Kuntokauppa’s goal was to create a more efficient budget by ensuring they weren’t overpromoting low-value and poor-performing products in their Facebook DPAs (dynamic product ads) campaigns.
Kuntokauppa has been using the ROI Hunter Product Performance Management (PPM) platform to optimise their social ads’ performance since 2021.
The initial choice for their goal was to analyse their catalogue with ROI Hunter’s new Segments solution, which allows users to set the parameter for the desired budget and the performance they expect to receive on a product.
Kuntokauppa has a catalogue with massive price gaps across its inventory (e.g. e-bikes from €1500-3000 and low-value items like waistbands for €10), so the ROI Hunter team built Kuntokauppa a setup with the same concept as ‘Segments - Poor Performers’ using the Product Insights solution.
This setup in Product Insights allowed Kuntokauppa to set the threshold for the spend and price ratio and the expected ROAS (return on ad spend) for their product inventory.
Using this setup, it was then possible to create a product set that excluded poor-performing items from their DPA campaign based on the spend and price ratio and ROAS.
As shown below, Kuntokauppa filtered for products with a price above €100, a spend and price ratio of less than 1, and Facebook ROAS greater than 1 in the last 30 days.
Products not meeting these filters were considered poor performers and were excluded from DPA promotion.
By excluding poor performers, the budget could be focused on promoting the products that would help Kuntokauppa achieve their desired ROAS. This filter also restricted low-value products from being over-promoted.
After creating the product set with this filter, Kuntokauppa tested the effectiveness of this setup for six weeks with a Meta split test format that compared ‘All products - BAU (Business As Usual)’ with ‘All products - excluding poor performers’ campaigns.
ROI Hunter’s Product Insights offered Kuntokauppa unique visibility into product performance data, enabling them to optimise their budget by ensuring they wouldn’t promote low-value and low-performing products. This ultimately allowed them to reallocate their spend toward items that generate sales and improve their margin.
As a result of the split test (with the same amount of spending in each ad set), the ‘All products, excluding poor performers’ product set outperformed the ‘All products BAU’ product set, earning 42% higher ROAS (return on ad spend) in Google Analytics.
When comparing the Google Analytics ROAS account average to the six weeks before the new product set, their overall Google Analytics ROAS went up by 130%, their Facebook CPA (cost per acquisition) dropped by 22%, and their Facebook CTR (click-through rate) increased by 51%.