Achieving Major Growth and Beating the Seasonal Dip

$

416

K

X

%

Increase in YoY sales

Souper Cubes, a company specializing in innovative food storage solutions, aimed to achieve significant year-over-year growth in their top-line revenue. They faced several obstacles that hindered their potential:

Lack of Control for Spend on Individual ASINs:

The spend allocation per ASIN was not executed effectively. Many ASINs were improperly grouped in campaigns together, limiting control over spend and hindering optimization.

Revenue Dependence on Advertising:

A significant portion of Souper Cubes' revenue was derived from ads, necessitating the consolidation of their advertising efforts to eliminate spend that cannibalized organic sales. The focus needed to shift towards unbranded/generic category targets to drive growth and increase category awareness without compromising overall sales.

Sales Decline After Peak Seasonality:

Historically, sales declined after January due to seasonality. Previous years saw a drastic drop in spend after Q4, prematurely ending potential growth opportunities. Souper Cubes sought to retain budgets and continue spending at higher levels, in an attempt to use advertising to compensate for the decline.

The Nectar team stepped in and created a strategy for success.

Challenges

1

Budget Allocation

2

Dependence on Advertising

3

Seasonal Sales Decline

4

Solutions

Nectar implemented a two part strategy to address Souper Cubes' challenges and fuel their growth:

Part 1: Segmentation of ASINs and Spend Control

In order to address the issue of ineffective spend allocation across different products, Nectar opted for a detailed approach involving the segmentation of each unique product. This enabled Nectar to allot specific advertising spend to individual products rather than bundling them together in the same campaign.

This methodology provided a multitude of benefits. First, it offered a more transparent view into the allocation of advertising budgets across the diverse product range. This allowed for precise tracking of individual product performance and identification of product-specific trends.

Secondly, it yielded more control over the advertising budget of each product. Nectar was able to fine-tune the budget allocation based on the performance and potential of each product, thereby optimizing the use of advertising resources.

Finally, this granular approach laid the foundation for more efficient optimization of advertising campaigns, as Nectar could now adjust campaigns according to the specific requirements and performance of each product.

Part 2: Overall Spend Management and Performance Measurement

To address Souper Cubes' dependency on advertising for revenue generation and the issue of sales decline post peak seasonality, Nectar devised a comprehensive spend management strategy. They meticulously monitored the overall advertising expenditure to ensure it was aligning with organic sales and Total Advertising Cost of Sales (TACOS).

Carefully monitoring TACOS allowed Nectar to maintain a balance between the advertising spend and the sales it generated, ensuring that advertising costs were not eating into the profit margins.

Furthermore, Nectar leveraged advanced data analytics tools and features for optimizing spend allocation. They used techniques such as dayparting (timing ad delivery for maximum impact) and targeted high-converting keywords. This approach directed the advertising spend more strategically towards growth and increasing category awareness, ensuring sustainability even after the peak seasonality period ended.

These solutions resulted in a significant increase in both ad sales and total sales for Souper Cubes, while maintaining a consistent TACOS. This meant that Souper Cubes was able to achieve robust, sustainable growth without a considerable increase in advertising costs.

Results

Nectar's strategic intervention led to remarkable improvements for Souper Cubes' advertising performance and overall growth:

Comparing Jan-Apr 2022 vs 2023.

Ad sales increased 26.48%
Total sales increased 19.63%

These impressive sales gains were achieved while maintaining a similar TACOS, demonstrating sustainable growth without significant cost increases.

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Before

After

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