Connecting Margin to Real Time Bidding to drive Toolstation’s Online Growth

Kinase helped Toolstation improve Smart Bidding by integrating margin into target ROAS - delivering 3x profit year on year.

The home improvement and DIY sector experienced increased demand in 2020 and Toolstation ensured they were able to capitalise on this trend and grow their share of the market during a period of rapidly changing customer behaviour.

Challenge

Toolstation tasked Kinase with improving the return on PPC spend by optimising more closely to margin data. With over 20 thousand products covering a wide range of margins there was an opportunity to increase true ROI and the scale of activity.

Solution

Kinase proposed testing a novel use of Google Smart Bidding combined with Kenshoo’s signal enhancement solution to pull margin data into Google Ads. Smart Bidding’s machine learning would then optimise to imported ROI data in real time to drive increased profit. The test was run with a 50/50 split.

Kinase deployed a bespoke combination of Kenshoo’s signal enhancement and Google’s smart bidding. Product margin data fed into Kenshoo is then passed to Google as a signal to layer into the existing smart bidding real time solution. Kinase worked closely with Kenshoo on this data connection to ensure that the combination with Google would work and that Toolstation data would be processed smoothly.

Results

The results were conclusive; compared to a standard tROAS implementation ROI increased by over 10% for the test group with search campaigns driving a 72% increase in margin revenue. The strategy was then fully adopted for November’s peak period, driving a 168% increase in ROI and 333% increase in profit year on year.

For Kinase as well as Toolstation, the most important learning from the test was that innovative use of data is the key to unlocking the potential of digital channels to help businesses grow faster and more efficiently. At a time when channel specific tools like smart bidding are levelling the playing field for many advertisers, this shows the importance and value of continuing to innovate in search of competitive advantage.

“Kinase devised and delivered an excellent initiative for Toolstation’s paid search by connecting our rich margin data to real time bidding in advance of our peak trading. Whilst we anticipated good results and that lots would be learned in what had been an extraordinary year in our digital growth, the results were exceptional and particularly interesting around our Search campaigns. The ROI impact was notably better than we expected and we were happy to roll out Signal Enhancement x Smart Bidding across our entire account once the test had concluded.”

— Ryan Hill, Head of Digital, Toolstation