Campanie
JM
It is easy to achieve spectacular growth if you are a startup or operate in a fast-growing niche. Increasing sales is not difficult if your advertising budgets are very high and you can sacrifice your profitability. However, if you are a leader in a highly competitive mass market and have to increase not only your revenue but also profits, you face a real challenge.
Our Client, Vola.ro, is Romania’s #1 online travel agency. It has nearly 90% brand recognition amongst Romanian travellers. It is the leader in online flight sales and one of the fastest growing companies in the region.
During its 10-plus years on the market, Vola.ro has developed highly optimised performance marketing campaigns. However, at a certain point, the company reached a barrier where any expansion resulted in a decrease in total margins.
Despite an existing high market share, the Client’s ambition was to continue fast growth without sacrificing profitability.
The objective was to grow sales volume whilst increasing the company’s net margin as much as possible at the same time. There was no specific goal on the client’s side, but we wanted to achieve 25% growth or more and at least maintain the total profit, and if possible, to increase it by 10%.
Despite a long history of development and optimisation, the Client’s performance marketing still focused mainly on the most relevant keywords in Google Ads combined with intense remarketing – as in the case of many e-commerce businesses.
Any prospecting beyond using search engines was very limited, as the post-click conversion rate of non-remarketing display and video campaigns was too low to include these ads in the performance marketing strategy.
On the other hand, the number of post-view conversions of display and video ads was very high. However, we could not interpret this data as an actual contribution to the overall result, because it was obvious that the incremental effect of these campaigns is significantly smaller.
The uncertainty regarding the actual effect of video campaigns made any budget allocation decision extremely difficult. The decision makers required hard evidence that could justify spending significant sums of money on ads that generated a smaller number of clicks and uncertain conversions.
We had to find a new way of prospecting, that can become an alternative to more and more aggressive bidding in Google – a scalable display and/or video campaign with hard evidence of its effectiveness in driving actions.
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Attached the creative of the video campaign. The full case study video will be ready until November 15th.
Link to the Client's logo: https://adequate.digital/wp-content/uploads/2019/07/vola-ro-logo.png
Our Client, Vola.ro, is Romania’s #1 online travel agency. It has nearly 90% brand recognition amongst Romanian travellers. It is the leader in online flight sales and one of the fastest growing companies in the region.
During its 10-plus years on the market, Vola.ro has developed highly optimised performance marketing campaigns. However, at a certain point, the company reached a barrier where any expansion resulted in a decrease in total margins.
Despite an existing high market share, the Client’s ambition was to continue fast growth without sacrificing profitability.
The objective was to grow sales volume whilst increasing the company’s net margin as much as possible at the same time. There was no specific goal on the client’s side, but we wanted to achieve 25% growth or more and at least maintain the total profit, and if possible, to increase it by 10%.
Despite a long history of development and optimisation, the Client’s performance marketing still focused mainly on the most relevant keywords in Google Ads combined with intense remarketing – as in the case of many e-commerce businesses.
Any prospecting beyond using search engines was very limited, as the post-click conversion rate of non-remarketing display and video campaigns was too low to include these ads in the performance marketing strategy.
On the other hand, the number of post-view conversions of display and video ads was very high. However, we could not interpret this data as an actual contribution to the overall result, because it was obvious that the incremental effect of these campaigns is significantly smaller.
The uncertainty regarding the actual effect of video campaigns made any budget allocation decision extremely difficult. The decision makers required hard evidence that could justify spending significant sums of money on ads that generated a smaller number of clicks and uncertain conversions.
We had to find a new way of prospecting, that can become an alternative to more and more aggressive bidding in Google – a scalable display and/or video campaign with hard evidence of its effectiveness in driving actions.
==========
Attached the creative of the video campaign. The full case study video will be ready until November 15th.
Link to the Client's logo: https://adequate.digital/wp-content/uploads/2019/07/vola-ro-logo.png
General Information:
Strategy:
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It became obvious that in order to significantly increase sales volume within a strict ROI regime, Vola.ro had to re-invent their performance marketing strategy and dive deeply into the entire user journey, traffic value, and conversion attribution, as well as to discover new prospecting sources beyond search engines. PROFIT-DRIVEN STRATEGIES, PORTFOLIO BIDDING, AND PRICE OPTIMISATION Advertisers want to buy more clicks and therefore they must place higher bids in order to outbid their competitors.. As a result, the CPC grows until advertisers realise they are paying too much. This very often happens when the bill for PPC clicks is higher than the total sales margin. In fact, overinvestment occurs much earlier, even before the company produces losses when total profit starts to decrease. The target, where the total margin is highest, can be identified by an analysis of marginal conversion cost and CPC/CPM elasticity (see slides, as well as our article: https://goo.gl/X2atFn). The consequence of marginal conversion cost analysis is portfolio bidding. Instead of using one ROI target for each campaign, their target ROI is adjusted depending on elasticity in order to improve the performance of the entire portfolio of campaigns. The outcome is sometimes counterintuitive. Investment in the source with the lower ROI may be more profitable than increasing the budget of the best performing campaigns. For example, the SEM campaign may have a total ROI of 120%, but if we want to acquire more clicks, the marginal ROI is only 10%. Therefore, instead of increasing SEM bids, it is more profitable to invest in YouTube ads with 30% ROI (see our article: https://bit.ly/TargetROI). The same mechanism applies to e-commerce economics. If the product price decreases, the conversion rate usually grows. However, at a certain point, the loss of margin can’t be compensated for with higher sales volume and the total margin decreases, despite growing revenue. The sweet spot of product price maximises click value. Its optimisation can be crucial for the possibility of profitable marketing expansion (see: https://bit.ly/PriceOptimum). CONVERSION LIFT Conversion lift makes it possible to measure the likelihood that a user will convert without being exposed to an ad (control group) vs. users who saw ads. As opposite to the conventional post-click or post-view conversion tracking, a conversion lift test allows the measuring of the actual incremental effectiveness of the campaign (see slides). Conversion lift experiments were so far possible only in the case of remarketing. We have been one of the pioneers of this methodology, and our first conversion lift test, conducted for the Vola.ro sister company FRU.PL in 2014, demonstrated that the effectiveness of remarketing campaigns in the Google Display Network is more than 10x higher than the result measured using the last click attribution model (see our article: https://bit.ly/ConvLift). As soon as Conversion Lift studies (do not confuse with Brand Lift surveys) became available on YouTube, we decided to take advantage of this opportunity to conduct a conversion lift experiment for the Vola.ro video campaign. |
Execution:
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