How to measure advertising efficiency by product category

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For sure, you know what income is brought by each of the product categories. But do you know how much you spend on advertising for each of these categories? And how does the share of advertising in turnover depend on the vendor and price range?

Challenge

Reduce the CPO through the distribution of the advertising budget.

Data to be analyzed:

  1. The share of advertising costs in the turnover for specific traffic sources in the context of certain groups of sold products.
  2. Revenue from the certain product categories in accordance with the internal hierarchy in the ERP, even though it is not always concurred with a menu on the website.

The report helps you determine:

  1. The share of advertising in turnover, and segment it into categories and analyze in dynamics.
  2. How to bind real costs to real categories in an internal system (ERP), even if they are site hierarchy.
  3. The effort of the category managers.
  4. Considering advertising costs of each category, for instance, what electronics category brings more profit — «Laptops» or «Smartphones»?
  5. In what case the increase in the advertising budget does not expand profits for a particular product category?
  6. How does the implementation of media ad campaigns affect the share of advertising costs?

Results are used by:

  1. Marketing specialists to optimize the distribution of the advertising budget by category.
  2. Product managers to determine the range of products, most favorable for promotion.

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