BACKGROUND
HeadlightsDepot.com, a family-owned online-retailer started in 2002, has a thriving ecommerce site and boasts an average customer review of 4.8 on Google Reviews. They successfully managed some Amazon Ads campaigns in-house, but knew that they would need to outsource their Amazon management to grow profit. They came to Omnitail to improve overall performance and maximize visibility by advertising all relevant products on Amazon.
3x
Tripled Profit Run Rate Year/Year
10X
Targeted 10x Products in Campaigns
2x
Doubled Monthly Revenue Run Rate
INVESTIGATING
THE ACCOUNT
Since Amazon Ads is still a young and evolving platform, it can be tricky to navigate, even for seasoned e-commerce owners such as HeadlightsDepot.com.
We discovered 3 common pitfalls in the HeadlightsDepot.com Amazon account.
1. Single ad group campaign structures
Using this structure, there was no way to separate profitable items from unprofitable items, as everything was being bid upon using the same strategy. Because of this, unsuccessful products were cannibalizing spend from better-performing products.
2. Unadvertised products
HeadlightsDepot.com lacked the resources in-house to promptly update campaigns with new products, or even to advertise all existing products. Amazon makes it time-consuming to add hundreds of products without proprietary tools—and leaving products unadvertised meant leaving money on the table.
3. Mismanaged keywords
Broad and Phrase keywords cost too much and attracted irrelevant traffic, with little return. Meanwhile, exact match keywords that were attracting the most purchases were underbid.
Omnitail's Advertising Strategy
Omnitail’s two-fold strategy streamlined the process of managing HeadlightsDepot.com’s Amazon Ads account, with the goal of increasing revenue and maximizing visibility on Amazon.
Optimizing Auto Campaign Structure
When we investigated the account, we realized everything was grouped into a single ad group making it impossible to determine the performance of individual products. To remedy this, we gave each product its own ad group.
Next, we calculated Cost of Goods into each ad group. Using Cost of Goods allows us to see how much margin is available on a per-item basis. Now, we could adjust and track bids to see where and how much spending made sense for each product.
Finally, we added a number of previously unadvertised products. Normally, this process would take hours on end, but with our tools, analysts are able to add thousands of product groups in a fraction of the time.
Optimizing Manual Campaign Structure
The biggest issue in the account was a lack of keyword segmentation. Broad keywords were wasting spend with little payoff, so the first step was to turn them off entirely.
Next, we separated exact match and phrase queries, and chose to bid higher for exact match keywords. While exact costs more, it is much more likely to convert compared to phrase—making it the better investment over time. Finally, we added back in any relatively successful broad match queries as exact match, expanding the account while preserving efficiency. This strategy directed spend to hard-hitting keywords that earned the most clicks and conversions.
Following initial updates to the account, we continued to monitor and add relevant keywords. Using our in-house tools, we updated the account with hundreds of keywords in minutes, maximizing visibility effortlessly.
Managing Prior Campaigns to Profit
HeadlightsDepot.com had a number of campaigns running prior to our assuming control of the account. Rather than risk major volatility in turning off the old campaigns and re-introducing new ones, we left these campaigns running side by side, making optimizations and applying our bidding strategy where appropriate.
Over time, the older campaigns reached a point of some profitability, while the newer campaigns grew in both revenue and profit. This approach allowed for a smooth transition that minimized the risk of lost revenue while the new campaigns gathered enough data to operate efficiently.
CONCLUSION
“Omnitail has provided us with record sales numbers month over month. What’s most refreshing is the way they present results to us. Complete transparency, no smoke and mirrors. Everything is profit based, they show us where we’re making money and where we’re not. Hands down, Omnitail was the best decision we made in 2018!”
– HeadlightsDepot.com
3x
Tripled Profit Run Rate Year/Year
3x
Profit Run Rate
Year/Year
