How do you know if specific eCommerce ads are working

You’re spending lots of hard-earned cash on them, and in theory, the reports Google, Facebook etc produce when you make a sale should be accurate.

The reality of that reporting is very different. Is it is a pure guess. That guess is called “attribution” and yes uses fancy statistical models, but so does election forecasts. Often they’re not right.  If you doubt this, go read up on “attribution”. You’ll get a headache. Then add up how many sales Google, Facebook and your email provider claim, and it will be about 250% of your total sales.

So, what’s the solution to get more accurate?

Firstly, know how much you can spend on advertising to break even or be profitable, I wrote about this previously on the Retail Fest blog. Once you have your head around the “Marketing Efficient Ratio” read on.

It comes down to your ability to control how much budget goes into a specific product or category. By this, I mean have campaigns set up in Google and Facebook Ads per product category, say dog leads and dog treats. 

Set up marketing campaigns per product group and allocate spend for the month. Then, measure over that month how many sales of that product category have been made. Work out your return or Marketing Efficiency ratio, this will tell you if your campaign ads are working.

It’s not 100% precise, but it’s more accurate than trying to narrow down to spent X on one Ad how much did we make.

Why does this approach work?

As a retail business, as with most businesses, money in versus money on. If you spend X, what is the return? Digital marketing was sold on this premise, which simply isn’t true. A guess (they call it attribution) isn’t accurate and is skewed by the ad platforms to show it’s worth spending more with them.

You have to zoom out a bit to get a clear picture. See the wood for the trees, so to speak. Structuring your ad campaigns to allocate budget to product categories allows you to see money in money out on a group of products, or product. 

Plain and simple.

Why isn’t my ad person doing this?

It’s often not through malice; it’s more a lack of understanding of how a retail/eCommerce business works. Their world is in digital, reporting and metrics. They often can’t see the real sales numbers that matter to you as a retailer. The digital metrics, cost, inventory and raw sales have to be sync to get that clear picture. Often the approach is products are lumped together to maximise sales of anything that sells.

How do I implement this in my business?

Allocate spend per product category and have the person who runs ads report back on it. This will give you a clear picture.

Iain Calvert
Ecommerce Consultant & Trainer
Boom Aussie eCommerce Training

Iain (aka “ian”, that double “I” throws a lot of people) is an Australian based eCommerce consultant and trainer that has worked with the likes of Billabong, Vogue, Quiksilver and 100’s others under NDAs. He applies what he learned working for big eCommerce businesses to help independent Aussies businesses sell online.

Originally growing up in the UK he started in eCommerce in 2003. He moved to Brisbane in 2011 to join, and eventually end up running, one of the largest independent digital and eCommerce marketing agencies in Australia.

He now lives in Melbourne, where he works as an Ecommerce Consultant for a select handful of Aussie brands helping them sell successfully online.

Iain’s definition of eCommerce success is having more money in the bank at the end of the month, rather than ridiculous headline-grabbing quotes like “XYZ now worth $100m”. After working with and seeing the inside of these fast-growing companies he came to learn they aren’t all they seem. He believes that popular doesn’t mean profitable and applies this to eCommerce.

Due to restricting the no. of clients in his eCommerce consulting practice, and repeatedly being asked to help other Aussie eCommerce businesses, he setup up Boom – Aussie Ecommerce Training to document what he knows and share it with fellow Aussies or anyone with an interest in selling in Australia.

He can be easily contacted on Linkedin, where he also regularly shares free eCommerce tips.