YoY increase in revenue
YoY decrease in total actual cost of sales
Reduction in budget for discount promotions
By identifying ad spend potential, an ecommerce sensation in the apparel & accessories sector managed to amplify their revenue while cutting costs.
This online fashion retailer was eager to understand how their ad spend across different channels was affecting their total sales.
Fashion & lifestyle apparel
USA
Ecommerce site, social media, SERPs, affiliates & influencers
By providing insight into how their spending—by channel, campaign, and more—impacted their sales, we guided smart and strategic reallocations of ad spend, increased their findability on SERPs, and ultimately drove greater efficiency and higher revenue.
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 return on ad spend (RoAS). Without the proper insight, they weren’t empowered to make smart spending decisions.
Thanks to Agital Impact’s (TM) media mix modeling capabilities, we could precisely pinpoint which channels had hit diminishing returns and which ones held the potential for growth.
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.
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.
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.
“I didn’t realize just how much revenue we were leaving on the table by not optimizing our channel ad spend. Agital helped us re-allocate our budget and positioned us for growth early in the year so we could continuously grow and outperform goals!”
VP of Ecommerce
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.
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:
Within a single quarter following the implementation of these changes, the client reaped immediate results:
They increased their revenue by 40% YoY.
The brand’s TACoS (total average cost of sales) shrank by 6% YoY.
By focusing ad spend on value-driving channels, the brand cut back on product discount promotions by 65% YoY while still scaling revenue.
In just over a quarter, the brand’s website revenue had outpaced the forecast by approximately 15%.
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.
“Our team was blown away by the results Agital‘s Media Mix Modeling delivered to our business. We were able to increase revenue and efficiency without increasing overall ad spend, and we’re excited to make Media Mix Modeling a driver of our budget allocation process going forward.”
VP of Ecommerce
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