I set next month's spend from last month's ROAS.
Where the ad budget should go, judged by what each channel's orders actually make and what a new customer is worth over time.
Sound familiar?
- Our best-converting product has our worst return rate.
- The ad budget is a share of revenue that nobody has questioned in two years.
A worked example
Worked example · two styles in one catalogue campaign
- Style AROAS in the ad account 4,0ROAS after refunds 2,4Refunded 16.000 kr
- Style BROAS in the ad account 4,0ROAS after refunds 3,6Refunded 4.000 kr
Both show a ROAS of 4,0 in the account on 10.000 kr of spend each. Once the refunds are counted, Style A brought in 2,4 kr for every krone of ads and Style B 3,6, and the refunds arrive weeks after the budget for both was spent.
Style A has 40 % of its sales sent back and Style B 10 %. Return freight, handling and the units that cannot go back on sale come on top of the refund, so the gap is wider than this.
What you receive
A written budget recommendation every month, and a meeting to go through it. Your agency keeps running the campaigns.
Who owns it at your brand
Your head of marketing.
How often
Every month.
What it needs
When it starts paying back
With next month's budget.
Is this one worth it for you?
It's worth it when ads are a large share of your costs.
If one of these sounds like your business, write to me.
A few lines is plenty. If you're not the one who decides, forwarding this to whoever does works just as well.
There's nothing to prepare, and nobody sends me any data before we decide to work together.