How Bauhaus Reduced Lead Price by 64% in META Using a Customer Data Platform (CDP)
Solutions:
With the CDP, Bauhaus was able to reduce CPA from:
158.74 DKK to 57.31 DKK
About
In the realm of digital marketing, lead price is a critical measure of cost-effectiveness. If the price to onboard a new customer is too high, that is an indicator that you may not be reaching the right audience with a message that resonates with them.
This problem only becomes greater with the phase-out of 3rd party cookies (which is already in motion!), further limiting the ability to pinpoint and target users.
Bauhaus, a prominent name in home improvement and gardening, faced this challenge head-on in their retargeting campaigns in META.
The impact of the 3rd party cookie phase-out on Paid Media
Retargeting campaigns target individuals who have previously interacted with a brand but didn’t complete a purchase. These campaigns are effective because they focus on consumers who have already shown interest in a product or service.
However, paid media campaigns like these are seriously impacted by the phase-out of 3rd party cookies.
Many browsers and operating systems (including iOS, Safari, and Firefox) have already shut down your ability to recognize and target in their platforms – and Google’s 3rd party cookie restriction are planned to reach 100% by Q3 2024.
In other words, marketers have no choice but to shift their focus to 1st-party cookies if they want to target and retarget their users in Paid Media.
Solution
To regain lost retargeting prospects, a Customer Data Platform (CDP) is the only solution. A CDP connects and activates vast amounts of 1st party data and identifiers within your business, allowing you to retarget the users you lost due to the 3rd party cookie phase-out.
These users haven’t heard from you in a while. Once you regain your ability to target them again, this means that they are much more likely to engage and convert.
You not only achieve more conversions and a lower CPA. You will keep your marketing sharp even without 3rd party cookies.
Results
To reignite their retargeting campaigns, BAUHAUS decided to test META’s retargeting audiences against the audiences generated by Raptor’s Customer Data Platform. This would give them an idea of the kind of results 1st party data activation can create now – and how much more they can achieve in the future.
CPA reduction by 64%:
The use of the CDP brought down the CPA significantly from 158.74 DKK to 57.31 DKK.
Higher targeting accuracy:
The CDP’s data utilization led to more accurately targeted audiences.
Increased marketing ROI:
The lower CPA and improved targeting accuracy significantly boosted Bauhaus’s marketing ROI.
The results were clear. With the CDP, Bauhaus were able to reduce their CPA from 156.74 DKK to 57.31 DKK – almost one-third of the original cost.
By identifying and targeting their users more accurately in META, more of their users decided to convert, making each user much cheaper for Bauhaus to buy.
As impressive as these results are, they will only become better with time.
Google has just started the shut-down of 3rd party cookies, meaning that it will only become harder and harder to recognize the right users in the future. It reveals how inevitable is it to focus on 1st party cookies through a CDP – and how much damage your marketing will take if you don’t.
What’s ahead?
Apart from the retargeting project, Bauhaus are also testing several other new strategies, including brand-preference targeting and look-alike audiences.
A look-alike audience is created by identifying people who resemble, or “look like,” an existing customer base or audience segment. With this type of audience, Bauhaus can target users on social media who resemble some of their existing customers and hopefully convert them into buying customers with relevant advertisements.
Similarly, brand-preference targeting will allow Bauhaus to further personalize their advertisements based on the specific interests and preferences of their audience.
Key
take-aways
- Bauhaus’s integration of a CDP into their META retargeting campaigns dramatically reduced the Cost Per Acquisition (CPA) by 64%.
- Accurate targeting facilitated by a CDP not only lowers acquisition costs but also significantly boosts the overall Return on Investment (ROI) in digital marketing.
- Bauhaus’s future initiatives, including brand-preference targeting and look-alike audiences, highlight their ongoing commitment to evolving their digital marketing strategies.
Do you want to know more about this case?
