GMV Max Ads Optimization

Ads Strategy

GMV Max Ads Optimization

             A client contacted me to take over the management of their private label account, including affiliate marketing and ad campaigns. After reviewing their account, I found that over 500 creators had promoted their products, but the GMV max campaigns were not performing well. Their cost per order was $20, while their profit margin was only $15 per order, which meant they had been operating at a loss for the past 2-3 months. They were expecting the cost per order to decrease on its own, which was a critical mistake.

When I looked closer at their campaigns, I noticed that their ROI was set to 5. I asked them why they had chosen this, and they explained that TikTok Shop had recommended setting the ROI to 4. To clarify, campaign suggestions typically set your ROI between 3 and 5, around 90% of the time. But if you set it too low, you end up spending more, which drives the cost per order up to around $15-$20.

Here’s what I did to improve their results:

1. First, I increased their ROI from 5 to 19, which brought their cost per order down to $3-$4. Although the number of orders dropped slightly, they were no longer losing money and were now profitable.
2. I also paused the campaigns with only a small number of creators promoting the product. These campaigns were costing too much in relation to the small number of sales they were bringing in.
3. Finally, I advised them to let the campaigns run for 6-10 days to stabilize, and now, the results are excellent.

Key Takeaways:

• Don’t just rely on the suggested ROI. Start with an ROI of 19.
• If your spending is low, you can reduce the ROI by 10% gradually, adjusting until you reach an ROI of 10 if sales are slow.
• However, if your sales are performing well at an ROI of 19 or 15, there’s no need to lower it further.