Threshold Spending Strategy for SEM Ads

• Client: Sports Apparel Brand's Ecom Site
• Skills Utilized: Advertising Operations, Project Management in Business Companies
• Role: Project Lead, with the support of HQ Growth Marketing Lead and paid ads vendor

Overview

In 2021, we implemented a strategy to optimize the SEM advertising performance of the sports apparel brand's EC site.

Previously, the goal was to increase the overall ROAS, but we changed the policy and set a minimum ROAS for each product category.

This allowed us to maintain the minimum ROAS while maximizing sales.

This strategy prevented opportunity loss due to budget shortages when business was good and established operations that did not consume extra advertising budget when business was slow.

Challenges

• Need to expand sales from advertising to achieve high goals.
• There is a significant difference in the ROAS of advertising between the on-season and off-season (when sales are good, the ROAS is too high, causing opportunity loss).
• Because the dependence on SEM advertising for overall sales was high, it took time to decide the SEM budget every month.

Strategy

• Utilization of the automatic bidding function of Target ROAS: By utilizing the automatic bidding function of Google Ads' Target ROAS, we maximized sales by fixing the ROAS at a low value. To avoid deficits, we cooperated with the finance department to check the minimum ROAS for each product, and set up campaigns for each product category to set the Target ROAS.
• High daily budget limit: Set a high daily budget limit to prevent opportunity loss due to budget shortages.
• Budget management and regular meetings: We released the budget limit of SEM advertising, and held regular meetings with the finance team to report the fluctuations in the monthly budget and actual consumption. We set detailed rules to avoid risks.

Results

• After adopting the operation policy in November and December 2021, sales increased by 30% compared to the same month of the previous year.
• Although we struggled to control the ROAS because the promotional activities were active in the on-season, we succeeded in maintaining the line of the minimum ROAS thanks to the efforts of the team.

Conclusion

By utilizing the automatic bidding function of Target ROAS and optimizing the workflow, we significantly improved the advertising operation performance of the sports apparel brand's EC site. We also realized efficient and effective advertising operations by reducing the waste of advertising budget.