Case Study: Launching Sales Campaigns For A Store That Offers Inexpensive Products In A Highly Competitive Niche
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The niche: Online bookshop
Business’s specifics: Small shop, narrow product range.
The problem: High CPA (transaction cost) with a low average check.
The cause of this problem: High competition leads to a high cost per click (CPC) in search campaigns.
The solution: Launch of sales campaigns.

Introductory Data

  • Inexpensive products. Online bookshops have a significantly low average check: 200 UAH in our case, as our client specifies in educational and children's literature.
  • High competition. The market is filled with both major well-known trademarks and a lot of small online shops. As a result, the auctions are overloaded, and the price of one click per product in search campaigns is high.
  • High CPA. It could reach nearly 25% of an average check in search campaigns, while only product and dynamic campaigns actually work.
  • Narrow coverage. It is ineffective to launch general query campaigns because of the high transaction cost. As a result, there’s no opportunity to cover even half of the traffic.

Our Task

To lower the CPA (it should be less than 10% of an average check) and to drive more traffic at the same time.

The Solution

We decided to launch sales campaigns and to gradually refuse from using search campaigns (except brand one).

Why did we consider sales campaigns more important?

  • They bring more targeted transitions. Sales ads demonstrate a product to a potential customer before they visit a website. Furthermore, in our case, it is easy for customers to decide if they need a certain book even by looking at ads displayed by broad search query requests (image 1).
Screenshot_8.png Image 1. Fragment of the search results by broad search query request «Algebra exercise manual».

  • Low cost per click. CPC in sales campaigns is lower than in search ones. At the same time, a desktop user sees 5-10 sales ads instead of 2-3 search ones in a visible screen area, and a few of those ads could be yours (image 1).
  • Broad coverage. Sales campaigns enable us to show product ads not only in Google search but also in KMC, YouTube, and Gmail. At the same time, the CPC will be 3-5 times lower than if we used each tool separately.
  • The versatility of this tool. Sales campaigns allow you to involve users at all stages of a sales funnel, starting from general queries (image 1) to specific product ones (image 2).
Screenshot_9.png Image 2. Fragment of a search query results by product search query request (name + author).

The conclusion. Sales ads are very informative and allow you to attract a more specific audience to your website, increasing the transaction coefficient, and lowering the CPC. As a result, the cost of transactions decreases.

Work Stages

We divide all work related to the sales campaign launch into two stages.

The first stage is focused on the technical part of the process: we create and set up a Google Merchant Center account. This includes:

  • process of checking if a website meets Google Merchant Center’s requirement;
  • account creation;
  • proof of a website’s ownerships;
  • creation of Terms of Reference for a feed;
  • feed’s check and upload;
  • work with the declined products (in 99% of the accounts), figuring out the reasons, and searching for problems’ solutions;
  • setting up the rules of feed’s transformation for product segmentation.

The second stage is all about working with Google Ads account:

  • creating campaigns according to the structure we developed;
  • choosing and testing the strategies;
  • analyzing the effectiveness;
  • launching smart campaigns.

The Result

After a month of launching standard sales campaigns, we got the CPA 23% lower than in search campaigns: 43 UAH. At the same time, sales campaigns, along with product search query requests, drove users to a website even by general search requests, which we couldn’t afford when we used search campaigns.

In 6 months of work, the CPA lowered to 27 UAH. After we launched smart sales campaigns in December 2018, it reduced to 18 UAH (image 3).

Screenshot_10.png Image 3. CPA reduction dynamics as a result of a sales campaign launch.

If we compare two tools — smart sales and search campaigns, we’ll see the following results for the same budget:

  • CPC is 3 times lower (0,6 UAH and 1,8 UAH);
  • traffic volume is 3,5 times bigger;
  • the transaction coefficient is 2,5% and 4%;
  • CPA is 4 times lower.

CPA in August 2019 was 11 UAH, which is 5,5% of an average check. We reached our goal. Now our main task is to maintain that result while the project grows and develops.

The Conclusion

Sales campaigns help you get:

  • bigger target traffic volume for the same budget, because CPC is lower;
  • higher transaction coefficient, because the ads are more informative;
  • low transaction cost, because of the low CPC and high transaction coefficient.