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Case Study: Contextual Advertising and Comparison Shopping Engines in the Category “Winter Tires”: ROI up to 847%

Service: [PPC 2.0] and advertising via comparison shopping engines.
Category: winter tires.
Region: Ukraine.

In this case study we will examine the data for October and the second half of September (Sept. 17 onwards). The client’s initial goal was to obtain the following data:

  • conversion rate;
  • average basket.

Why so? The site was built just by the beginning of the season and aggregating data was crucial for getting ready for the next one. Thereby, several brands of winter tires were allocated for promotion. During the preparatory stage (September) we only worked to promote some of the brands. We created Google AdWords account and came up with the relevant list of keywords. As we had previously worked on a similar project, we used our experience for developing the strategy with the new client. New data, like profit margins and brands list was also taken to account. Kiev was chosen as the initial geotargeting location. We selected the following brands: Bridgestone, Continental, Fulda, Goodyear, Hankook, and Michelin. Our client was very skeptical about comparison shopping engine, which is why we focused mainly on the Google AdWords campaign. Eventually we used the following sources:

  • Google AdWords;
  • Yandex.Direct.

Budget for the second half of September: $473.25 (including agency fee). Advertising in September resulted in: Advertising results in September As the table shows, we used Google AdWords, as well as comparison shopping engines — and Data for September:

Number of transactions — 8.
Revenue — $1,992.92
Advertising costs (agency fee included) — $473.25
Margin — 15%.
ROI — ((Revenue × Margin) — Client’s expenses) / Client’s expenses = (($1,992.92 × 15%) — $473.25) / $473.25. = -36%.
ROI (including phone calls): 13%.

We failed to attain the required return on investment level (-36%) in September. Yes, that’s true, we went into red and we knew there would be a negative outcome since we had originally planned to launch campaigns for 6 brands of tires in different cities: Donetsk, Dnepropetrovsk, Kiev, Kharkov and other cities of Ukraine. Also, except for the implementation of the original plan — running ads only on certain brands of tires - we experimented with general queries. In October, we additionally used and decided carrying out a test run of Yandex.Direct. We changed the strategy in AdWords and put more emphasis on the range of queries, changed the ad view time and continued optimizing the account. In addition, we increased spending on comparison shopping sites and experimented with its placement. Budget for October: $2,123.94 (including agency’s service fee). We achieved the following results for October: Data for October

Data for October: 
Number of transactions — 103.
Revenue — $26,820.53
Advertising costs (including agency’s service fees) — $2,123.94
Margin — 15%.
ROI — ((Revenue × Margin) — Client’s expenses) / Client’s expenses = (($26,820.53 × 15%) — $2,123.94) / $2,123.94 = 89%.
ROI (including phone calls): 847%.

Please bear in mind that the data presented refers to Google Analytics and all calculations were made on the basis of e-commerce. Given the fact that an average of 80% of our client’s orders are made via phone calls, the result is as follows:

  • September — ROI 13%.
  • October — ROI 847%.

General data for the entire period

Client’s expenses — $2,597.19 (including agency’s service fees).
Margin — 15%.
Revenue with Google Analytics — $28,813.46.
Gross margin — $4,322.01.
Gross margin ROI (ROMI) — 66%, but including phone calls — 847%.

New data coming next season!

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Comments (3)

  1. 0
    3 years ago

    Thanks for presenting this valuable post.

  2. 0
    3 years ago

    If there will be such a project as Pavel mentioned above, I'd love to hop in and help.

    • 0
      Elizabeth Hayes
      3 years ago

      Hey Elizabeth! Thanks for taking the time to read it. Our hiring manager will give you a heads up.

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