Online Fashion Retailer Optimizes Their Channel ROAS

The Challenges

• Finding the bottom-line revenue impact of each marketing channel.
• Reallocating budget to optimize channel ROAS (return on ad spend).
• Optimizing SERPs.
• Overspending on discount promotions to drive revenue.

Fashioning a Data-Driven Budget Strategy

In addition to wanting insight into the relationship between their spending and sales, this fashion powerhouse was interested in optimizing their ad budget to their ROAS. Without the proper insight, they weren’t empowered to make the smartest spending decisions.

Thanks to Agital Impact’s media mix modeling capabilities, we precisely pinpointed which channels had hit diminishing returns and which ones held the potential for growth. 

Leveraging past data to predict channel efficacy.

Our team identified that the client’s performance had not yet plateaued and they could continue to invest for a consistent rate of return. However, to push that return rate to its maximum, they needed to identify which channels were ripe for growth. 
 
Our initial modeling identified each channel’s contribution to their revenue.  

Amping up SERP ads investment:

SERP ads emerged as the client’s star performers, raking in $16 for each dollar invested. Heightening ad expenditure in this sector would ensure the brand appeared in more relevant searches, drove higher quality traffic to their site, and converted at an increased rate. 

Maintaining affiliates and influencers.

Affiliate marketing was a powerhouse for this client, generating $25 for every dollar spent. However, this channel typically didn’t trigger demand—it merely closed the loop on previously stimulated demand through hefty discounts. 
 
Influencers painted a different picture, bringing in spectacular returns of 24:1 while also generating new demand. However, the fickleness of social media virality made their influence unpredictable. As a result, injecting more into SERP offered the brand a firmer grip and a steadier outcome than escalating spending on affiliates and influencers. 

Bolstering the social media budget.

The brand’s social media channels were on a roll, rocking a 9:1 return despite the relatively meager ad budget assigned to them, making them more effective than previous methods. Our model forecasted that inflating the ad budget for social media platforms like Meta, TikTok, and Pinterest would attract more traffic and conversions. 

Implementing the Model’s Findings

With Agital’s guidance, the brand gained the clarity needed to make more strategic decisions on their ad budget. In Q1 of 2022 alone, our strategy generated 40% more revenue YoY and decrease total advertising cost of sales by 6% by making the following changes: 

• Spending 159% more on SERPs (Google AdWords and Microsoft Bing).
• Increasing spend on social by 94% YoY (Meta, Pinterest, TikTok).
• Reducing spend on discount promotions by 65%.

Results That Rocked the Runway

Within a single quarter following the implementation of these changes, the client reaped immediate results: 

Higher Revenue 

They increased their revenue by 40% YoY. 

Enhanced Efficiency 

The brand’s TACoS (total average cost of sales) shrank by 6% YoY. 

Reduced Expenses 

By focusing ad spend on value-driving channels, the brand cut back on product discount promotions by 65% YoY while still scaling revenue. 

Website Revenue Surge 

In just over a quarter, the brand’s website revenue had outpaced the forecast by approximately 15%. 

A Best Seller, Ready for More

The client was thrilled with the results delivered by our proprietary Media Mix Modeling tool. It allowed them to channel their ad spend toward high-value areas, subsequently boosting both revenue and efficiency without increasing overall ad spend. 
 
With us on their side, this fashion retailer is now a reigning champion in their industry. 

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