Ads by product, not by shop: where the budget should go
A shop wide ad campaign reports one total. Behind it, some products earn money from their ads and others lose it on every order. Here is how to split the budget product by product, and what to check each week.
Shop wide and automatic campaigns are easy to start: you set a budget and Shopee chooses which products to show. The trouble is the report. It gives one total for spend and orders, and that total can look healthy while the ads of some products lose money on every order they bring in. You cannot fix what you cannot see, so the first step is to look at the ads product by product.
Net profit after ads, product by product
| Product | Ad spend | Orders from ads | Net profit after ads |
|---|---|---|---|
| Product A | IDR 1.200.000 | 150 | IDR 2.550.000 |
| Product B | IDR 900.000 | 30 | −IDR 360.000 |
| Product C | IDR 400.000 | 40 | IDR 800.000 |
| All three | IDR 2.500.000 | 220 | IDR 2.990.000 |
Net profit after ads is the profit per order of each product after fees and product cost (A IDR 25.000, B IDR 18.000, C IDR 30.000), times its orders from ads, less its ad spend.
The shop total says that IDR 2.500.000 of spend brought 220 orders and IDR 2.990.000 of profit, which sounds fine. Product by product, B spent IDR 900.000 to make IDR 540.000 of profit before ads: each of its 30 orders cost IDR 30.000 in ads and earned IDR 18.000. C, on a small budget, kept IDR 20.000 an order after its ads. Moving budget from B to C, as far as the stock and searches of C allow, and fixing the listing or price of B before it gets ads again, is where the profit of next month comes from.
A healthy shop total can hide a product whose ads lose money on every order.
Where the budget should go
- Work out the profit per order of each product after fees and product cost. That is the most an ad can spend on one order before the order loses money.
- Put the budget on products with room: a healthy margin, stock to sell, and a listing that already turns visitors into orders.
- Start with product ads on exact match keywords taken from the title, at low bids, with a daily cap. Raise a bid only on keywords that bring orders.
- Pause a keyword once it has spent the profit of two orders without bringing one in.
Exact match keeps the budget on buyers who typed what you sell. Broad match and automatic campaigns find new searches, which is useful, but they also spend on searches that were never going to buy. Keep them small, check each week which keywords they spent on, and move the ones that brought orders into your exact match list.
Then review every week, product by product: ad spend, orders from ads and net profit after the ad spend. A product that stays above zero can take more budget; one that falls below it gets lower bids, a better listing or a pause. Sales from ads will not tell you this on their own, because a product can sell well through its ads and still lose money on every one of those sales.