Choosing the wrong partner to spearhead your digital marketing efforts can be costly in multiple ways. The direct financial impact, both from undeserved management fees and wasted investment can quickly overwhelm a business and sour the trust of having a third party involved. Often, before an owner has time to realize that the wrong agency is steering their marketing, tens of thousands of dollars might be spent in vain – or worse – counter-productively. In this case study, we will look at an example of what mismanagement of paid search campaigns cost one eCommerce business and how UnifiedSEM was able to stop the financial bleeding in a 24-hour period, then grow the business from there.
In early 2017, The Home Security Superstore – an eCommerce business with more than a decade of successful online sales and marketing, engaged a third party service to take over their paid search and e-mail marketing efforts. THSS was sold on a series of confidence inducing pre-service strategy calls and the higher-than-average management fee of the provider was rationalized as necessary for a strong and experienced staff by the provider.
The actual results of both campaigns were a disaster. Between February 1 and July 31 2017, the ad spend related to products which never once had a conversion topped $35,000 on AdWords and $57,000 on Bing Ads. When UnifiedSEM first analyzed the account, most of the keywords and campaigns related to this wasted spend were still active.
During our analysis, we also found that the firm in question was using a negligent automated bidding strategy which paid more than 16 times the necessary bid necessary to gain a first page ranking. Even AdWords’ basic Bid Landscape tool estimated that a reduction in bids of 94% would have resulted in 99.2% of the impressions and 85.7% of the clicks at 6% of the cost. In many of the campaigns during this period, the ad spend was actually higher than the revenue generated!
When you’re bleeding hundreds of dollars a day in wasted ad spend, fixing things now is generally an owners top priority. After presenting the findings of our analysis, the owner of THSS wanted us to engage on an emergency update of the account immediately.
Within 24 hours of our takeover, the account was spending approximately 15% of the previous daily average without any significant noticeable impact on conversions. It seemed very simple to us: Don’t bid on products that don’t sell, and don’t bid more than you have to in order to get a potential customer’s attention!
While in this case, the first 24 hours were key to stemming the daily cash loss, The Home Security Superstore remains a client today. Where the previous company had difficulty keeping the campaigns over a 1.0 return on ad spend [ROAS], we regularly exceed 8.0+ ROAS on a weekly basis.