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Reduced Cost of Sale to 12% from 18% YOY

Client: Leading Home Décor Retailer

Industry: Home Décor

Service: PPC (Pay-Per-Click Advertising)

The Challenge & Our Impact

A home décor business was struggling with poor gross profit margins due to high advertising costs, with the PPC budget consuming 75% of their total marketing spend. This left no room for reinvestment and was compounded by a poor account structure. Our strategic PPC optimisation focused on cost efficiency and campaign effectiveness. By implementing a new campaign strategy, reducing bid percentages, scaling effectively, and introducing high-converting campaigns, we successfully reduced the Cost of Sale (COS) from 18% to 12% year-over-year, freeing up significant budget for reinvestment.

Reduced Cost of Sale to 12% from 18% YOY
Reduced Cost of Sale to 12% from 18% YOY

Core Challenges

  • Poor Gross Profitability: High advertising costs were significantly eroding profit margins on sales.
  • Dominant Ad Spend: The PPC budget accounted for three-quarters of the entire marketing budget, limiting other marketing activities.
  • Lack of Reinvestment Capital: Profitability issues meant no spare funds were available to reinvest in business growth or diversification.
  • Inefficient Account Structure: A suboptimal PPC account setup contributed to inflated costs and poor performance.

Our Strategic Solution

  1. New Campaign Strategy Implementation: Overhauled the existing campaigns with a fresh strategic approach focused on maximising profitability and efficiency.
  2. Bid & Scaling Optimisation: Carefully worked on reducing bid percentages where appropriate while strategically scaling campaigns across the entire account to maintain or improve volume efficiently.
  3. Introduction of High-Converting Campaigns: Identified and launched new campaigns specifically designed and targeted to achieve higher conversion rates and better cost-effectiveness.
Reduced Cost of Sale to 12% from 18% YOY
Reduced Cost of Sale to 12% from 18% YOY

Key Outcomes

  • Cost of Sale Reduced to 12%: Achieved a significant year-over-year reduction in COS from a high of 18% down to a more sustainable 12%.
  • 33% Marketing Budget Savings: The reduction in COS effectively provided approximately 33% savings within the ad spend, which became available for the business to reinvest in other marketing channels or business areas.

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