specific keyword, can lead to sales of many different products across categories and therefore profit margin levels. Thus, a single ROAS was not sufficient. Along with BilligVVS, Dept changed the tracking setup to measure product profit instead of product revenue and the ROAS targets were replaced by a single Profit Over Ad Spend (POAS) target. The POAS metric is automatically weighted based on each keyword’s frequency of sales yielding different profit margins. Thus, a single POAS target across all campaigns is sufficient.
By measuring product profit instead of revenue, BilligVVS and Dept got a much deeper insight into the profitability of the paid search marketing channel. Therefore, ad spend could be distributed more wisely across keywords/products, towards the search queries yielding an above POAS level and vice versa. Thus, it was possible to increase CPC levels by +27% across non-brand Search and Shopping campaigns, yielding a traffic increase of +53% and a revenue increase of +27%, while making sure that the profitability of the channel stayed on target.