An established beauty brand came to Nectar spending over $100,000/month in advertising with approximately 20% total advertising cost of sale (TACoS), undermining their profitability.
Before working with Nectar, the brand had worked with another agency which was struggling to improve profitability. The prior agency lacked a clear advertising strategy, which resulted in lots of wasted spend (spend with no sales) and negatively impacted profitability. Nectar made transitioning painless, recognizing the prior bad experience. They learned the brand's concerns and goals, and set to work.
Given the highly competitive nature of the beauty industry, Nectar faced the challenge of boosting profitability without sacrificing scale.
The Nectar PPC team implemented a 3 part plan to improve profitability:
Nectar's first step was an audit of existing campaigns and keywords. They identified and halted campaigns and keywords that were generating low or zero returns. Further, they reviewed keyword performance to set negative targets—keywords to avoid—and added more relevant long-tail keyword specifics such as "organic anti-aging serum" to better target their audience.
Nectar then divided generalized campaigns into single ASIN (Amazon Standard Identification Number) campaigns. This granular approach allowed for a more detailed assessment of each product's performance.
Lastly, the team utilized historical sales data to determine the most and least effective times for ad placement. They implemented day-parting to pause ads during low-performance hours, like 1 am to 6 am, to minimize wasteful spending.
These optimizations led to increased sales and informed decision-making, ultimately resulting in a permanent 16.5% improvement in TACOS and 17.6% decrease in spend. The plan increased profitability and laid the foundation for more sales.
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