When ROAS drops, is it your fault?
Do you struggle to keep your Google Ads campaigns profitable during the off-season?
While some businesses see steady sales month after month, others experience fluctuations throughout the year. This can make it challenging to manage Google Ads campaigns effectively, since most campaign types are designed for an "always-on, steady state" pace.
I recently worked with a client, John, who was running Google Ads campaigns for a seasonal business. John's business sells alcohol online, and he was experiencing a predictable drop in Google Ads ROAS after the holiday season.
John was concerned about the decrease in conversion rate and wanted to know how to improve his campaign performance, so he scheduled a Google Ads coaching call with me.
I walked John through the process of diagnosing the source of the drop in ROAS. We looked at his campaign performance data over time, and it was clear that the conversion rate had fallen off a cliff in January compared to December. However, his average CPC had remained relatively stable. This suggested that the drop in ROAS was primarily due to the decrease in conversion rate, and not necessarily an increase in competition or a decrease in ad quality.
We discussed the fact that this drop in conversion rate was likely due to seasonal factors. People are less likely to buy alcohol online in January and February compared to the holiday season. This is a common trend for many ecommerce businesses, not just John's.
Still, all hope was not lost. I walked John through adjusting his campaign settings to improve his performance - for both the high times and the low times. We discussed a variety of factors, including:
- Campaign Structure: I suggested that John restructure his campaigns to better target specific audiences and product categories. By creating separate campaigns for different types of alcohol, for example, or for different customer segments (like those interested in gifts versus personal consumption), he could tailor his budget and messaging for each group. This would help improve his click-through rates and conversion rates, ultimately leading to a better ROAS.
- Bid Strategy: I helped John understand the importance of setting the right bid strategy for his goals. I explained that his current CPA target was too low, which was preventing his campaigns from spending their budget. While a low CPA may be easy to achieve when sales are flying in December, I recommended increasing that CPA during the sluggish "Dry January" season to give the campaigns more room to flex into different types of queries and audiences. I also suggested that he might switch to a ROAS-based bid strategy to better align with his business goals.
- Ad Copy: I suggested that John review his search ad copy to ensure it was still relevant and appealing to his target audience during the off-season. For example, he could try to keep the holiday magic going with Valentine's Day or Mother's Day-themed campaigns.
John was relieved to learn that the drop in ROAS was likely due to seasonal factors and not necessarily a problem with his campaigns. Still, he acknowledged that there was always room to adjust his campaigns to improve his performance.
If you're running Google Ads campaigns for a seasonal business, here are a few things you can try, like John:
- Adjust your expectations for the season. If you know that Black Friday, or Mother's Day, or summer holidays are your peak periods - track your conversion rate and ROAS over time. This will help you identify which months are your peak season and which months are your off-season. You can then adjust your budget and bids accordingly. I recommend using a tool like Google Analytics to track your website traffic and conversions.
- Adjust your ad copy to reflect the changing consumer demand. For example, during the holiday season, you may want to focus on gift-giving themes. During the off-season, you may want to focus on other themes, such as special occasions or everyday enjoyment. You can use A/B testing to see which ad copy performs best for different seasons.
- Consider using different campaign types to reach your target audience during different seasons. For example, during your peak season, you may want to use Performance Max campaigns to reach a broader audience. During your off-season, you may want to use Search campaigns to only target high-intent people who are actively looking for your products or services.
Keep your Google Ads momentum going all year long. Book a call with me and let's keep the good times rolling!