Example of Advertising Campaign Analysis

As an example of good practice in analyzing advertising campaigns, we will highlight a slightly older case of selling compression socks, which are sold on the online sales page and advertised on various online platforms, including the Facebook community. Compared to other advertising space providers - both local and global (Google Ads, Najdi.si, Proplus, Httpool, etc.), Facebook proved to be the most effective.

Based on the experience of selling such products online, the main focus of the sales was on the social network Facebook, where, through targeted advertising, the number of potential customers was reduced to 480,840 individuals.

For targeted advertising, they used various filters to narrow down potential customers, ranging from location to age. Since the product is only sold in the Slovenian market, advertising was narrowed down from approximately 500 million to 596,240 individuals living in Slovenia. They then specified demographic characteristics, namely adults, narrowing the advertising to 484,160 individuals. Age was determined based on the habits of consumers who, somewhere around the age of eighteen, start making online purchases and buying clothes for themselves, as they become more independent than minors.

Other filters (such as interests, connections) were neglected during filtering, as they had little impact on our advertising circle.

Interpretation of Advertising Campaign Results

The conclusions of the advertising campaign showed that the average cost per click was about fifteen cents. The cost per click is not uniform as it changes daily. It depends on the CTR (Click-through Rate) ratio between ad impressions and clicks. The more interest there is in the ad, the higher the CTR, so we can confidently say that the cost of the ad depends on how interesting the ad is to the target audience and how much competition there is.

The conversion rate of the online store is approximately three percent. This means that for every hundred visitors, we receive an average of three orders.

To successfully manage advertising, we calculate the CPO (Cost per Order). This figure reveals the amount of money spent per individual order. In this specific case, we pay fifteen euros for one hundred clicks. For these fifteen euros, we get three orders. The average cost of each obtained order is five euros.

The average order value is about thirty euros (some site visitors order only one pair of socks, while others order four pairs, with an average total expenditure of thirty euros).

With an average purchase value of thirty euros, spending five euros is a relatively high percentage, so a one-time purchase is not enough for satisfactory profitability. 

To ensure long-term success of such advertising, we must:

• reduce the cost per click or get cheaper traffic,
• increase conversion (the ratio between visits and purchases),
• increase the average order value, and
• ensure that we not only acquire one-time purchases but retain customers.

Conclusions or actions based on the analysis of results

We removed the option to purchase only one pair of socks. This "forced" customers who used to buy only one pair of socks to purchase at least two pairs, thus increasing the average order value. We tested this measure with an A/B-Split test before making a final decision, and from the results, we could see that despite removing the option to order only one pair, there was no significant drop in orders.

By regularly changing ads, the ads remained "fresh" and interesting, thereby maintaining lower click costs.

We ensured regular communication with customers via email and other channels. We found that customers are less likely to make repeat purchases if we do not communicate with them regularly. Sending emails and communicating through social media with existing customers is practically free or very cost-effective, making our customer profitable over the course of a year, making multiple purchases.

By appearing regularly on social networks and writing useful and interesting posts on the blog or blog linking with Facebook, we managed to attract a steady stream of website visitors, for which we do not have to pay directly (organic traffic).