How IKEA decreased CPC by 23% in 3 months

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About IKEA 

IKEA is a Swedish-founded, Dutch-headquartered multinational conglomerate that designs and sells ready-to-assemble furniture, kitchen appliances, and home accessories, among other goods and home services.

Fun fact -> The name IKEA is actually an acronym. The letters stand for the founder's initials (Ingvar Kamprad), the initial for the farm he grew up on (Elmtaryd), and the town the farm was in (Agunnaryd, Sweden).

The Challenge 

IKEA is using different digital marketing strategies for various platforms, however, optimizing  data across channels for product listing ads became a time-consuming process. Their optimization in the feed was based on excluding non-performing products and fixing item errors. The process was being done according to different channels’ requirements manually, but it was soon found to be inadequate:

• Low prioritization from the IT department to react to immediate changes in the product feed, because of their existing workload 
• Extra effort requirement while managing separate channels manually 
• Need to automatize and advance performance-based segmentation in the product feed - leverage custom labels

The Action 

The first action was to detect possible errors so that IKEA minimized the disapproved items at various channels. Once possible errors are discovered and corrected, the main focus shifts to increasing ROAS. By integrating Google Analytics and different data sources, IKEA started performance optimization based on their priorities.

1- Filtering-out high traffic, zero conversion products automatically based on Google Analytics data

2- Removing seasonal products & products that are not wanted to be advertised to boost ROAS and make the ads in-line with the strategy

3- Creating error-free product data for various channels

• Modifying price format based on channels’ needs
• Creating Google Product Category field to enrich data and to benefit from the category segmentation
• Filling in the missing fields and cells at the product feed

The Result 

IKEA detected that 12% of products were wasting budget by analyzing Google Analytics data. By fixing errors in the feed, and excluding products automatically that are wasting budget, they increased their revenue by 100% in three months. Additionally, they decreased their CPC by 23% and increased ROAS by 26%.

With the CRwizard tool, our time has become more efficient, especially for product specific ads. The performance of our marketing spend has increased by 26%. With marketing now in control, we are able to avoid IT developments and export directly high-performing feeds within 24 hours. - Semih Parlak, Digital Operations Manager

‍Next 

The partnership will focus on developing Facebook feeds and optimizing ad performance. Additionally, feeds that will be used in various marketplaces that require distinct feed patterns will be effortlessly produced with Crwizard. 

In the long run, inventory data will be added as an additional data source.  Various enhancements will be carried out at this step, depending on the quantity of stock and availability percentage.