Profit Margins & Real Revenue in Adobe Analytics: Part I

Erasing the Blind Spot of Marketing Measurement

Your Analytics Revenue is misleading— in some cases it is over 50% off. But not because of tracking errors! Start to understand your real Marketing performance: Analyze your Campaigns (and anything else people do on your site) by the actually invoiced Revenue and Profit Margin — all while staying within Adobe Analytics.

“Just half of what people ordered in the online shop actually turned into true bottom-line revenue (= the customer really paid for it)? So the data in Analytics is wrong? And aren’t we also sending false success signals to the Google Shopping and Facebook algorithms? Is it due to fraud? Or is it that customers buy products that are out of stock and orders have to be cancelled? And what? The 50% left were mostly products with a horrible profit margin?”

“Tracked Revenue” vs. “Actual Revenue”

The Blind Spot of Digital Marketing

A random example: Campaign Category 1 and 4 look like their ROAS was a lot better than Category 2. But it is actually worse if you look at the bottom line.
Actual Revenue divided by Tracked Revenue for several Product Categories for a random period in early 2020 (before Corona): Tracked Revenue is often a misleading compass.

Bidding Algorithms do what Bidding Algorithms do

Overcome the Limitations of Analytics and Leverage its Strengths

The Catalyst: Google Shopping’s Profit-based Bidding

“Margin / Ad Cost” vs. “Revenue / Ad Cost (ROAS)”: What is efficient ROAS-wise does not mean it is also efficient profit-wise

What makes “Tracked Revenue” less useful

1. People try to pay by invoice, but never pay or are rejected

Right column shows % of actual Revenue compared to tracked Revenue (left column) by payment method chosen. red = low rate.
Right column shows % of actual Revenue compared to tracked Revenue (left column) by payment method chosen. red = low rate.
Right column shows % of “Actual” divided by “Tracked” Product Revenue (left column), grouped by payment method chosen. Red = low rate. green = high rate.
11 Product Categories, number 3 compared by payment method

2. Stock Issues aka COVID-19 aka “this item cannot be delivered”

Tracking Out of Stock Status for can sometimes predict a low percentage of Revenue actually getting paid (=> products cannot be delivered)
Must-have: Alerts for Stock Issues and other indicators of wasted traffic

3. The Rest

Examples by Marketing Channel: Mind the Margin!

Tracked and Actual (Bottom-Line) Revenue even differs vastly by Marketing Channel!

The Marketing KPIs that really count

Marketing Channel Performance Metrics, Channel 1 and 3 broken down by Product Categories

Notes on “why is Actual Revenue lower than Tracked Revenue”?

Digital Analytics Expert. Owner of Creator of the Adobe Analytics Component Manager for Google Sheets: