Retail and direct to consumer
Online retail, where margin decides everything
Retail advertising is a ruthless exercise in unit economics and feed hygiene. If you optimize to top line revenue without factoring in returns, shipping, and cost of goods sold, you are likely buying unprofitable sales at scale.
The arithmetic
The blended ROAS trap
Most ad platforms want you to manage an e commerce account to a single metric: Return on Ad Spend (ROAS). This is presented as a blended average across the entire catalog. It is a dangerous way to run a retail business.
The fundamental problem with blended ROAS is that it ignores contribution margin. If you sell a high margin accessory and a low margin appliance, hitting a 3x return on the accessory makes you money, while hitting a 3x return on the appliance might put you in the red.
When you let an algorithm optimize for blended ROAS across mixed margins, it will naturally gravitate toward the products that are easiest to sell, which are often your loss leaders or highly discounted clearance items. The platform reports a glowing return, but your bank account tells a different story.
We structure e commerce campaigns around margin tiers. We group products by their actual gross margin and set distinct targets for each. We also account for average return rates. A conversion is only valuable if the customer actually keeps the product.
The Foundation
Your shopping feed is your targeting
In paid search and Performance Max, you do not bid on keywords for your products. You submit a feed, and Google or Microsoft decides when to show your items. Feed quality dictates auction success.
-
01
Title structuring
An algorithmic match relies on the product title. We rewrite feed titles to front load the most critical attributes (brand, gender, product type, color, and size), matching the exact syntax your customers type into the search bar.
-
02
Custom labels for business logic
We use custom labels to pass business data back to the platform: identifying clearance items, top sellers, high margin products, or seasonal inventory. This allows us to bid aggressively on winners and suppress budget on slow moving stock.
-
03
Error resolution
A feed full of warnings is a throttled feed. We actively monitor Google Merchant Center and Microsoft Merchant Center to clear GTIN errors, resolve policy flags, and ensure your entire catalog is eligible to serve.
Channel mix
Demand capture versus demand creation
E commerce requires a deliberate balance between capturing the demand that already exists and creating the demand you need for tomorrow.
Demand capture is Google Shopping and Microsoft Ads. These people are actively looking for a specific product. The strategy here is intent management: showing up for the right queries, aggressively pruning the wrong ones, and presenting a price and image that wins the click.
Demand creation is Meta (Facebook and Instagram) and native display. These people were not looking for you until your creative stopped them. The strategy here is thumb stopping visual assets and rapid creative testing to find the angles that convert.
The mistake is treating both channels the same way. Search requires structural rigor; social requires creative volume. We start by maximizing profitable capture on search, then use those profits to fund demand creation on social.
Seasonality
Surviving the retail calendar
E commerce is not a flat line. It is a series of quiet periods punctuated by violent spikes in demand.
Black Friday, Cyber Monday, and industry specific seasons warp the auction. During these windows, cost per click spikes, conversion rates jump, and historical data becomes momentarily useless.
If you wait until November to adjust your targets, you have already lost. We prepare for seasonal shifts months in advance by building remarketing pools, testing creative variations early, and banking budget for the days when conversion rates peak.
- Margin The only metric that dictates your bidding ceiling
- Returns The silent variable that ruins a reported ROAS
- Feed The data layer that controls your Shopping visibility
Common questions
E commerce advertising FAQ
What is a good ROAS for e commerce?
There is no universal benchmark. A "good" ROAS depends entirely on your gross margin. If your margin is 25%, you need a 4.0 ROAS just to break even on ad spend. If your margin is 60%, a 2.0 ROAS might be highly profitable. We calculate your specific break even point before setting any targets.
Should we run Performance Max (PMax) campaigns?
Performance Max can be highly effective for retail, but it requires guardrails. Left entirely to its own devices, it will often over claim branded search conversions or waste budget on poor quality display inventory. We run PMax alongside strict negative keywords and brand exclusions to ensure it drives incremental growth.
How do you handle out of stock products?
We link your inventory feed directly to the ad platforms. If an item drops out of stock, the ads for it pause automatically. Advertising products people cannot buy is the fastest way to burn budget and frustrate potential customers.
Do you manage Amazon Ads as well?
No. We focus exclusively on Google, Microsoft, Meta, and programmatic display. Amazon operates as a distinct marketplace with entirely different ranking factors and organic interplay. We prefer to do a few things exceptionally well.
Next step
Find out what your account is wasting
Send us access and we will come back with a written audit: where the budget is leaking, what it is costing you, and the three fixes worth doing first. No charge, no obligation.