Campaign Optimization and Performance

The correct strategy is to add 'replica' and 'fake' as negative keywords at the campaign level to prevent these terms from triggering ads while maintaining budget allocation for qualified traffic.

Here's why this is the optimal approach:

The data clearly shows that replica/fake watch searches are severely underperforming:
- Conversion rate of only 0.1% compared to 3.2% for other terms (32x worse)
- Cost of $2,340 for only $180 in conversions (negative ROI)
- Consuming 22% of impressions and 18% of clicks that could go to qualified traffic
- These searchers have fundamentally different intent - they want counterfeit products, not luxury authentic watches

Adding these as negative keywords at the campaign level is the best practice because:
- It immediately stops wasting budget on irrelevant traffic
- Campaign-level negatives are appropriate when the terms are irrelevant to that specific campaign's goals
- It preserves budget that can automatically flow to better-performing search terms
- It's a targeted solution that addresses the specific problem without affecting other campaigns

Why the other approaches are less effective:

Creating a separate campaign for replica terms is misguided because these users are specifically seeking counterfeit products - they're not potential customers for a luxury retailer. The extremely low conversion rate (0.1%) proves they're not converting to authentic purchases. This would continue wasting money on fundamentally unqualified traffic.

Adding negatives at the account level is unnecessarily broad. Account-level negatives should be reserved for terms that are irrelevant across ALL campaigns. This campaign-specific issue doesn't require such a sweeping solution, and it reduces flexibility for future campaigns that might need different negative keyword strategies.

Modifying ad copy and monitoring for another 30 days means continuing to waste budget on clearly unqualified traffic. The data from 45 days with significant spend ($2,340) already provides conclusive evidence that these searchers aren't viable customers. Waiting another month would waste additional budget with no reasonable expectation of improvement, as the fundamental user intent mismatch cannot be solved through messaging alone.

The best recommendation is to apply the experiment variant as the primary strategy since the higher conversion value and customer quality justify the increased CPA when considering lifetime value economics.

Here's the step-by-step analysis:

BASE CAMPAIGN METRICS:
- 524 conversions at $42 CPA
- Total spend: 524 × $42 = $22,008
- Total conversion value: $87,360
- Average order value: $87,360 ÷ 524 = $167
- ROAS: $87,360 ÷ $22,008 = 3.97

EXPERIMENT VARIANT METRICS:
- 478 conversions at $48 CPA
- Total spend: 478 × $48 = $22,944
- Total conversion value: $98,540
- Average order value: $98,540 ÷ 478 = $206
- ROAS: $98,540 ÷ $22,944 = 4.29

KEY INSIGHTS:
1. The variant delivers 8% higher ROAS (4.29 vs 3.97) despite the higher CPA
2. The variant attracts higher-value customers ($206 vs $167 average value)
3. With similar retention rates and a 6-month LTV of $850, both campaigns are highly profitable
4. The variant generates $11,180 more in conversion value for only $936 more in spend
5. At 91% confidence, while not quite at the ideal 95%, the data shows a clear directional trend after 5 weeks

Why waiting for 95% confidence is not optimal: Given that the annual strategy needs finalization next week and the experiment has run for 5 weeks showing consistent superiority in conversion value and ROAS, waiting another 3-4 weeks would delay strategic decisions unnecessarily. The 91% confidence combined with the clear economic superiority provides sufficient evidence.

Why focusing on the base campaign's higher volume is misguided: While the base campaign delivers more conversions (524 vs 478), this ignores the fundamental principle of value-based bidding. The variant's superior customer quality and higher conversion value make it more profitable overall.

Why a hybrid approach is unnecessarily complex: Since the variant performs better on the metrics that matter most (conversion value and ROAS) while maintaining similar retention rates, splitting budget would dilute results. The variant should be scaled as the primary approach to maximize overall campaign value.

The correct approach is to adjust the bidding strategy to an automated bidding solution that optimizes for conversions at the target CPA.

Here's why this is the best choice:

Sarah's primary goal is clearly stated: increase conversion volume while maintaining her current cost-per-acquisition. This is a specific business objective that requires a solution directly aligned with conversion optimization at a stable CPA.

Automated bidding strategies, particularly Target CPA or Maximize Conversions with a target CPA, are specifically designed to achieve exactly this outcome. These strategies use machine learning to:
- Automatically adjust bids in real-time based on conversion likelihood
- Optimize for conversion volume while respecting CPA constraints
- Require minimal ongoing management once set up
- Deliver results that directly impact the stated business goal

Given Sarah's time constraint (limited time this week), automated bidding is also the most efficient choice as it works continuously in the background without requiring constant manual intervention.

Why the other options are less suitable:

Adding responsive search ads, while offering the highest optimization score increase (18%), is primarily focused on improving ad relevance and testing multiple ad variations. While this can eventually improve performance, it's more of a long-term testing approach and doesn't directly guarantee the specific outcome Sarah needs: more conversions at the same CPA. The score increase alone doesn't necessarily translate to achieving her specific business objective.

Expanding keyword coverage might drive additional traffic and conversions, but without proper bid management, there's no guarantee it will maintain the current CPA. New keywords could potentially increase costs without proportionally increasing conversions, which would work against Sarah's goal of maintaining her CPA while growing volume.

The recommendation that focuses solely on the highest score improvement without considering the business objective misses the critical point that optimization score is a means to an end, not the end itself. The goal isn't to maximize the score but to achieve specific business outcomes.