How We Improved A Client's CPA By 50%+ And Increased ROAS by 2x In Just 30 Days
Our client is in the health and wellness sector and has two key product segments:
- A digital, on-demand product
- Physical products that supplement their online solution.
Before working together, their biggest problem was their inability to profitably reach and convert customers with paid ads. They had a high CPM ($23) and CPA ($55-75), depending on the product, resulting in a low ROAS and ROI.
Our job was first to diagnose why they had these issues and determine what was preventing them from achieving better results, and then to build a plan to help them get the most from their marketing budget and see positive growth month over month.
1. Audience Cannibalization
Their average CPA was $60-$70 — unprofitable and inhibitive to ad scaling. Upon further research, we found that they’d been cannibalizing their audiences and improperly targeting customers at nearly every stage of the buyer’s journey. Although they had the right framework, their audiences overlapped, targeting only a small amount of their total audience. This increased conversion costs and cost per click and decreased their click-through rate, as their audience became exhausted from seeing the same creative. Before reviewing creative, this indicated that Step #1 was to fix their audience targeting and any data tracking errors with their pixel.
2. Lack Of Creative Uniqueness
We found that the content was too similar across each stage of the buyer’s journey. By limiting themselves to only a few creatives, they quickly exhausted their ads — the cost to engage and convert someone steadily creeping up weekly. We identified that the best thing to do was to take the available creative and make many new variations. This strategy extends the available content’s lifespan while also providing more testable variations to find the highest converters.
3. Budget Breakdown
Properly segmenting ad budgeting was one of the biggest problems they faced. For most brands, a 60-40 or 70-30 split between cold traffic and retargeting works best across all levels of scaling. This client, however, was at a 30-70 split — 70% of their monthly ad budget was focused on retargeting instead of bringing new people into their pipeline. This inhibited them from profitably converting customers, as they were running ads to audiences that became smaller every day.
How We Solved Their Profitability & Scaling Issues
After identifying the core problems and developing and executing our action plan, we began seeing positive results within 30 days.
First 30 Days Working With Ad Labs Marketing
We began making our recommended adjustments to the account. At this point, we were not focused on scaling, but instead maximizing the current marketing budget’s efficiency — such as reworking audience targeting and campaign budget distribution. Effective scaling comes after laying the right foundation.