We have seen our fair share of eCommerce stores making the huge mistake of seeing paid advertising as a quick fix for driving more traffic and sales. It’s a regular occurrence that many dive headfirst into Facebook and Google ads without truly understanding their baseline store performance. This lack of insight can sink your paid ad ROI.
Attempting paid campaigns without knowing your conversion rate, average order value, and customer lifetime value is incredibly risky. You might drive more visits, but what portion actually converts? How much does each customer spend? Are your ad costs higher than the long-term value received?
Launching paid ads without knowing your baseline metrics can waste budget fast. A temporary boost in traffic and sales won’t drive real growth if your underlying store economics don’t support the ad spend. Forecasting based on your current conversion rate, order value and customer lifetime value will give an insight into whether paid ads could profitably scale your business. Don’t forget to factor in management fees too.
If the numbers don’t clearly work yet, paid ads risk being a money pit versus an engine for growth. Optimise your core metrics first before deploying the budget into the uncertainty of paid campaigns. The key is determining whether your current performance can absorb and benefit from the incremental traffic and customers that paid ads deliver. If not optimised yet, pause on paid and focus on lifting conversion, order value and loyalty first.
Three metrics you need to look at before investing in paid ads:
Understand what % of visitors convert now, so you know what lift to expect from paid traffic. A higher conversion rate means more revenue from the same traffic. Best practices like optimised page copy, trust badges, exit intent popups, and cart abandonment emails can lift conversion rates.
Average order value
See what customers spend on average currently to estimate potential revenue. Increased AOV boosts revenue per sale. Strategies like cross-sells, upsells, discounts, post-purchase strategies and bulk order discounts help grow AOV.
Customer lifetime value
Calculate existing customer value over time to assess paid ad profitability. High CLV customers make profitable ad targets. Loyalty programs, customer win-back offers, and exclusive product drops/news encourage repeat purchases.
Take the time to monitor and optimise these core metrics first using proven tactics. Once you have a solid baseline, you can confidently layer on paid strategies knowing the incremental value they drive. The data will tell you how much to spend, on whom, and where to get the highest returns.
Improving conversion, AOV, and CLV increases profitability across all channels. The same visitors, sales volumes, and ad spends become more valuable. It’s the compounding effect of optimised conversion, order value, and loyalty.
Don’t let the promise of paid ads lead you to endanger your budget. Build a stable performance foundation using best practices, then thoughtfully expand from there. This is the key to paid success.
Contact us about our Shopify Growth plans. Gone are the days of paying £1,000’s for a digital marketing agency. Invest in an agency that can deliver optimised paid campaigns and further develop your store for growth.
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Don't Get Left Behind - Upgrade Your Store to Shopify and Grow