As a new brand in a competitive space, the expectation was that Molecule would not be profitable in the first 1-2 months. While month one was nearly break-even, month two saw Molecule’s ROAS rise to approximately 2.24%, meaning that for every $1 invested, Molecule saw revenue of $2.24. CPAs also dropped under $100 during this time frame.
Building a Profitable Mattress
A RETURN ON AD SPEND OF
Molecule, a new mattress company, is breaking into the competitive field of industry “disruptors” – companies selling mattresses online rather than through a traditional store. DFO was tasked with building the Molecule mattress brand while keeping sales profitable on a Cost Per Acquisition (CPA) basis.
After discussing profitability with the client, we settled on a CPA of $100 per sale of their bed sheets, a complementary product designed to introduce consumers to the Molecule brand. We also advised tracking the Return on Advertising Spend (ROAS), as any sales of the mattress would significantly skew our CPA target.