In 2020, COVID-19’s worldwide pandemic launched many brands into economic uncertainty. But despite the unknown, AFA Stores (a long-term Tinuiti client), was not only able to grow sales by +82% year over year (YoY) but they also significantly increased their ad spend (now spending more on Google Ads than ever before).
In the following Q&A, we ask Josh Norman, President at AFA Stores why he decided to partner with Tinuiti and how the company has been able to scale its business significantly on all GA channels by +65%.
The History of AFA Stores
AFA Stores offers 50,000 products from nearly 100 brand names including pieces for bedrooms, entertainment areas, home libraries, dining rooms, kitchens, bars, home offices, and foyers. Brands like Fine Furniture, Hillsdale Furniture, Pulaski, Lexington, AICO, ART Furniture, and Parker House all manufacture some of the finest furniture and you can find it on AFA Stores at low prices.
Thanks to a company referral, AFA Stores discovered and later decided to partner with CPC Strategy (now Tinuiti) almost 8 years ago.
Q. Let’s talk about Q4 2020. What specific strategies led to AFA Stores’ success?
Norman: Initially, we started out in comparison shopping and gradually moved into other areas. As a long term client, we’ve worked with a couple of different account managers but mostly with Erick Smith, Sr. Manager, Growth Media at Tinuiti.
In 2020 we experienced a huge lift in sales – likely a result of the pandemic and so many people being home and choosing to buy furniture online vs. shop in-store. Today, we have a wider demographic that we’re targeting and we’ve able to convert. From a business perspective, 2020 helped to open up our business to customers we were not able to reach prior.
Here’s a closer look at the results for AFA Stores in Q4 2020:
- Revenue on Google Ads increased +82% YoY
- The growth on GA for all channels increased +65%
“For AFA Stores, paid advertising generally touches roughly 75% of their total business. Our strategy was to run a mix of Search and Shopping ads (primary on Google). The ad build that’s currently in place heavily leverages brand-specific ISO shopping campaigns. We’re also targeting brand names as well as brand + collection terms for all of the major brands they carry. The idea is to have as much coverage as possible because if people are searching for a furniture brand by name, they’re serious buyers, and we want to be seen.”
– Erick Smith, Sr. Manager, Growth Media at Tinuiti
Pro-tip: ISO Shopping campaigns leverage priority settings and negative keywords to isolate and allocate more aggressive bids and budget to certain high-value searches. This advanced strategy gives advertisers more control over which search queries their products show up for. It also allows them to isolate and dedicate budget to search queries that historically convert well.
Q. AFA Stores experienced significant success in 2020, but was there any concern about how COVID-19 would impact the business?
Norman: Our account manager at Tinuiti encouraged us to stay calm as we approached the pandemic. The strategy was to not overreact and remain flexible in our approach to accommodate the increase in demand. We actually increased our spend quite a bit during this time.
Erick was very accessible and receptive throughout the year. Right along, he’s been able to work through major shifts in the company (including the loss of one of our biggest vendors). This allowed AFA Stores to confidently navigate these hurdles and continue to increase spend.
Q. What’s top of mind for you today?
Norman: From a year-over-year perspective, it’s a little difficult to measure success because 2020 was such a unique year for everyone. That being said, we are continuing to grow. As always, we monitor our cost of acquisition to make sure it is always healthy. Our ad spend is the highest it has ever been (as well as our sales) but ultimately our goal is to beat our 2020 sales by 30% this year.
Q. Can you offer any tips for businesses in 2021?
Norman: I primarily focus on our cost of acquisition. The majority of my conversations with Erick are about this and trying to figure out where we want to go. In my experience, I’ve found that many companies don’t focus on this metric, and instead, they focus too much on a fixed budget (aka create a budget in their mind for what they think ad spend should be). But in reality – spend is kind of irrelevant.
Erick and I have this joke, I’ll say: Go ahead and spend a trillion dollars this month, just find a way to make a 10x profit! Overall my biggest piece of advice to ecommerce brands is don’t be afraid to increase your spend and take some risks in 2021.