2023 – Profits To The Fore

Rob Reynolds from Adcore, Winners at the APAC Search Awards 2023, reflects on the challenges that have impacted eCommerce and examines what the future may hold for profit.

Commerce changed dramatically in 2022 from its previous two years, and these same challenges are only going to exacerbate for many in 2023. New challenges surfaced for business owners, with pressures on pricing and margins coming from everywhere. Whether it was staff/ logistics shortages, or staff/ logistics costs going up. Then there is the cost of living increasing dramatically. So previously where revenue at all costs was the business’ “MO”, now the eyes are casting back down to focus on the P&L across all channels.

With that in mind, all industries from E-commerce to Lead Gen to Travel have had to shine a light on their tech stack and understand if it supports these profit-focussed goals. For media buying, one clear way to do this is using Feed Management technologies like Feeditor (owned by Adcore.com) to incorporate your product margins into your product feeds and dynamically bid on these different product margins that are layered into different Campaigns accordingly. Ie 4-6 ROAS (return on ad spend), 6-8 ROAS and so on. To give you an example, if your agency is getting a blended ROAS of 10, but your product margins are less than 10% when you factor in all costs, you are loss-making! Even if a ROAS of 10 ‘sounds good’. The inverse is also true if you are getting a 5:1 ROAS but your net profits are 40-50%. Money is being wasted or left on the table if you’re not looking at margins in your ROAS.

Building in margin into all your marketing efforts ensures that when seasonal promotions are cutting into your profit margins, you are future proofing your target ROAS bidding accordingly to your profit margins, thereby mitigating any potential losses caused by a combination of your media buying, cost of goods and any other tech or servicing fees.

Same can be done by removing any under-performing products from any ad campaigns which are loss-making or not meeting the ROAS goals. Another very cool function is to sweep up the longtail products you’re selling that aren’t being picked up by your channel algorithms. By this, you may want to bundle all these “forgotten” products into a new feed (again using something Feeditor) to ‘growth hack’ these zombie (unloved) products, and give them new life. This tactic ensures you are casting the net as wide, but as efficiently as possible across your many products that you have available to sell to your customers!

As we say in Adcore, “not all ROAS’s are equal!”

Adcore were the winner of the Best Integrated Campaign and took the silver award for Best PPC Campaign.

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