breaking the roas paradigm with phybonaccy

SUMMARY

ROAS is suboptimal for ecommerce businesses because it doesn’t consider returns from customers or the great variability of margins. For Spectrum, an Italian clothing ecommerce, we built a system to import the sales marginality from their CRM and then match it with the gclid from the Google Ads campaigns. This allowed import and optimisation for new, smarter offline conversion actions. 

In the 60 days following the implementation of the new system, the investment on search campaigns grew by +107% YoY and the average margin per transaction grew by +28% YoY. This demonstrated that smart bidding succeeded in prioritising margin over revenue thanks to the new conversion setup. These results show that the only way to move with machine learning, and not against it, is to feed the algorithms with more accurate data.

THE CHALLENGE:

Drive more profitable conversions and efficiently allocate incremental budget on Search campaigns, optimised for MOAS (Margin On Ad Spend).

THE SOLUTION:

Phybonaccy, an internally built tool connecting customer first party data (CRM and on-site pixels) to advertising platforms to feed the algorithms with more sophisticated data.

We imported sales marginality from Spectrum’s CRM into Google Ads, matching the gclids coming from the ad clicks and optimised search campaigns accordingly, with a smart bidding strategy. 

Graph 1: YoY Investment comparison