Client Profile:
A leading online retailer of weight loss medications offering nationwide shipping across the USA. The client aimed to drive sales with an average monthly ad spend of $250,000 and a target Return on Ad Spend (ROAS) of 2.0 or higher.
Initial Challenges
- Branded Keywords Inflating ROAS:
The account initially showed a ROAS of 2.75, which was misleading due to branded keywords dominating the campaigns. Once branded terms were negated account-wide, the true ROAS fell to 1.4, significantly below the target. - Regaining Market Share:
The team had to compensate for the loss of branded keyword traffic by aggressively bidding on high-value non-branded terms like “weight loss medicine”, increasing competition with other advertisers. - Performance Max (PMax) Limitations:
- PMax campaigns allowed branded traffic to skew performance metrics.
- The sheer size of the account made it challenging to effectively monitor and optimize all ad groups.
- Geographic Performance Variability:
- Certain states delivered excellent ROAS, while others performed poorly due to low awareness or trust in online retailers.
- The team had to adjust bidding and targeting strategies based on geographic performance data.
- Technical and Platform Issues:
- Increased conversion volumes occasionally caused automated systems to crash, leading to campaign pauses. Each pause disrupted market share and lowered optimization scores.
- Ads extended beyond targeted areas, requiring location exclusions to refine targeting.
- Search Partner and Display Network placements generated low-quality traffic with high costs and low conversions, demanding additional exclusions.
- Awareness Campaigns and Indirect ROI Challenges:
- Google’s team recommended using Demand Gen campaigns (bundling video and display ads for brand awareness). While these campaigns increased visibility, they made it difficult to attribute direct sales, complicating the measurement of ROI.
Solutions and Strategic Adjustments
- Focus on High-Performing Campaigns:
- Shopping Ads: Identified as the most effective channel for driving conversions and meeting ROAS goals during bi-weekly meetings with Google’s team in LA. Shopping ads became the cornerstone of the account strategy, with additional budget allocated to these campaigns.
- Search Ads for Non-Branded Keywords: Aggressively outbid competitors on key terms like “weight loss medicine” while excluding underperforming terms and low-converting geographies.
- Enhanced Targeting and Exclusions:
- Implemented strict geographic exclusions to eliminate ad spend in poorly performing states.
- Refined targeting to prioritize high-performing states with better consumer awareness and trust in online medication providers.
- Removed Search Partner and Display Network placements to focus budget on Search and Shopping Ads, which delivered higher ROAS.
- Bid Adjustments and Budget Reallocations:
- Increased bids on high-intent keywords and optimized campaign budgets to prioritize channels with proven performance.
- Used geographic bid modifiers to improve efficiency in top-performing states.
- Automation and Technical Improvements:
- Introduced backup automation processes to handle increased conversion volume without crashing.
- Reduced campaign pauses by proactively monitoring and addressing technical issues.
- Indirect ROI and Brand Awareness Efforts:
- While Demand Gen campaigns presented ROI tracking challenges, they were selectively deployed to maintain brand visibility.
- Leveraged insights from these campaigns to inform creative and audience strategies for Search and Shopping Ads.
Results
- ROAS Recovery:
After adjustments, the account’s ROAS improved from 1.4 to 1.95 within three months, nearing the target of 2.0. - Geographic Optimization Success:
- Excluding low-performing states improved overall efficiency and allowed for better budget allocation to high-performing regions.
- Top states delivered ROAS consistently above 2.5.
- Increased Conversions Through Shopping Ads:
- Shopping Ads accounted for the majority of high-ROAS conversions, validating the decision to prioritize this channel.
- Shopping campaigns exceeded a 2.2 ROAS, helping balance the overall account performance.
- Cost Savings:
- Eliminating Search Partner and Display Network placements reduced unnecessary spend by 18%, enabling better use of the budget for high-performing campaigns.
- Improved Campaign Stability:
- Automated systems were fortified, reducing downtime and minimizing disruptions in ad delivery.
Lessons Learned
- Granular Control Is Key:
Broad campaigns like PMax need careful monitoring to avoid reliance on inflated metrics such as branded keywords. Granular targeting and exclusions deliver better performance. - Focus on Proven Channels:
Shopping Ads outperformed other channels for direct sales, highlighting the importance of allocating budgets strategically. - Geographic Customization Works:
Recognizing geographic differences in consumer behavior allowed for tailored strategies that maximized efficiency. - Awareness Campaigns Need Clear Objectives:
While awareness campaigns like Demand Gen are valuable for brand-building, they require clear goals and complementary direct-response strategies to maximize impact.
Conclusion
This case study highlights the importance of precision, adaptability, and platform expertise in managing large-scale ad accounts for highly competitive industries like online weight loss medications. By addressing technical challenges, refining targeting, and focusing on high-performing channels, the team successfully improved ROAS and regained market share. These strategies are critical for any business seeking to scale its advertising efforts while maintaining profitability.
