By implementing fully automated mid-funnel campaigns, we were able to efficiently run over 300 video ads. This approach yielded a strong conversion rate of 24 % based on mid-funnel clicks, compared to a mere 4.7 % for upper-funnel efforts. Additionally, the conversion rate based on impressions more than doubled. In comparison to the upper-funnel, our mid-funnel category campaign achieved a 178 % increase in return on ad spend (ROAS).
Our client
Thomann, with its online store for instruments and musical accessories, is the largest musical instruments retailer in Europe. Operating in over 23 countries, they offer more than 90,000 products, leading the e-commerce market and generating an annual revenue of over one billion euros. For Thomann, instruments, amplifiers, drumsticks, and more are not just a business; they are tools to nurture the passion for music.
Initial situation
The existing campaigns for Thomann on Facebook and Instagram primarily serve upper-funnel efforts for acquiring new customers. These campaigns are broadly targeted without constraints on specific audience or product categories. Furthermore, all upper-funnel campaigns are manually updated by our Sunlab experts. In the lower funnel, focused on retargeting, dynamic product ads are displayed through the Facebook algorithm. So far, there hasn't been a mid-funnel strategy in place. All automated campaigns, based on various categories, had been limited to holiday season campaigns.
Goal of the mid-funnel campaign
The approach used in the Christmas campaign, where ads are automatically displayed based on categories, is now being expanded throughout the entire year. For this purpose, a mid-funnel is created, which benefits from the advantages of our ad automation tool year-round. These benefits include time and cost savings, and increased effectiveness, both on our agency side and on Thomann’s side.
Challenges
Implementing this plan presented numerous challenges:
Defining categories
Determining the country allocation
Setting and distributing the budget
Defining target audiences for each category
Selecting and dynamizing the products to be promoted in each category
Creating ad content for all placements
Developing a dynamically usable data source
Utilizing the new features in the ad automation tool
Our approach
Targeting
The targeting for the category-based mid-funnel was planned to reach a mix of new customers (Lookalike Audiences of Custom Audiences) and existing customers (Custom Audiences of relevant categories or subcategories 2nd Level). This approach aimed to engage musicians looking for specific instruments and also non-musicians who might discover a new potential hobby.
The promoted categories were defined based on sales data and the performance of categories within existing social ads. Similarly, country allocation was determined based on sales data and performance of individual countries within existing social ads. Budgets were allocated considering the relevance of each category, performance across different countries, and performance of each placement.
Product rotation
A predefined two-week rotation of products was used to ensure greater variety within the ads, both in terms of price and musical category. The customers’ preferences were particularly taken into account, as Thomann highly values not repeatedly engaging users with the same content.
Scaling through automation
Despite the increased diversity in ads, our ad automation tool enabled significant reduction in human resources and graphic costs. Pre-defined ad templates were automatically populated and generated with dynamic content. This multilingual and automated campaign and creative setup simplified scaling. Due to the groundwork laid for the Christmas campaign and the new features of our automation tool, the creation effort for the funnel ads can be further reduced. Regular A/B testing of the ads is planned to enhance effectiveness by tailoring campaigns with user purchasing behavior. For instance, the conversion rate of an ad displaying the product name over the image could be compared with an ad without the product name.
Solution
Our ad automation tool creates fully automated video creatives based on a product data feed combined with pre-selected products. These videos are integrated with chosen product information and personalized with graphical elements. Consequently, the creation of all creatives is automated, eliminating the need for Thomann's team to manually intervene. Campaign setup is also managed without manual effort.
Using our ad automation tool, over 300 ads and 66 videos, each with 450 frames, are generated and updated with new products every 14 days. This technology brings innovative possibilities to the campaign and saves substantial time and manpower on both ends. Specifically, the developed mid-funnel comprises:
11 campaigns (one for each defined category, some categories partially grouped)
154 ad sets (6 languages - DE, EN, FR, ES, IT, NL; 3 placements - FB Feed, IG Feed, IG Stories)
336 ads (10 campaigns with 2 ad variants in A/B testing; one campaign with 4 ad variants in A/B testing)
On the technical side, a new feature was used for the first time, allowing dynamic composition of columns in the data source. This eliminated the need for direct references to individual columns such as "Budget_DE" or "Headline_ES," which frequently existed in different languages. This results in significant time savings.
Results and achievements
With the new category-based campaigns, we established a mid-funnel campaign that can be fully automated and run throughout the year. The relevant audiences continue to be populated through pixel tracking, and ads are refreshed every two weeks with pre-selected product feeds. As a result, new users are consistently reached with fresh ads.
Although the click-through rate (CTR) achieved is 50 % lower than that of the upper-funnel, this isn't surprising. The upper funnel primarily targets new customers, while the mid-funnel encompasses both existing and new customers. This means that potentially saturated individuals also fall within the target audience.
The conversion rate based on mid-funnel clicks is remarkably high at 24 %, compared to the upper-funnel's 4.7 %. These numbers highlight the effectiveness of category-based targeting. Even with a lower click-through rate, the ads mainly attract users ready to make a purchase.
The conversion rate based on impressions (0.05 %) more than doubled compared to the upper-funnel (0.02 %). Additionally, the ROAS of the category campaigns showed a 178 % improvement over the upper-funnel.
The campaign created through our ad automation tool provides a strong foundation to reach users with tailored ads throughout the year. Automation ensures that users always see new content in the ads, even with increasing frequency.
Next steps
The insights gained from the new mid-funnel setup will be adapted for Thomann's upcoming Christmas campaigns to further optimize them. Additionally, we aim to expand the automated setup to other platforms and clients to fully maximize its potential.
„With Sunlab, we have had a strong partner in the field of performance marketing for many years. Thanks to the automation of campaigns, we have been able to operate much more efficiently over the past years, especially during the Christmas campaign of 2021, and achieve excellent results."
Simeon Esken
Head of Marketing Communication, Thomann
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