Two Ways To Solve The ROAS Challenge
The year 2020 was a jolt to the eCommerce market and by all indications the result is significant growth in planned eCommerce expenditures and the future is likely to be more competition for pay-per-click advertising and no doubt a higher average cost per click. If nothing changes, a higher CPC means a lower ROAS. Solving the problem by improving the conversion rate or increasing the average order size are great but difficult to deliver on the goal.
Here are two solutions that are relatively easy to implement and should generate a short-term benefit:
- Leverage Paid Search Data. Use your bank of paid search data to determine products that deliver the highest revenue per paid click and invest exclusively in these products by adding competitive content to attempt to cannibalize your paid success with organic results. Make sure to include organic revenue growth in your ROAS calculation!
- Branded Searches. Chances are that your highest ROAS comes from people doing branded searches. While it makes perfect sense to advertise for your own brand if there is a competitor advertising for your brands, but consider testing to suppress ads for any keywords that create a top rank with no Competitive Ads. Google might not be thrilled about this new software service, but it will likely dramatically reduce your spend without reducing your traffic or orders. Again, make sure to include organic revenue growth in your ROAS calculation.