A book publisher
A book publisher sought to assess the impact of DSP on high volume, low average order value (AOV) products in terms of top-line profitability.
PointStory initiated the test with 347 best-selling titles priced between $8 and $12.
The testing period spanned 4 months from June 23rd to October 7th.
During this timeframe, we created and tested 4 cohorts of titles consecutively, aiming for a cost per acquisition (CPA) of less than $5.
Cohort 1: 347 titles
Upon launch, the initial cost per purchase was $13.43. However, within just 5 days, we optimized the CPA to $3.30, while maintaining a daily spend of $85.
Cohort 2: 99 titles
Encouraged by the early success of Cohort 1, we introduced Cohort 2 approximately 6 weeks after the first launch. We increased the ad spend by 300%, which initially led to a rise in CPA to around $9. However, by the fifth day of Cohort 2’s launch, we managed to optimize the CPA to $4.95 and achieve a return on ad spend (ROAS) of 2.45. Over the next 2 weeks, we gradually allocated more budget to both Cohort 1 and Cohort 2, resulting in a decreased CPA of $4.85. This expansion of our efforts allowed us to cast a wider net while enhancing returns. At this point, our daily spend increased to $1200.
Cohort 3: By the end of August, we introduced Cohort 3 alongside Cohort 1 and Cohort 2. We scaled up the spend across all three cohorts to $1800 per day, starting from $1200 on 8/28. Here’s where it gets interesting…
On August 29th, we further increased spend to $1800, which led to a reduced CPA of $4.98. By August 31st, we ramped up spend to $2000, and the CPA began to decline, reaching $3.74 with a ROAS of 2.89. Over the next 2 weeks, we continued to augment the spend to $2900 per day, maintaining a CPA of $3.69 and a ROAS of 2.88. In essence, we raised the ad spend from $200 to $3000 while improving the CPA from our initial cohort test of $4.95 to $3.69.
With an account-level cost per purchase (CPP) of $3.69, compared to our goal of $5 CPA, many would consider this a victory. At this point, we identified an opportunity to further decrease the CPP by eliminating titles with a CPP exceeding $5. During this optimization phase, we reduced the spend by over 50%, bringing it down to $1400 per day. As a result, we successfully reduced the CPP to $2.79.
But wait, there’s more! Once we optimized the first 3 cohorts, we launched Cohort 4 and immediately witnessed an increase in spend to $2800 per day across all 4 cohorts. The CPA remained at an optimal level of $2.06, yielding a total return of 5.26!
With our proven DSP tactics, this publisher sold an additional 47,979 books within just 4 months, achieving an average CPA of $3.03 and a ROAS of $3.86.
- Feb 20, 2021