Digital advertising campaigns have become an expected expense for eCommerce stores today. Without the consistent effort to proactively get in front of your target audience, driving a significant number of new potential customers to your site can be difficult.

Digital ad spend by eCommerce companies in the U.S. totaled more than $17 billion last year and is projected to reach $38.4 billion by 2024. With more businesses—both in eCommerce and beyond—turning to digital advertising, the bids required to earn top ad placements are rising.

Last year, the average cost per action (CPA) for eCommerce companies using Google search ads was $45. Now, Google estimates that the average business earns $2 for every $1 that they spend on advertising. Numerous studies show that the average return for Facebook ads can come in around $4 for every $1 spent. But as the cost of digital ads increases, it will be harder to reach these benchmarks (or surpass them).

There are two major metrics for measuring the efficacy of ads: return on investment (ROI) and return on ad spend (ROAS). ROI is a measure of how much your ads impact your bottom line: profits minus costs, divided by costs. ROAS is a measure of how effective individual ads are: revenue from ads divided by advertising spend. In this article, we’re going to look at ROI, as we’re focusing on how ads relate to your business as a whole and not only on the pros and cons of specific ad campaigns.

Measuring ROI in relation to ads really comes down to three factors: how much you spend on ads, how many sales you get at your store, and how much you earn per sale. 

Improvements to any one of these variables will increase your ROI. That said, you must find a healthy balance and not over-optimize one area when creating your advertising strategy. This is because changes to one variable may negatively impact others.

If you significantly reduce your ad bids to lower costs, you may also drastically lower your total impressions—and as a result, your total clicks and sales. If you lower your product prices too much, you may get more conversions but ultimately your returns may be lower (if the increase in the number of sales doesn’t outweigh the reduction in order value).

In this article, we’re going to lay out practical steps you can take to earn a higher ROI on ads for your WooCommerce store and some extensions that will help you do just that.

Study your analytics to determine what to advertise

The first step you can take to improve the ROI of your ad campaigns is to take a deep dive into your analytics platform. By studying the overall performance of your store, you can see where you are having success. This will let you know which of the items on your site are most primed for advertisements.

Make sure you have the WooCommerce Google Analytics plugin (free, available at WooCommerce.com) installed. Then, in Google Analytics, go to Ecommerce > Product Performance. For each product, you’ll see the item’s total sales and the number of unique purchases.

Google Analytics showing revenue by product.

You can go to Acquisition > Google Ads > Campaigns. to see important metrics for your Google Ads campaigns. This includes clicks, total spend, CPC, conversion rate, transactions, and revenue. 

Google Analytics product metrics.

To take things a major step further, the WooCommerce Google Analytics Pro extension ($79/year at WooCommerce.com) adds advanced tracking to your store so all eCommerce events are pushed to your Google Analytics account. With this data, Google Analytics can accurately calculate important metrics like conversion rates, average order value (AOV), and sales by product (and channel). 

To analyze the performance of your paid traffic, go to Conversions > Ecommerce > Overview. The default segment will show the metrics for all website traffic. To add a segment for just your paid traffic, click the Add Segment box. Scroll down until you find the Paid Traffic segment. Check the box and click Apply.

Adding a segment with Google Analytics Pro.

On the overview tab, you’ll now see the eCommerce metrics for all your paid traffic channels. 

Segment performance displays with Google Analytics Pro.

Further down the page, you’ll see an overview of the Product Performance report. This lists the sales for each product and that product’s percentage of your revenue from paid traffic.

Product by percent of revenue.

The extension automatically generates the Shopping Behavior report, giving you a more detailed view of your visitors’ behavior. This will show you how they are moving through your site and how many are abandoning carts and checkouts.

You can see the exact pages your paid visitors are exiting from by going to Behavior > Site Content > Exit Pages. This will show you the total number of exits for each page and what percentage of viewers end up exiting the page.

Exits by page.

These insights can help you understand which areas of your customer experience you should consider improving—and, quite possibly, improving before you invest more in advertising. (Check out our articles on improving checkout flow and reducing cart abandonment for tips to shore up those aspects of your customer experience.)

Nurture your new customers

Most people simply aren’t ready to buy on their first visit to an eCommerce site. The average Google Ads conversion rate for eCommerce companies is under three percent. This means that even if you have an above-average conversion rate, you can still expect around 19 out of 20 visitors who click on ads won’t convert on their initial visit. You can improve the ROI from your campaigns by nurturing those visitors to ultimately bring them back to your store when they’re ready to finally make a purchase.

There are several ways to bring these ad visitors back. To start, you could create a remarketing campaign in Google or Facebook. These ads target individuals who have previously interacted with your store by displaying dynamic banner ads across Google and its partners’ websites or Facebook and Instagram, respectively.

Another way to nurture prospects into customers is to try to get visitors to sign up for your email list. You can then send them an email series where you introduce your brand and gradually build the relationship until they are ready to buy.

Automated emails are the key to those nurture sequences; a well-timed welcome series can help you take a curious prospect and turn them into a customer. There are a number of email marketing platforms that will allow you to send automated welcome series; we recommend AutomateWoo ($99/year at WooCommerce.com), which allows you to manage email marketing campaigns right from your WordPress admin. You can configure AutomateWoo to automatically collect email addresses from any signup forms currently on your site. To do this, you need to add the automatewoo-capture-guest-email CSS class to the form’s email field. If you are unable to add the CSS field to your email forms, you can add JQuery selectors using the automatewoo/guest_capture_fields filter and the following code:

<?php

add_filter( 'automatewoo/guest_capture_fields', 'my_guest_capture_fields' );

/**
* @param array $selectors
*/
function my_guest_capture_fields( $selectors ) {
$selectors[] = '#example-id-selector';
$selectors[] = '.example-class-selector';
return $selectors;
}

(Not sure where to put this code? See our article on adding custom code to WordPress for help.)

Once a visitor is on your list, you can nurture them with an email campaign. To create an email series, go to AutomateWoo > Workflows. Here you can set the trigger that will begin the email sequence. If you want to create a welcome series for new subscribers, you would set the trigger to New Guest Captured.

In the Actions tab, you can begin adding emails to the campaign sequence. The default email template will use the same style as your WooCommerce transactional emails.

Developers note: you could add your own PHP email templates as well! See the automatewoo_email_templates filter to insert your own.

Increase average order value

Another way to improve the ROI of your advertising campaigns is to increase your average order value (AOV). The idea is simple. If you hold your ad spend constant, earning, say, $100 per sale on average will lead to a higher ROI than earning $50 per sale.

The concept may be simple, but increasing AOV is a little more involved. Some of the best ways you can get your customers to spend more include:

  • Cross-sells: By suggesting relevant products to purchase alongside a specific item.
  • Upsells: By suggesting higher-priced alternatives.
  • Threshold-based incentives: Encourage customers to spend a certain amount to get something in return.
  • Bulk discounts: Customers who order a certain number of products can get a lower rate per item.

To get started on increasing AOV, check out WooCommerce Cart Add-ons ($29/year at WooCommerce.com), which adds product recommendations to the shopping cart page. This is a great place to display cross-sell related items to customers who are demonstrating purchase intent.

To configure the settings for the extension, go to WooCommerce > Cart Add-Ons. You can set the display title for the add-on products and choose the maximum number of products to show on the cart page. 

You’ll also need to configure which products display on which pages. For this, you can define rules on a category or product level to show a certain group of add-ons for that particular product or category.

Below is an example of a rule to cross-sell pants and a jacket to someone who has a t-shirt in their cart.

Cart add-ons example of adding related products.

You can set priorities for the rules to determine which will be shown when multiple rules are triggered. With the Default Add-Ons option, you can create a list of products to automatically show up as add-ons for every cart page.

The extension comes with several shortcodes you can use to display the product add-ons on any of your pages. For example, you can use [display-addons length=8 mode=images_name_price] to show the products’ names, images, and prices. You can also use [display-addons add_to_cart=1] to show products along with an AJAX add-to-cart button.

Moving on to upsells, the WooCommerce Checkout Add-ons extension ($79/year at WooCommerce.com) allows you to add paid extras to your checkout page. There are a variety of options you can use including tips, gift wrapping, and expedited shipping, among others. Subtle extras like these are a simple way to get customers to add to their purchase and can go a long way in boosting the value of your orders.

To set up a checkout add-on go to WooCommerce > Checkout Add-Ons and click Add add-on. Here you will create a Checkout Label and define the Add-on Field Type. For paid add-ons, your options are checkboxes, multiselect, or radio field types.

An example of setting up a checkout add-on.

The different field types allow you to define whether multiple options are available for the add-on. For example, if you wanted to offer multiple shipping add-ons like insurance and expedited delivery, you can use a multiselect field to enable customers to choose both options.

The Price adjustment field is where you define the cost of the add-on. This will be in the General tab for add-on types with only one option. For add-ons with multiple options, it will be in the Options tab. 

In the Display rules tab, you can configure the checkout add-on to only appear for orders within a certain price range. You can also choose to only display the add-on when certain products are in the cart.

Checkout add-on display rule setting.

By default, the checkout add-ons appear below the billing details. If you want to change their positioning, you can use the plugin settings or the wc_checkout_add_ons_position filter. Here is an example of how you can move the add-ons to display right after the order details:

<?php

// Reposition Checkout Addons to under Order Notes
function sv_wc_checkout_addons_change_position() {
return 'woocommerce_after_order_notes';
}
add_filter( 'wc_checkout_add_ons_position', 'sv_wc_checkout_addons_change_position' );

You can check out more strategies for increasing what customers spend at your site in our article on increasing average order value.

Use smart discounts

Discounts are an effective tool for increasing conversions—but coupon codes can affect your checkout flow. Requiring customers to remember a coupon code then enter it into a coupon field adds friction to the checkout process. Plus, research shows the presence of a discount field can sometimes lead customers away from your site right before they are about to make a purchase. Some users will open Google and search the web for coupons for your store. If they are unable to find any or get trapped in an internet rabbit hole, they may not return to your site.

A solution to this problem is the URL Coupons extension ($49/year at WooCommerce.com). With this extension, you can create a unique URL that contains a discount code, so when a shopper clicks on the link, the discount is automatically applied to their cart.

You have several options for configuring the URLs for your coupons. You could simply use pre-existing pages. For example, you could set your t-shirt category page to apply a discount for anyone who visits it. You can also choose to create a unique URL for your discounts.

Go to the General tab for the coupon. In the Unique URL field, enter the slug for the unique URL or the existing page.

Adding a URL coupon.

If the unique URL does not point to an actual page, you will need to set a page redirect as well. Find the Page Redirect field beneath the General tab and enter the name of the page for the redirect. 

Redirect a customer after using a URL coupon.

The plugin also gives you the option to automatically add products to the customer’s cart—which you can configure in the same place you set the URL and redirect. This is a highly effective tool for Google shopping ads. You can create discount links for your products and redirect customers straight to the cart page. The customer will then land on your website with the item they’re interested in already in their cart and a promotion applied.

If you choose to import your coupons into WooCommerce, the extension adds new fields so you can have your smart discounts set up automatically upon import. Below are the additional column headers:

  • url_coupons_unique_url 
  • url_coupons_redirect_page 
  • url_coupons_redirect_page_type
  • url_coupons_product_ids
  • url_coupons_defer_apply

Key takeaways

Digital advertising presents many opportunities for eCommerce businesses. Platforms like Google and Facebook have massive reach, making it easy to get in front of your target audience.

Because of this, digital advertising is becoming more competitive. With more competition, the cost of digital ads is increasing. This has an impact on companies’ bottom lines as they need to get more conversions or a higher order value to see a positive ROI.

Here are some steps you can take to improve the ROI of ads for your WooCommerce store:

  • Study your analytics. By studying your eCommerce analytics, you can get detailed insights into which of your products and categories are performing well and where you should focus your attention. It also allows you to see where on your site visitors are dropping off so you know which areas of your shopping experience need improvements. With the WooCommerce Google Analytics Pro extension, you can have your store automatically pass all important eCommerce data to Google Analytics.
  • Nurture new customers. Most customers aren’t ready to buy on their first visit. If you are able to bring these people back to your store, you can ultimately earn more for your ad campaigns. One of the best ways to nurture your customers is through an email series. With the AutomateWoo extension, you can create a welcome series for new subscribers directly from the WordPress dashboard.
  • Increase order value. The more you earn per sale, the higher your ROI will be. The best way to increase your AOV is to use cross-sells and upsells. These get customers to add extra products to their carts or choose more expensive options. With the WooCommerce Cart Add-ons and Checkout Add-ons extensions, you can easily add relevant products and extras to your cart and checkout pages.
  • Use smart discounts. Discounts can help increase conversions but having to type in a coupon code can inhibit the checkout process. With the WooCommerce URL Coupons extension, you can create URL-based WooCommerce coupons. When a customer visits the link, the discount will automatically be applied to their cart. 

The following extensions mentioned in this post are included at no additional charge in the GoDaddy Managed WordPress eCommerce hosting package:

  • WooCommerce Google Analytics Pro
  • AutomateWoo
  • Cart Add-ons
  • Checkout Add-ons
  • WooCommerce URL Coupons

Click here to learn more about GoDaddy’s WooCommerce hosting options.

Published by Bradley Taylor

Bradley is a content writer specializing in eCommerce and SaaS technologies. When he's not writing, he's building his eCommerce store Marquee Jewelry, or exploring the world of PC gaming.

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