eCommerce Company Matches 99% of Paid Ad ROAS Exactly to Earned Revenues Report
Never Wonder Which Ads Generate Which Revenues Again
It’s a story as old as eCommerce itself. A rapidly growing, fast paced company with a short but complex sales cycle was trying to understand which channels were actually driving revenue. Week after week they’d pull reports from each channel, platform and analytics system and try to line up the weekly returns. And without fail, every week those reports would show revenue returns in excess of what was actually in the bank account. Some months, that number was as high as 347%. The problem was, as it is for many eCommerce companies, if they only had $1,000 in the bank, how could they have multiple platforms showing that they’d generated $3,740 dollars in revenues?
How was this happening? When companies rely on things like 3rd party analytics tools provided by the paid media channels themselves, or on revenue attributions from platforms like CRM, email, text and marketing automation tools, each can only see their own contributions to the overall revenue-generating customer journeys. This often means they’re taking a much larger percentage of credit for sales than they’re responsible for, which unfortunately results in revenue attributions in excess of what’s actually in the bank.
generation. The numbers provided by the paid media platform looked good, but it turns out they were getting less than 76% credit for the revenue they were actually driving. That meant they were likely turning off campaigns that were performing well while maybe scaling up campaigns that were not.
“I can’t believe how much more effective our ad spend is simply because we can see exactly which channels actually drive revenue.”
– Founder & CEO
Plain and simple. Too many marketing platforms and paid ad channels were taking way too much credit for each and ever dollar generated by their eCommerce store. The email platform would say it accounted for 86% of the sale while the paid ads channel said it drove 93% of that exact same sale. If the company only has $100 in the bank, both channels were claiming credit for the lion’s share. If that were true, the business should have $179 – which wasn’t supported by the bank statement.
That’s a huge problem when trying to see a) which channels and platforms are actually responsible for revenue generation and b) where you’re going to allocate additional funds based on *real* return-on-ad-spend (ROAS). They needed to get to the bottom of true revenue attribution quickly so that they could make some massive decisions about which channels to increase ad budgets for, and which to cut. Margins were razor thin so wasting money on non-performing ad channels was not an option.
The customer peeled back the layers of the business and opened the books to compare what their eCommerce shopping platform was showing in terms of revenue generation, as well as all the attributions from paid channels and marketing tools. Using that as their baseline, they implemented Click360 to see if they could uncover the truth about which channels were working, and which channels were just taking credit for revenues they didn’t create. As it turned out, because most of these platforms and channels couldn’t see the entire end-to-end customer journey, many of them were overstating their revenue contributions by more than 157.3%. That included their most expensive channel which overstated its contributions by upwards of 600% while actually losing the company money every month.
By pinpointing exactly which channels were generating revenues and which ones weren’t, the company was able to reel in the paid channels that were wasting resources while dialing up those that were dominating the return-on-ad-spend conversation. They found that of the +/- 10 paid media channels and platforms, 4 were profitable and 6 were not. Those 6 channels accounted for about 58% of ad spend which was reallocated to the 4 profitable channels, increasing average monthly ROAS by an unheard of 316% over previous months.
Revenue Attribution Across the Complex e-Commerce Customer Journey
Two things are true at the end of the month. One, you know exactly how much money you spent on marketing. Two, you know exactly how much revenue is in the bank. Everything else is left to interpretation when using the attributions of paid media channels, or marketing tools that can only see their own effect on orders. If an email platform didn’t see that an email was only sent out after someone clicked on a paid ad, it’s going to credit itself with nearly 100% of that order. Same goes for all other channels and platforms. If that same paid ad never saw that an email was sent out, its attributions are going to assume it’s the sole influence on a sale.
It’s not until you can see every single touch point across all channels, platforms, devices and throughout time with a complex multi-touch attribution platform like Click360 that you can be truly confident in making major business decisions based on proper revenue attributions.