We conduct Google advertising for a furniture industry company that sells its products online throughout Finland. Before partnering with Nostamo, another advertising agency managed the advertising, but the results were not entirely satisfactory. Unfortunately, conversion tracking had not been set up for the client, so there is no detailed data available from previous advertising efforts - hence, we cannot present comparison charts for sales growth.
(A conversion refers to the desired action, which in the case of an online store, means a purchase. Conversion tracking allows us to track, for example, form submissions. Knowing from which channel visitors who made a purchase have come is crucial, so it is extremely important that it is functioning. Without conversion tracking, advertising is essentially shooting in the dark.)
Actions
Since the client did not have access to the old advertising account, we created a new advertising account and built the campaigns from scratch. (As a side note, Nostamo's clients always act as the owners of their advertising accounts.)
Google advertising involves technical work, so initially, we follow the same process for setting up advertising accounts for all our clients. We have refined this process to the point where this initial work almost always leads to significant improvements in advertising. In some situations, advertising may require more fine-tuning, but the right account structure largely determines the level of performance that can be achieved with advertising. After the initial phase, interpreting and applying data collected from conversions (purchase transactions) plays a crucial role in the development process. Our basic principle is continuous improvement, aiming to constantly enhance the effectiveness of advertising. It is important that development is carried out in a controlled manner. Often, changes are made to advertising without any kind of trial period. In the worst cases, this can lead to a collapse in advertising performance, as the impact of changes cannot be known in advance. Therefore, we have developed an approach that allows for continuous experimentation within the account, but always with a clear understanding of how the changes will affect the effectiveness of the advertising account. The development work has also had a positive impact on this client's advertising, as can be seen from the chart below.
Results
Over the last 7 months, the company has spent €5,195.23 on Google advertising, resulting in a total value of purchase transactions of €64,460.60 (in analytics, prices including VAT are always tracked, so the value includes VAT). The return on advertising investment is thus 1241%, meaning that one euro spent on advertising has generated sales of €12.41.
(Please note that not all sources of conversions can be measured, so the actual value is higher than €64,460.60. Measurement issues arise, for example, when a visitor initially arrives on the site via mobile through an ad, but makes the purchase later on another device by typing the web address from memory into their browser. In this case, the purchase transaction would be attributed to direct traffic rather than Google advertising. Due to measurement issues, we estimate that 10-30% of conversions are not tracked, but this varies by company. In the long run, the value of conversions is further increased by the fact that satisfied customers return and may even recommend the company.)
The development of the advertising account is evident even to the naked eye, but for more specific numbers, here are the following averages:
Between May and July, the value of purchase transactions generated by advertising was an average of €7,993.33 per month.
Between August and October, the value of purchase transactions averaged €11,790.90 per month.
Based on the average of the last 3 months, Google advertising is projected to bring in an additional €141,490.80 in sales per year.
While there is a wide range of statistics available from the advertising account, this concrete return is undoubtedly the most interesting factor. This also reflects our company's approach: we always aim for either sales or inquiries (depending on whether it is an online store or a service-based company). We also report metrics like traffic volume, impressions, and similar data, but these are secondary aspects of our operation. The real goals are the ones that appear on the profit and loss statement's bottom line.
