How to obtain the maximum return of your ads for your sports online store?

How to analyze the profitability of a sports store?

- 6 Minutes read

In order to optimize our campaigns we must have clear from the beginning what the KPIs -or Key Performance Indicators are: they are metrics or statistics to define the performance of our campaigns- of our business.

While looking at profitability is not the same as analyzing a business model to look at certain types of campaigns or even channels. In this post we will see above the main metrics for each type of analysis.

Main KPIs of an e-commerce

These statistics will help to assess profitability and viability of your sport goods online shop. Main performance metrics of a business are:

  • CAC: Customer Acquisition Cost is a metric that calculates the economic investment made to convert a potential customer into a consumer. It is calculated by dividing the money invested in marketing campaigns by the customers achieved through that campaign.

  • AOV or Average Order Value measures the average shopping cart value of each customer. It is calculated by dividing the total number of gross revenues by the number of orders.

  • cLTV or Customer Lifetime Value measures the amount of revenue the company expects to receive during a customer’s life cycle. It is calculated by multiplying the consumer’s average shopping cart value by the frequency of purchase.

  • Growth

    • Earnings: Ideally, it should be analysed on a interanually basis. In this way we will be able to know the real growth, since the sport sector has high seasonality. It is calculated by dividing what you have earned in a specific period by what you earned in the same period of the previous year.

    • Orders : this metric will be used to assess whether the logistics of the business need to be improved.

Main KPIs for Online Marketing campaigns

In order to know the efficiency of the PPC channels in a fast and global way there are two main metrics:

  • Orders and/or earnings

  • ROAS o Return On Advertising Spend measures the economic return on investment in advertising. To calculate it you must divide the income by the investment (multiply it by 100 to get a percentage).

It’s important to know the number of orders and earnings, since analyzing only through ROAS can lead to confusion; we’ll see it better with a real case of a Netrivals’ customer.

We analyzed two campaigns: Skiwear and Skis.


The campaign Skiwear presents the following results:

  • Number of Orders: 200

  • Revenues: 10.000€

  • ROAS: 800%


The Ski Sales campaign presents the following results:

  • Number of Orders: 10

  • Revenues: 1.800€

  • ROAS: 2000%

These examples help us understand why the two metrics need to be used together. If we only look at ROAS, we would be losing the core of our revenue, while if we only look at the revenue received, we would not get such a high return that requires less effort.

Optimization of sports product campaigns

In the previous article in which we talked about creating a global PPC strategy we separated the campaigns between Google Ads and Facebook Ads, to analyze them we are going to divide the campaigns between:

  • Search Campaigns

  • Display Campaigns: Here we will take into account both the campaigns of the Google Display Network and the campaigns of Paid Social and Native Advertising.

  • Google Shopping

  • Affiliates

Optimization of search campaigns

To start the analysis we will see which campaigns and ad groups perform best and worst. We will try to draw conclusions as to why certain campaigns or certain ad groups show a low performance.

Let’s see what metrics we should take into account:

  • Impression Share: this metric calculates the number of impressions received out of the total number of impressions that could have been received by using the keywords.

  • Click Share is the estimated ratio between the clicks you have achieved and the total number of clicks you could have received.

  • Conversion Value: these are the revenues generated by the campaign.

  • ROAS

To optimize search campaigns we must analyze if the poor performance of the campaign is due to:

  • Keywords: perhaps they are activating our ads for inquiries that are not directly related to our business. For example, our boxing apparel campaign may be showing ads for inquiries regarding fight schedules or sports news.

  • Landing Page: you have to make sure that users go to landing pages related to the search they have made. For this case, we must look at metrics such as: Bounce rate and Average time on the page.

  • Ads: you have to make sure that the ad shows all the necessary information for the user to click on it and land on a page highly related to your search. For example, if a person is looking for “boxing shirts” he will hardly click on an ad with a title like “Cheap Sports Equipment”.

Optimization of Display campaigns

As we explained in the previous article, the difference between a prospecting campaign and a retargeting campaign is that in the prospecting campaign you seek to attract new customers while in a retargeting campaign the goal is to convert users who have already visited your website.

Prospecting Campaigns

The main metrics are:

  • CPA or Cost Per Action: This is the most important metric for prospecting campaigns as our goal is to capture new customers. In the case of our CPA campaigns it means Cost Per Transaction.

  • ROAS: Measures the profitability of the first customer transaction achieved through this campaign.

The goal is to attract quality customers, so we must pay special attention to CPA rather than ROAS, because if the customer is satisfied, he will make more purchases and therefore the ROAS will increase even if it is not reflected in the platform’s metrics.

Where to optimize the campaign?

As with all optimisation processes, the starting point is an exhaustive analysis of certain elements of the campaign. In this case, and in the event of having followed a strategy similar to that proposed in the previous article, it is vitally important to compare the performance of the campaigns with the performance they obtained during the same period of the previous year.


Factors to be analyzed:

  • CPM or Cost per Thousand: with this metric we will see the most expensive audiences to show our ads.

  • Reach: is the total number of unique users impacted.

  • CTR or Click Through Rate (Clicks/Impressions): with this metric we will know how much interest this campaign’s ads generate in the target audience.

  • Audience: who are we targeting?

  • CPA and ROAS

When we detect that an audience is underperforming, and having ruled out factors such as seasonality or the copy of the ad, the task will be to create higher quality audiences.

Let’s look at an example:

We reviewed a prospecting campaign for people who love nature to sell mountaineering and trekking products and the results are bad. Since this audience does not perform well, we will have to look for audiences with more intention as:

  • Google Ads: market audiences for mountaineering products.

  • Facebook Ads: lookalike audiences of current customers of mountaineering products.

Protip

In Google Ads, create personalized target audiences by adding both transactional keywords and web pages from the vertical we want to cover. In the sports sector we have detected that they show a superior performance compared to other sectors.

Retargeting Campaigns

Main metrics are:

  • ROAS

  • Revenue

The ROAS will show us the profitability of the campaign, while the revenue metric shows us the volume of income that we would no longer obtain if the campaign had not been carried out.

Where to optimize the campaign?

The procedure followed to create a retargeting campaign consists first of creating audiences based on the behaviour of our website and then sending personalised messages to each of them.

In the previous article, we recommended creating audiences according to the family or even the product category. To optimize these campaigns, we simply have to analyze the performance of each of these audiences and adjust the bidding based on this criterion. Unlike other types of campaigns where we must also analyse other factors such as the copy of the ads or the locations where they are shown, here the most important factor is an optimal audience, even more so if you use dynamic ads.

Product List Ads Campaign Optimization

The most important metrics to analyze a PLA Campaign are:

  • Conversion value

  • ROAS

  • ACOS: The initials correspond to Advertising Cost of Sales and is calculated by dividing the cost of the ads by the total sales.

How to optimize Sports Products Shopping Campaigns?

Here it depends on the structure we have decided to use during the creation of the Shopping Campaigns.

In the case of having divided the campaigns according to the season of the year it will be easy to optimize, since we will have to adjust the bidding strategy according to the time of the year. For example, if we have used this structure, the following structure could adjust the ROAS during winter like this:


Campaign 1: Winter

  • ROAS: 1500%

  • ACOS: 6,67%


Campaign 2: Spring

  • ROAS: 1000%

  • ACOS: 10%


Campaign 3: Summer

  • ROAS:800%

  • ACOS: 12,5%


Campaign 4: Autumn

  • ROAS: 1000%

  • ACOS: 10%


Tips for Netrivals’ customers:

Since at certain times of the year, for example summer in skiing products, your products will have little turnover, you can perform dynamic pricing strategies to liquidate items that are out of season, thus gaining space in the store. To do this, you must access the Dynamic Pricing>Strategy Editor module and once there, create a strategy for the selected products.

Optimisation of Affiliation Campaigns

The most important metrics for analyzing an Affiliate Campaign are:

  • CPC o Cost-Per-Click: is the price it costs for each consumer to click on an ad of your e-commerce.

  • Total Cost

  • Revenues

How to optimize the campaign?

Unlike a price comparator like Google Shopping, you cannot set a different CPC for each product, so the only way to optimize these campaigns is to send certain products.

Let’s see an example: following the previous scenario, it is not efficient to send snow sports products when we are out of season, since the purchase intention is generally lower for this type of products outside of the cold season. Since we cannot choose which products to pay for within the platform, we will have to modify the data feed.

Tips for Netrivals’ customers:

Since at certain times of the year, for example summer in skiing products, your products will have little turnover, you can perform dynamic pricing strategies to liquidate items that are out of season, thus gaining space in the store. To do this, you must access the Dynamic Pricing>Strategy Editor module and once there, create a strategy for the selected products.