Online retail advertising is unusual in how measurable it is and how easily that measurement misleads. Revenue is reported instantly and the costs that erode it, delivery, payment fees, returns and the discount that won the order, are not. An account can report an excellent return on spend while losing money on every sale. The first job in any ecommerce advertising engagement is establishing what you can actually afford to pay for an order.
Work in contribution margin, not revenue
Subtract cost of goods, shipping, payment fees, expected returns and discount from the order value, and advertise against what is left. Feed that value back to the platforms if you can, so automated bidding optimises toward profitable orders rather than cheap ones. Most accounts that look efficient and lose money are optimising against revenue.
Separate new customers from returning ones
Retargeting and brand campaigns largely reach people who already knew you, and counting them as acquisition flatters the whole account. Report new-customer acquisition cost separately, and consider running periodic holdouts to see what those campaigns genuinely add. This single separation changes most budget decisions for the better.
The feed and the product data carry shopping performance
Titles, images, identifiers, availability and attributes determine which queries you appear for and how you are compared. Feed work is unglamorous, has a direct effect on revenue, and is often outside an agency's scope by default. Establish who owns it and who checks it daily, because feeds break quietly.
Watch returns and stock alongside the advertising metrics
A campaign with the best reported return can be selling the product with the highest return rate or the one about to go out of stock. Report by product with returns included, and connect campaigns to stock so advertising stops on what cannot be shipped. Both are ordinary causes of a profitable-looking account that is not.
Questions people ask about advertising for ecommerce
What return on ad spend should we target?
One derived from your own margin, return rate and the share of sales that would have happened anyway. A target quoted without those is somebody else's business, and chasing it can mean declining growth that would have been profitable for you.
Which platform should we start with?
Shopping and search capture people already looking, which is usually the cheapest demand available, so most retailers start there. Paid social creates demand and needs creative volume, so it makes sense once there is a production pipeline to feed it.
How much creative do we need for social?
More than most retailers plan for, because performance decays as an audience sees the same thing. Agree a monthly number of new concepts, not just new images, and agree who produces them before the media budget is committed.
Should we bid on our own brand?
Usually yes, cheaply and defensively, and always reported separately. Mixed into the general account, brand traffic makes everything look efficient and hides whether the non-brand campaigns are earning their budget.