Do coupon incentives actually help increase your overall return? 

8.77 ROAS

8.69% CTR

$3.22 CPA

A curiosity to explore…

Iconswim., an e-commerce swimwear brand, wanted to better understand if coupon codes would help increase their already robust sales. More specifically, Iconswim wanted to determine if coupon code incentives for Facebook/Instagram ads help or hurt an e-commerce brand’s overall return on ad spend. With this curiosity, Iconswim partnered with Voy Media to see whether coupon incentives actually benefited client sales.

Client’s Goal

Determining whether coupon incentives will benefit or hurt Iconswim’s overall return on ad spend (ROAS).

➡️⬅️ A Comparison Strategy

Keeping in mind that Iconswim already has a successful product at an accessible price point, Voy Media was challenged to increase Iconswim’s already robust sales. To see which advertising campaigns performed better than the other, we compared two advertisements with different descriptions. 

We split test two Dynamic Product Ad campaigns against each other, one with a 30% off coupon code in the ad copy and one without. Then we published these advertisements within our target audience on Facebook. All other ad variables for Iconswim were constant.

Our Results

After splitting these 2 advertisement campaigns, the ad with NO COUPON performed significantly higher at 8.77 ROAS

The Campaign with NO coupon code:

  • 8.77 ROAS

  • $3.22 CPA

  • 8.69%  CTR

The Campaign WITH a coupon code:

  • 5.36 ROAS

  • $4.88 CPA

  • 7.38% CTR

As the results clearly show, the campaign with the 30% off coupon did not perform nearly as well as the campaign that had no coupon at all. The Click Through Rate is also surprisingly lower for the coupon campaign.

In fact, the difference in return on ad spend between the two campaigns is 38%, just about the size of the coupon code. The Cost Per Purchase was also 34% less with no coupon. The coupon was unnecessary and ultimately cost SwimWear Inc. a sizeable return.

For this brand, coupon codes were a detriment to their overall return and the decision was clear, no more coupon codes!


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