When I founded FringeSport, we started AdWords campaigns when we found our ecommerce website, on Shopify. Then, we’re trying to demonstrate our business model. We were looking for earnings and not necessarily return on investment from PPC advertising.
As we grew, we continued our AdWords campaigns, but we chased the management of these to a third party. We paid that firm a percentage of advertising spend in exchange for its own management of our campaigns.
We were focused on expansion. A year or so in, we realized that our return on ad spend — ROAS — had declined to a very low level. While there was a client acquisition debate to justify the minimal ROAS, we reset the ROAS higher and continued .
This greater ROAS goal led to a lower degree of advertising spend (and less earnings ) but in a more profitable pace. We continued on this route for a couple of years.
Recently, we became interested in multichannel funnels. We dug through our Google Analytics to see where our clients were finding usand what channels were creating the earnings. By way of example, a customer utilizes multiple channels before buying when she finds our website using a Google organic record, comes back from an email campaign, and then eventually purchases after clicking an AdWords ad.
We noticed that many clients coming through the AdWords station seemed to have sooner touches from other, lower cost channels.
We had a radical idea. Maybe the majority of the consumers out of AdWords would find us anyhow, without us paying for the visitors.
This thought is heresy one of my online marketing friends. However, at FringeSport, we spoke about it for months. We experimented with notching back our AdWords budget, and then spending more. Finally, we did the unthinkable: We removed AdWords and all PPC ads completely.
This was a gut-check second for me. I was terrified that all or the majority of our earnings would go away immediately — an overblown fear for certain, but it did cross my mind.
So what happened?
The month later we cut our PPC advertising, earnings at FringeSport.com dropped by up to 20 percent. But our advertising cost dropped by 75 percent.
We then refocused on the blocking and tackling of ecommerce:
- Search engine optimization;
- Email advertising;
- Content advertising.
And we also honed the selling skills of our employees that work directly with shoppers, for example:
We recently engaged a coach at the Sandler Selling System. He’s helped a lot.
And today, revenue is greater than it was with PPC ads, and our advertising spend is much lower. Having said that, we’ve worked hard on those fundamentals of ecommerce, and there were a few dark days when we were tempted to turn the faucet back on.
We’ll experiment with resuming PPC advertisements, but only with an extremely substantial ROAS — 10 to 20 percent likely — and we’ll handle it in house.
Has anyone else experimented with cutting edge PPC advertisements to the bone?