Achieving 2,000% return on ad spend by outsourcing to an agency
Fellowes is an office solutions manufacturer headquartered in Illinois, US, selling in more than 100 countries around the world. In 1917, Fellowes started the business with the “Bankers Box” document storage box and, since around 1980, their lineup has also included shredders and laminators. Leveraging the knowledge and know-how Fellowes have cultivated through the long-standing office equipment business, they have expanded the scope to include the entire office, and currently also handle air purifiers and office furniture. Fellowes Japan K.K. has facilities in both Tokyo and Osaka and has secured a share of more than 70% of all sales of shredders and Bankers Boxes.
Fellowes Japan has been selling products on Amazon for about 10 years. In the spring of 2018, Fellowes Japan started advertising on Amazon to expand sales, provide active exposure, and attract customers to make the most of the Amazon site.
The challenge: Set a target ROAS of 1,300%
Initially, Fellowes Japan used in-house advertising, but as there were no internal personnel familiar with internet advertising, they felt that there was a limit to the extent they could optimize the advertising operations and thus considered outsourcing this to advertising agencies. In response to the challenges faced by Fellowes Japan, they formed a partnership with SoldOut, Inc. in October 2019, with the aim of not only improving human resources but also enhancing their portfolio for further sales expansion.
SoldOut Inc. is a web marketing support company that works to improve the sales of small- and medium-sized venture companies throughout Japan. With regards to Amazon Ads, it has a team dedicated to providing optimal planning according to the situation and requirements of the advertisers. Based on the knowledge and experience of this specialist team, rapid, careful, and detailed support could be expected, Fellowes Japan set the objective in its approach with SoldOut of achieving a ROAS of 1,300%, which is 1.8x the in-house operation.
The solution: Subdivide the advertising campaign to average out the sales distribution ratio
SoldOut first checked Fellowes Japan’s internal operations and tackled the issue of how to correct the imbalance in their portfolio, with the majority of sales composed of Bankers Boxes and small shredders. They then subdivided its advertising campaign settings based on categories and delivery to average out the sales distribution ratio.
By dividing product categories into Bankers Boxes, small shredders for home use, large shredders for business use, and office chairs, they were able to identify the issues facing each category. Two months later, after about a month of trial and error, they were able to solidify the direction of their policies.
Specifically, they used a combination of Sponsored Products advertisements on shopping results and product detail pages, Sponsored Brands, and Sponsored Display advertisements. They also implemented strategies to improve results by narrowing down measures, promoting campaigns with good results, and retaining keywords and targeting. In addition, SoldOut actively proposed improvements. For example, to capture the features of the products reflected in the advertising, they made efforts to adopt the user perspective by actually touching the products of Fellows Japan, and for office chairs with initially poor sales, placed Sponsored Product advertisements using images that captured its features on the store pages, leading to an improvement in sales.
In addition, SoldOut used daily campaign reporting to analyze results by day of the week so that ads in categories for which access was low on weekends were only visible on weekdays, thus providing efficient utilization of the budget.
SoldOut compiles its operations into a report on a weekly basis and reports this to Fellowes Japan. In a regular monthly meeting, SoldOut share changes in retail conditions, forecasts, and the situation facing competitors of Fellows Japan, with the aim of adjusting and optimizing the strengths and weaknesses of budget allocation.
The results: Achieved 2,000% ROAS through continuous improvement
By continually improving PDCA cycles along with the appropriate methods and sponsored ads targeting, they exceeded the target ROAS of 1,300% approximately three months after the start of operations. After 5 months, they achieved a ROAS of 2,000%, with sales at levels more than three times higher than at the start. As a result, interest in online services has increased within Fellowes Japan, which has led to a change in the way of thinking of the organization.
— Eiji Kato, Assistant Manager, Marketing Department, Fellowes JapanBy leaving advertising to an agency, the advertiser can spend more time and effort on content enrichment and spend/gains management. Therefore it is of my personal opinion that this will help them run ads on Amazon more efficiently.
Mr. Eiji Kato, Assistant Manager in the Marketing Department of Fellowes Japan, gave the following insights from SoldOut's efforts. “We are a small manufacturer and only have limited resources, so by asking an advertising agency to take care of the advertising and taking responsibility for Amazon myself to focus on the upstream as much as possible, we had leeway to tackle our business.”
Furthermore, Taketoshi Hoshino, a senior consultant at SoldOut Inc. who supports the web marketing of small- and medium-sized ventures, described the benefits of how they have been able to use Internet advertising, including Amazon Ads. “For organizations with limited human resources and funds, Internet advertising is a great promotional tool that lets you start with lower sums than with traditional advertising.”
— Taketoshi Hoshino, Senior Consultant of SoldOut IncWith Amazon Ads, it is easy to list products and ads, making it very useful for small- and medium-sized venture companies.