Who is Magasinet.no?
Magasinet.no is one of Norway's most experienced operators in hunting, fishing and outdoor equipment and has become a natural choice among turf-like Norwegians. Since its start in 1991, they have built up a strong market position, with a well thought-out and wide range of products including both known brand products and their own quality products.
Challenge: ROAS did not give the full picture
With a large and varied range of products, it became increasingly difficult to know which campaigns and products were actually profitable. Many decisions were made on the basis of ROAS (Return on Ad Hand), but this measurement did not take into account real costs such as cost of purchase, discounts, payment fees, packing costs and shipping.
As a result, some products were found to be profitable but to a small extent contributed to actual profits.
Falling mines with ROAS:
- Budget often goes to lower-margin products
- You can lose money on orders, even if ROAS looks “good” out
- It is difficult to identify which products actually go into negative
Solution: POAS
To gain better insight and control over profitability, we helped Magasinet.no implement profit-based tracking. By replacing ROAS with POAS (Profit on Ad Hand), Magasinet.no was able to optimise advertising based on actual profits, not just turnover.
Together with Magasinet.no, we took several steps to increase profitability:
- Integrated cost data such as cost of goods, cargo, packaging and fees for obtaining full overview of actual margins.
- Added custom columns and labels in Google Ads that gave insight into profit and product margins.
- Changed focus from ROAS to POAS, so that optimisation was based on actual profit
- Split the campaigns by profitability to ensure smarter budgetary use.
This enabled us to see which products actually contributed to profit directly in Google ads.
Result: Smaller advertising budget, much better profitability
The transition to POAS and profit tracking provided Magasinet.no with a significant improvement in profitability despite the total budget for advertising being reduced by approximately 25%.
Before implementing profit tracking:
- More than 60 % of the advertising budget went to unprofitable products
- It was difficult to identify which products actually produced returns
After implementation of profit tracking:
- Only 11 % of the budget was used for unprofitable products
- Profit at advertising cost increased by a total of 1450 %
- Increased share of profitable sales and much more efficient use of the budget
With better insight into gross earnings, Magasinet.no changed the focus from turnover to profitability. Instead of spending the budget on products like “so good out on paper”, they could now give priority to those who actually gave the profit.
Business as a management tool
The transition to POAS has given Magasinet.no a deeper understanding of what actually creates profitability. Marketing is no longer about selling as much as possible, but about selling more profitablely.
Together, we build on the insight from profit tracking to control growth that actually produces results.