We have audited more than 100 online stores and constantly see the same errors. For example, a client wants to scale, raises the budget – and advertising starts to work at a loss. What we do in this and other common cases – read on.
Owners and marketers of online stores come to us at jam.agency for an audit of contextual advertising to find ways to increase profits. Typically, they see the following symptoms, after which they suspect that something is wrong with the context:
it is not possible to determine whether it is rational to invest in context at all;
a lot of resources are spent on setting up advertising, but poor results are obtained;
There are a lot of orders from advertising, but the profit decreases.
During an audit, we always see one of five problems, the solution of which increases profits significantly. Next we will tell you how we solve them and how to detect them in yourself.
1. For mono-brand stores, advertising does not pay off if you start with category queries
The online plumbing store of the Iddis brand contacted us. The brand has been on the market for 17 years, sold in offline stores and on marketplaces. With the growing popularity of the brand, the client decided to build sales through his own online store. We started the project and ran into a problem that is common for monobrands.
❌ Problem: a mono-brand store cannot compete with multi-brand stores
At the beginning of our work with Iddis, the client said that he wanted to promote through category queries. These are queries that do not specify a brand: for example, “buy a faucet”, “buy a sink”. As opposed to category queries, there are branded queries: “buy an Iddis faucet.”
The client’s logic is simple: category queries are entered more often than branded ones, which means that advertising will be seen by more people and it will bring more profit. We warned that such advertising would not be profitable, but the client wanted to see it live. We launched advertising for category queries on a small budget. The results came out as expected:
Users who enter brand and category queries behave differently:
Only top brands in their category can effectively promote themselves according to category queries. Their advertisements will also have high conversions for category queries, because the audience goes to the brand’s website due to its popularity.
✅ Solution: focused on brand queries and increased profits by 4 times
When the client was convinced that category queries were not working, we began to intensively work on brand queries. We decided to cover as many requests as possible, which included the names of Iddis products from all lines. The conversion of ads for them was 8-10 times higher than for category ones. The coverage of all kinds of brand queries compensated for the lack of category ones.
The strategy worked. We increased profit by 4 times compared to last year, and the number of orders by 2.5 times. But the Iddis case cannot be repeated in all cases.
The Iddis brand is well-known: it has been on the market for 17 years, its products are available on marketplaces and are sold in many offline plumbing stores. There are more than 9 thousand subscribers on social networks. Brand advertising will bring enough profit to Iddis because many people know the brand and search for it in search engines.
In addition to Iddis, we had several mono-brand online stores with which there was no successful case. For the online lingerie store Palmetta, advertising worked either to zero or to a strong minus. There was too little profit from brand campaigns.
Palmetta is searched much less frequently in Yandex than Iddis, which means the brand’s audience is much smaller.
If you have a mono-brand store and few people are familiar with your brand, contextual advertising is not the best solution. First of all, work on increasing your popularity, including through other distribution channels: distributors and marketplaces.
If your brand is well-known, you have thousands of followers on social networks and you are represented in stores and marketplaces – use brand queries, but not category ones.
See if there are mono-brand online stores in the advertising results. If they are not there, most likely someone has already tried to promote this way before you and it did not work.
2. If you don’t use automated campaigns, you’ll lose half your profits or more.
CarBaza is an online auto parts store. After Google left, revenue dropped sharply, and the business owner sought advice. We found that the client focused on detailed customization of manual tools and did not use automated strategies.
❌ Problem: without using auto campaigns it is very difficult to reach a large part of the target audience and adhere to the optimal order costWe conducted an audit and found a problem. The store has about 10,000 products. They tried to advertise the entire range and to do this they created many advertising campaigns with complex and confusing settings. Because of this, it was easy to lose sight of which products were out of stock, which ones were on sale, and which ones had increased in price. This means that advertising could mislead users.
Despite all the mistakes, advertising was profitable while Google Ads was working in Russia. With its shutdown, over several months, profit decreased from 369,000 rubles to 172,000 rubles per month. At this point the client contacted us.
Due to the huge assortment and confusing settings, the specialist could not quickly respond to changes in product data. Therefore, the client used a bidder, a third-party program for managing advertising. The bidder raised bids on those ads that resulted in a sale. But he was determined that advertising costs could rise 4-8 times after one sale – with such expenses, even advertising the highest-margin products became unprofitable.
✅ Solution: launched automatic advertising campaigns → profit returned to 2021 levels and exceeded them
We outlined solutions that reduced costs and made advertising campaigns more convenient for optimization: disable the bidder, make setting up advertising campaigns simpler and more flexible. But the main and first decision was to launch product campaigns – a type of automatic advertising campaign.
We could have started by getting our campaigns in order, but the client’s main problem was that they were overly reliant on static tools. Instead, the emphasis should have been on automatic campaigns that could cover all products on the site, change the description and price of the product in the ad, select the optimal bid, or turn off impressions.
Product campaigns are advertisements that are displayed immediately below the search bar in Yandex, in the product gallery. Examples of products with images and prices are displayed there. The campaign works automatically: Yandex selects an audience that may be interested in a specific product. The same ads are shown in the Yandex Advertising Network and services.
The main task of a specialist when using commodity advertising campaigns is to select such a rate so that the campaign effectively learns to find the right customers, but at the same time the final cost does not exceed the cost of the application.
In the second month after launch, product campaigns began to generate a profit of 120,000 rubles, in the third month and beyond – 235–285,000 rubles. This is almost 70% of all profits from contextual advertising.
We continue to work on the project. We also put things in order in other advertising campaigns. But just the introduction of commodity advertising systems made it possible to reach the profit that was before Google left.
Find out if you use automatic advertising campaigns: conversion optimization, Advertising Wizard, product gallery, dynamic search ads. If not, you’re likely missing out on a lot of the profits.
Often, instead of automatic bidders, specialists use their own programs for managing bets, such as bidders. They have never given a better result than autostrategies: the point is both in the number of parameters that Yandex takes into account and in the complexity of developing such programs. This is practically a scientific work that requires a large team with high qualifications.
3. If automatic advertising campaigns are connected, but an incorrect product feed is generated, they will not bring profit
The online bookstore Respublica contacted us. The client had automated campaigns set up, but they didn’t work well. We started looking for the reason and discovered another common error – an incorrectly configured product feed.
❌ Problem: if incorrect information about a product is pulled from the site, the target audience does not see ads with it
A product feed is a file with a structured description of products. With its help, automatic advertising campaigns are launched: the name, description and image of the product are taken from this file and inserted into the ad.
The Respublica store did not include all the information important to the audience in its feed, and some of the information was transmitted incorrectly. Here are the errors we found:
Because of all the errors, the ads were seen instead of by potential buyers by people who were looking for another product or who had no intention of buying anything at all. And those who were nevertheless interested in the product received incorrect information about it. As a result, advertising had almost zero effectiveness in some categories.
✅ Solution: put the product feed in order and increased income from ads by 7 times
We compiled a technical specification for the client’s programmer, according to which he created a new product feed. From it, all information about the product was pulled into the ad in the right places.
What were the main errors in the technical specifications and how did we solve them:
A product uses only one image for ads of all formats: horizontal, vertical square. After the changes, several images began to be pulled up for a product and the best one was selected for ads in different formats.
The product description was too long and did not fit into the ad. We made a general description that fit the size of the ad.
Advertising titles for vinyl records did not include the title of the record, as the name of the record label took up all the space. We specified in the terms of reference to omit the name of the label so that the name of the record would be placed in the title.
Now ads were displayed for the queries entered by the target audience and sold the product better: users saw a relevant image and headline. Due to this, the conversion of ads increased: for example, almost 4 times for vinyl records.
After the changes, revenue from feed-based ads increased 7 times, and the average order value decreased by 70%.
See what ads are generated in dynamic ads and smart banners in Direct:
1. Go to the “Statistics” section.
2. Select “Order reports”.
Order a report on the required RCs for the selected period.
Download the report and view the ad text and images.
Pay attention to the typical mistakes that we listed above in the table.
4. If you focus on increasing the number of leads, advertising costs will no longer pay off.
We were contacted by a company that was engaged in providing household services in several regions of Russia: cleaning, electrician work, plumbing, installation of furniture and windows, finishing. The client wanted to receive more leads, but did not take into account the gross profit from advertising. This led to another classic context setting problem: campaign overinvestment.
❌ Problem: over time, as advertising costs increase, the profit from it decreases
Contextual advertising works on the principle of an auction: the higher the price you specify at launch, the more often and higher than the rest the ad will be displayed. Accordingly, the ad will be clicked on more often, and there will be more orders from it.
Different companies are constantly competing with each other for position in search results and increasing the cost per click to make their ad stand out among the rest. Therefore, each subsequent click costs more than the previous one. For example, for 100 ₽ you will get 10 clicks, and for 150 ₽ – only 12.
Because of the auction, a paradoxical situation arises: advertising brings more orders, but profits fall. The simplest and most popular solution in such situations is to increase the budget. But this leads to an even greater decrease in profits.
In our case the same thing happened. The client saw that there were more orders and less profit – he decided to increase the budget. As a result, the campaigns began to operate at a loss, and the customer turned to us.
✅ Solution: we reduced rates where campaigns were running at a loss → and broke the profit record
There is no universal solution to the problem of reinvestment. A specialist needs to empirically find the cost per click at which there will be maximum profit. Each campaign and ad group has its own optimal cost. You can’t just cut the budget for the entire project – the number of orders will be greatly reduced and the client will be left without revenue.
We have started reducing rates for those ads that are operating at a loss. The lower the bid, the less often the ad is displayed in search results – because of this, the number of orders decreases. But at the same time, there are also fewer advertising costs, which means that the profit from each order increases. This is what it looks like:
Here’s how lower cost-per-click impacted total ad spend and gross profit:
Look at three indicators: advertising profit, advertising costs and the number of purchases. If advertising costs increase along with purchases, but profits decrease, then the problem is likely to be overinvestment in advertising campaigns.
Of course, there may be exceptions. For example, when products experience a seasonal downturn, the cost per click increases—but only for a few months until the downturn passes.
A drawdown in profits as orders and costs increase can also be accompanied by changes in prices, margins, or demand for specific goods. In any case, we advise you to find out about the reasons for the drawdown of your contractor.
5. If campaigns have a confusing structure, you get 2-4 times less profit than you could
We were approached by Marwin, an online store of goods for the whole family. This is the largest online store in Kazakhstan with more than 100,000 products in 20 key categories, which were divided into hundreds of subcategories. The consequence of the huge assortment was the lack of a clear structure in advertising campaigns.
The Marwin case is noteworthy in that the client had no obvious problems – the context, even without our participation, brought great profits, which simply stopped growing. We were able to increase profits several times thanks to the structuring of advertising campaigns.
❌ Problem: when differences in products are not taken into account when selecting bids, some ads will be unprofitable
We started the project with an audit, which usually takes a week and a half, but for this project, due to its size, it took a whole month. There were no typical errors: the client’s advertising was regularly checked and optimized. But then we divided the products by margin, demand and seasonality and realized that the difference in these indicators is not taken into account in the structure of advertising campaigns.
70% of Marwin’s revenue came from a few key campaigns. They mixed products with different seasonality, margins, and average bill. This made advertising difficult to manage. For example:
rates cannot be quickly reduced for goods experiencing a seasonal decline;
rates cannot be increased on more popular products so that the client receives more profit from them;
it is impossible to reduce advertising costs for low-margin products in order to receive more profit from each order;
Even if an auto strategy is used, it is impossible to increase the order cost for high-margin goods; at the same time, it will also rise for low-margin ones, for which this will be unprofitable.
✅ Solution: we put things in order in the structure and increased profits by 3 timesCleaning things up is always a chore. And we needed to do it for Marwin in order to divide products into categories and thus increase profits from contextual advertising.
First, we defined a new structure for advertising campaigns. When creating, we took into account the marginality of goods, seasonality and average bill: and thus divided the existing categories in the store into subcategories. In addition, we needed not to overdo it with the division into categories: so that each campaign would receive 30-40 orders per month. If there are fewer orders, some advertising tools will be unavailable.
As a result, we received 300 advertising campaigns. Now we could flexibly adjust rates in accordance with how profitable the goods were for the store in a given period.
We started launching advertising on a new structure and almost immediately saw an increase in indicators. As a result, store profits increased by 1.5–3 times, depending on the month, compared to last year.
Open your advertising account and look at the campaigns. Signs of structural problems:
• there are advertising campaigns that have less than 20 conversions per month;
• there are more than a dozen campaigns in total, but more than half of the orders come from one or two;
• within one campaign, products with different prices, seasonality and margins.
If you use auto strategies, most of the profits or orders from a couple of campaigns may be acceptable. But if you see this relationship, it’s worth asking your contractor about the reason.
Checklist: checking if everything is in order with contextual advertising
If you have a single-brand store, make sure that you are not wasting your budget on advertising by product category.
Check whether you use automatic advertising campaigns: product campaigns, Master of Advertising. If not, you have the opportunity to increase profits by 50-70%.
Check the correctness of the feed so that automatic advertising campaigns bring maximum profit.
Look at the ratio of profit, number of orders and expenses. If orders and costs increase, and profits decrease, the campaigns are overinvested.
Check the number of advertising campaigns and how many conversions each of them accounts for. If one campaign has less than 20 conversions, or, conversely, a couple of ten campaigns account for the majority of conversions, you are losing profit due to an unoptimized structure.
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