CBD Google Ads Case Study: How We Sold CBD & THC Edibles Online at a CPA of $77 USD
In this latest case study from ColaDigital.ca’s cannabis & CBD marketing team, we outline how we started with a CPA of $136.22 after the first 30-days of a Google Ads campaign and were able to lower the CPA to $77.41 (-47%!) 60-days later, using our expert Google Ads strategy for cannabis and CBD products.
For this project, we conceived and implemented a customized Google Ads search campaign for our client’s line of CBD & THC edibles.
This case study will focus on the first 90-days of the CBD Google Ads campaign.
CBD Client Background
We are under an NDA with this client and are currently managing an active Google Ads campaign for CBD products. Therefore this client will remain anonymous.
We can share the following about this client:
- They are based in the USA and we’re targeting qualified people regionally.
- The client sells CBD products online to people in the United States exclusively.
- Their product line includes hemp-derived CBD oils, capsules, oral sprays, edibles, and CBD topicals.
- The target demo for this business is men & women between 45-64+ years of age.
- The goal of this campaign is to increase online sales in the USA for THC & CBD edibles with a CPA of $75 or less.
CBD Case Study Executive Summary
The campaign started in November 2019.
Here are the most recent stats from the Google Ads Campaign for January 2020, as compared to December 2019. To view the individual stats from each month, please see the sections below.
- 1.1K Clicks from Google Ads (+17%)
- 14% Click-Through Rate (+12%)
- 39 Conversions – Online Orders/Sales (+95%)
- 3.6% Conversion Rate (+66%)
- $77.41 Cost per conversion/acquisition – CPA (-47%)
Google Search Advertising For CBD Products: 90-Day Campaign Overview
This Google paid search PPC campaign, designed to sell THC & CBD Edibles online in the USA, started on November 1, 2019, and is still active and growing strong at the time of this writing.
The data below is focused on the CBD marketing strategy for the first 90-days of the campaign, November 1, 2019 – January 31, 2020.
CBD Google Ads Campaign Month 1: November 2019
The first month of any Google Ads campaign for CBD products is rarely ever profitable.
Typically, the first month of a CBD Google Ads campaign consists of a lot of testing in terms of:
- targeted keywords
- ad copywriting
- audience targeting
This always usually results in higher costs per acquisition (CPA) but provides your Google PPC search marketing company and yourself with a ton of valuable user-data collected in Google Ads manager as well as in your site’s Google Analytics.
This user-data that is collected helps us significantly with tweaking the Google Ads campaign, CBD keywords, ad copy, and audience targeting. Here is the Google Ads report for Month 1 of this campaign.
Google Ads Report – Month 1 – November 2019:
Month 1 – November 2019 – Summary:
- As you can see, our Google Ads campaign resulted in under 1,000 clicks at an average cost per click of $1.54.
- the most popular keywords were variations of “buy edibles” ($1.08 CPC) and “edibles online” (2.14 CPC)
- We were able to get 11 conversions/online sales of CBD edibles in the first 30-days at a conversion rate of 1.1% and a CPA of $136.22.
- We realize the CPA is high, but you need to remember this was the first month of a brand new Google Ads campaign for this client’s CBD products.
- We started blind, from scratch, but still sold 11 online orders. Not bad, but we can and will do better. See the Month 2 report below the month 1 KPIs that follow.
Month 1 – November KPIs:
- Clicks: 975
- CTR: 9.9%
- Conversions: 11
- Conversion Rate: 1.1%
- CPA: $136.22
- Average CPC: $1.54
- Average CPM: $152.41
- Total Spent: $1.50K
Month 2 – CBD Google Ads Campaign: December 2019
The second month of this CBD & THC edibles campaign was in December. A month that is barely even really a month – a full 30-days – due to how the holidays affect many things in people’s lives.
Another thing to remember when it comes to Google search campaigns and average CPCs in December is that Q4/holiday pricing and fees are always more expensive based on the demand for online shopping and online sales.
Google Ads Report – Month 2 – December 2019:
Month 2 – December 2019 – Summary:
- You’ll notice that went down in Month 2, but the click-through rate increased (+23%).
- Online sales conversions increased (+67%), and the conversion rate increased (+80%) from month 1, but CPA also increased by +13.4% to $145.16.
- December was not the best month for this campaign – but the good news is we were able to collect more user-data and therefore were able to learn more about our audience.
- We used this data to optimize the campaign to achieve all client goals in Month 3 which you can see in the section below the month 2 KPIs.
Month 2 – December – KPIs:
- Clicks: 936 (-7.5%)
- CTR: 12.2% (+23%)
- Conversions: 20 (+67%)
- Conversion Rate: 2.1% (+80%)
- CPA: $145.16 (+13%)
- Average CPC: $3.10 (+104%)
- Average CPM: $377.44 (+151%)
- Total Spent: $2.90K (+89%)
Month 3: January 2020 Google Ads
This was when we were able to lower CPA by 47% to $77.41 – only $2.41 more than our client’s goal of a $75 CPA!
In our 3rd month of using CBD google ads to sell CBD products online, we also increased clicks by +17% and our conversion rate by 66%!
Google Ads Report – Month 3 – January 2020:
Month 3 – January 2020 – Summary:
- Month 3 of a Google Ads campaign is typically when we see the best results out of the first 3-months because of all the data analysis and campaign tweaking we implemented in Month 2.
- If we didn’t learn about our target audience using the data collected by Google Ads and Google Analytics, we would NOT have been able to lower the CPA from $145 to 77$ in just 30-days.
- Reading the data, understanding the data, and knowing how to use the data to effectively optimize and tweak CBD advertising campaigns are the most important factors to success with Google ads for CBD products.
- To achieve these results for your own business, we highly recommend you hire an agency or an individual with deep insight and experience with optimizing Google ad campaigns for CBD products.
Month 3 – January 2020 – KPIs:
- Clicks: 1.1K (+17%)
- CTR: 13.6 (+12%)
- Conversions/Online Orders: 39 (+95%)
- Conversion Rate: 3.6% (+66%)
- CPA: $77.41 (-47%)
- Average CPC: $2.75 (-11.4%)
- Average CPM: $373.27 (-1.1%)
- Total Spent: $3.02K (+4%)
What Did We Do To Lower CPA on Edibles by Almost 50%?
So what did we “do” to achieve this and how can you do the same for your Google ad campaigns for CBD or THC edibles?
Step 1: Know Your Audience Well
If you know who’s interested in buying your CBD products, you’re better prepared when setting up your Google Ads campaign.
If you’re monitoring your campaign’s search terms audience data and closely, you’ll quickly be able to identify trends in demographics, and more importantly, in the online interests of your most qualified site visitors.
This allows you to strategically make data-driven updates and changes to your keyword match type strategy, your audience targeting, your advertising copy, and your calls to action.
Ultimately this type of campaign management and tweaking helps you lower your average CPCs and in turn lower your CPA on certain CBD products.
Step 2: Be Patient – These Things Take Time
At this point in time, profitable ROI when using Google ads to advertise CBD can take around 3-months or more, depending on your daily media spend.
Essentially, the way it works with Google ads for CBD is that the more you spend per day in media, the more impressions your ads will receive, which will, in turn, leads to more clicks to your website or landing page.
The more people you get to your website, the better the chance you’ll be able to increase website conversions. Whether your conversions are (a) capturing email addresses, or (b) online sales.
Regardless of how many people you get to your online store from your Google CBD ads, not everyone will complete a purchase on their first visit.
This is why building a website conversion funnel and retargeting all of your site visitors with display ads on popular websites needs to be part of your overall CBD advertising strategy.
Step 3: Continually Tweak to Target Your Campaign Effectively
Keep in mind that the above steps will only be effective for your CBD business if your Google Ads campaign is set up and targeted properly.
Keyword selection & audience targeting are super important factors for success. There are a ton of free and paid tools to help identify key variables to help you optimize these vital elements in your ad campaign.
The key to a successful Google Ads campaign for CBD products is to ensure you hire an experienced, data-driven CBD search marketing professional to set up and manage your:
- Overall campaign strategy
- Keyword Selection
- Keyword Match Types
- Ad Copywriting
- Audience Targeting & Retargeting
- Monthly media spend/advertising budget
Step 4: If You Don’t Measure Results, Did The Campaign Even Happen?
Campaign measurement and daily check-ins should be at the top of the daily to-do list for any Google ads campaign manager, especially when running ads for CBD products.
Daily campaign management helps you understand and see trends in user-search terms, your targeted keyword mix, and the CPCs you’re being charged.
Diligent CBD ad management helps you reduce your campaign costs by spotting irrelevant search terms that need to be added to your campaign’s negative keyword list.
Furthermore, it helps you eliminate unprofitable keywords and maximize your bids on profitable keywords!
We Can Help You Manage Your Google Ads For CBD Products
If you’re ready to take your CBD marketing to teh next level with targeted Google Ads search campaigns for tinctures, edibles, or other CBD products, please contact us for a free 30-minute phone consult or email us to request a quote.
We’re Ready To Help You Grow!