How Ajio Optimized Advertising Spend to Achieve 2.25x ROAS Growth

Managing millions of products in its inventory with varying performance, Ajio’s team faced a significant challenge: optimizing ad spending to maximize revenue across their catalog. 

Through a detailed analysis of product performance data with ROI Hunter’s Product Insights, the team uncovered inefficiencies in their spending patterns on Meta Dynamic Ads. This led them to focus on two key goals:

• Allocating budgets effectively to prioritize revenue-generating products.
• Minimizing inefficient spending on underperforming products.

In collaboration with ROI Hunter, Ajio team implemented a data-driven approach using ROI Hunter Segments to address these challenges. Two targeted strategies were designed to achieve their objectives.

Strategy 1 - Limiting "Bad Products" via "Stop-loss" Strategy

Ajio team identified poorly performing products as those with ad spends exceeding ₹30,000 but delivering a ROAS below 0.5. These products were systematically excluded from high-priority dynamic ad campaigns, reducing inefficient spending. The saved budget was redirected to higher-performing products, as detailed in Strategy 2.

Products spending above 30 000 INR monthly, with ROAS under 0.5

Strategy 2 - Prioritizing "Good Products" via the "Bestsellers" Strategy

The Ajio team created a segment of its top-performing products by identifying the top 5% of revenue-generating items across all traffic sources. 

Products generating top 5% of revenue

These “Bestsellers” were prioritized in both ongoing and new campaigns, ensuring that ad spend was directed toward products with proven revenue potential. Over time, this approach improved the effectiveness of Meta ads, allowed Meta's algorithm to promote relevant products, and increased ROAS.

Strategy 1 - Limiting "Bad Products" via "Stop-loss" Strategy

• From 2022 - 2024, the percentage of underperforming products in campaigns dropped by 70%, significantly reducing inefficient ad expenditure.
• By eliminating inefficient spending, Ajio reallocated funds to high-performing products, enhancing overall campaign efficiency and cost-effectiveness (see strategy 2)

Strategy 2 - Prioritizing "Good Products" via the "Bestsellers" Strategy

• From 2022 to 2024, ad spend on best-performing products rose by 30%.
• This shift resulted in a 2.25x increase in Meta ROAS (average for 2023 and 2024), demonstrating significant gains in advertising efficiency and revenue.