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Profit Whales Case: How to Make the Most of a Limited Ad Budget

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Profit Whales Team on Apr 06, 2022 in Uncategorized

Profit Whales Case: How to Make the Most of a Limited Ad Budget

 

A story of a successful and profitable exit from Amazon. With our help, of course.

 

Company Background

The brand we are going to talk about today is an outstanding company that provides inexpensive kitchen gadgets and home appliances, including microwaves, coffee machines, and toaster ovens, to people in countries all over the world. The brand’s products are highly rated and popular, as revealed by a plethora of consumer reviews.

 

The Challenge

The company decided to exit Amazon and certainly, wanted to accomplish that at a profit. In order to produce a profit after exit, the company resorted to us for help. Our task was to run ads for 54 different products on nine separate accounts. The major challenge was the limitation of the advertising budget.

 

The Solution

One of the key goals we had for our client was to generate an intricate and thoughtful setting of ad campaigns. So, we performed a complex setup of several types of advertising for each product. We used Amazon PPC Ads to help evolve and strengthen the brand’s reach and discover more ways to expand its audience and revenue. We aimed to create a two-tiered strategy that addressed the intricacies of the full sales funnel, from initial contact with a customer to conversion and driving revenue.

We were able to connect with the right shoppers at the right times (whether these were shoppers browsing brands or category-specific products) by utilizing Sponsored Products. We also used Sponsored Display to boost cross-selling abilities. 

To develop a better understanding of their brand products which are included within the retail realm, we classified their products into major groups:

 

  1. With ASINs that had sales and traffic metrics above average, we tried to reach out to shoppers that weren’t familiar with the brand and educate them on these products. As these ASINs had been successfully performing through the entire brand’s journey, we decided they could expand the company’s audience and bring in more clients. 
  2. For ASINs with lower sales and traffic metrics, we reached out to the most loyal shoppers of the brand. Since they love and trust the company, they might want to purchase these ASINs. 

 

With these strategic insights in mind, we used the Amazon DSP full-funnel offering to achieve the goals of building a brand at the top of the funnel, reaching audiences across different categories to increase mass awareness. Ultimately, this helped shoppers reach a branded store created with customers in mind, allowing shoppers to easily search and pick the most relevant items across all categories.

As a result, sales increased by 169.48% compared to the previous period.

Sales Increase by 169.48%

 

However, the Buy Box was very often transferred from account to account. Moreover, one of the major accounts was banned, MACoS did not exceed 1%, and CPC on all accounts was about $0.5.

Let’s dive into the analysis of each account.

 

Account #1

Product Quantity: 13 

While working on this account, we increased the total sales by $8,120,9136, up 164% from previous months. At the same time, we kept the cost per click below $0.5 on average, and the share of advertising costs over sales (MACoS) did not exceed 1%.

The graph below shows that the brand’s net profit at that time reached $2,180,749.

The Brand’s Net Profit Reached $2,180,749

 

Profit Whales’ team had several months to prepare for the peak sales season, so we worked to implement the ad structure for all products. The results compared to the same period last year can be seen below:

Q4 BEFORE PW:

 

  • Sales: $1,562,854
  • Orders: 53 387.

 

Q4 WITH PW:

 

  • Sales: $4,188,034 (a 167% increase)
  • Orders: 125,333 (up by 134%).

 

As a result, we can observe multiple increases in sales during the peak season.

 

Account #2

Product Quantity: 24 

This is the main sales account. In early September, it was banned. Advertising started to work only 3.5 months after the re-activation of the account. However, we see that sales have not dropped significantly compared to the same period last year. We kept the cost per click below $0.5 on average and sales accounted for $15,419,080 (a drop by $2,241,216).

Cost per Click Below $0.5 on Average

 

Account #3

Product Quantity: 10

In essence, this account served as an insurance account for the main products as its advertising did not work systematically. That is why we can observe a slight increase in the main advertising indicators relative to other accounts. The MACoS was 1.22%, and ACoS averaged 13.61% over the entire period of our work on the account. The CPC rate was below $0.5.

MACoS = 1.22%, ACoS averaged 13.61%, CPC rate - below $0.5

 

Account #4

Product Quantity: 24

This is one of the strongest accounts. It showed an increase in total sales by $5,250,724. It is worth noting the jump in sales on Prime Day, during which ACoS did not exceed 10%, and CPC was $0.42. The total sales at that time accounted for $18,319,425.

The Jump in Sales on Prime Day

 

Account #5

Product Quantity: 10

This relatively small account showed an increase in total sales up to $890,671 reaching $2,460,553. Also worth noting is the spike in sales on Prime Day, during which ACoS was higher than on other accounts (%16.16), as ads rarely worked on this particular account. The CPC remained at the verge of $0,50.

Increase in Total Sales up to $890,671 Reaching $2,460,553

 

Account #6

Product Quantity: 12

While working on this account, we managed to increase the total sales rate by $12,754,490 compared to previous months. At the same time, the cost per click averaged less than $0.5, and the share of advertising costs over sales (MACoS) did not exceed 1%.

Profit Whales Managed to Increase the Total Sales Rate by $12,754,490 Compared to Previous Months

 

Account #7

Product Quantity: 10

While working on this account, we increased the total sales by $6,177,751 compared to previous months. At the same time, the cost per click was, on average, slightly above $0.5, and the share of advertising costs over sales (MACoS) did not exceed 0.3%. Net profit reached $450,220.

Total Sales Increase by $6,177,751 Compared to Previous Months

 

Outcomes

Profit Whales has been diligent in its efforts to spread the brand’s promotion on the Amazon marketplace. With most products previously unadvertised, we have achieved some truly staggering numbers, both in advertising and in general. Profit Whales increased the company’s total sales from 34 million to 94 million dollars. We were able to make the most of the limited costs and achieve the maximum result.

Profit Whales provided a significant boost to the brand’s value and recognition on the market.

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