Case Study - Car Art Business
From "only profitable in Q4" to "year-round ROI"
and now scaling up fast towards a big valuation
Patrick started this business 4 years ago, based on his own design skills.
What started with just 5 of his own designs grew into a real business over the first 2 years.
Q4 revenue more than doubled
"Rest of the year" 6.5+x Return on Ad Spend
The Story
Despite gaining traction – the business was only profitable during the 4th quarter of each year, which meant that serious business growth was impossible, and social ads despite seeming like a potential gold-mine never brought in much more than they cost.
The Goal
To set up the business for high-growth.
Consistent positive ROAS was the target – over 3x year-round to enable scaling of campaigns.
The Solution
Given that the only profitable ads to date had been during Black Friday & the build-up to Christmas – there wasn’t much useful insight to be gained from them, so we pretty much started from scratch.
The foundations were in place to make things work – great products, an easy-to-use website, and an audience who seemed very targetable (car fans, or friends/relatives of car fans)
Initial testing found that their higher-ticket Custom Artwork service, (tested across multiple locations and interests) was patchy and inconsistent in terms of purchases, but that the standard pieces showed promise – with some profitable audiences identified, and profitable retargeting in place.
On targeting – Selling products for a specific and passionate niche means that there are lots of potential targeting options – so we were able to test different combinations and find the profitable pockets.
On Creative – From testing initially broad copy with a variety of product images, we were able to identify strong performers early, and then further test variations to keep improving the Key Metrics over time.
On iOS updates – This business was always subject to a lot of ‘delayed attribution’ from paid ads, so when the iOS updates reduced our tracking and reporting abilities in Q1 of 2021 (meaning that the reported metrics in FB were consistently around 1/3 of the true figures), we switched to a broad-view measuring approach, using a combination of data from Google Analytics, Shopify, and user-generated responses (asking individual buyers where they found us).
The Results
Strong increases in profit across the board, and growth that has funded business expansion in terms of team & product verticals.
- Q4 2020 – 270% Increase in revenue
- Q1 & Q2 2021 – 970% Increase in revenue at 7.8x Return on Ad Spend
