Level Up! Level 3: Contribution Margin-Based Campaign Optimization
“Our ecommerce business can never be profitable due to the high costs of digital marketing and doorstep delivery!”
Does this position (sometimes fomented by the wholesale sales team and corroborated by finance) sound familiar?
It’s a valid concern, especially in the age of unprofitable DTC brand IPOs, and there’s only one way to respond. It requires proving positive contribution margin for every unique order with a complete and auditable profitability waterfall that incorporates cost of goods sold (COGS), marketing spend, and consumer-direct variable fulfillment and delivery expense.
Modern digital marketing requires that true contribution profit is measured and optimized as a return on ad spend metric — let’s call this CMROAS.
Leveling up your campaign optimization from ROAS and GMROAS metrics to true contribution profit per order requires granular and timely reporting of unit costs across marketing campaigns, value-added production workflows, and fulfillment and delivery. Sophisticated retail marketers incorporate these profit signals into their CMROAS calculations.
Let’s dig in to this important metric over at the SoundCommerce Blog.
Turnkey Marketing Insights and Action with SoundCommerce
SoundCommerce helps consumer brands act and think like Amazon, and that means starting with the fundamental data at the core of the retail model.
Our focus includes digital marketing as a key success driver, but not at the expense of operational conversion readiness (merchandising planning and supply chain concerns) and post-conversion shopper experience (doorstep fulfillment and customer service capabilities).
As we’ve extended the scope and reach of our data platform, our case studies show that consumer brands and retailers are still in the dark regarding where and how to best apply digital advertising dollars for maximum ROI.
SoundCommerce brings together real-time data at the unique source, medium, campaign, order and customer level to show you exactly where, how, and how much to spend to maximize profitable growth.
Contact SoundCommerce today to take charge of your data and accelerate your profitable growth!