Fighting declining eCommerce ROAS with artificial intelligence (AI)

Ask any digital commerce marketer about the key metrics to measure their business, and it’s a slam dunk that Return on Ad Spend (ROAS) will sit towards the top, if not at the top, of that list. 

And in the ever-evolving digital marketing landscape, achieving a solid ROAS is a constant pursuit for businesses aiming to maximize their advertising investments and business growth. 

Traditionally, efforts to improve ROAS have focused on refining ad strategies, such as audience targeting, messaging, creative, and placements. However, your website or store’s performance in driving conversions is often overlooked as a factor. In this article, we’ll explore the concept of AI-driven website optimization and how it can supercharge the ROAS on your campaigns.

But first, what is a good ROAS? 

The average Return on Advertising Spend (ROAS) for eCommerce can vary widely depending on various factors such as industry, advertising strategy, product pricing, and target market. It’s important to note that ROAS can also vary significantly between individual companies and campaigns.

Most companies aim to achieve a ratio of 4:1. However, the average ROAS for eCommerce stores is around 2:1, which means you earn $2 in revenue for every $1 spent on Ad costs.

As we know, Conversion Rate Optimization (CRO) is a crucial component in the quest for improved ROAS. When done right, automating CRO activities with the help of artificial intelligence and machine learning can boost your ROAS by 40%. Let’s explore more.

Conversion Rate Optimization (CRO), leveraging the power of AI

It’s undoubtedly that AI is here to stay. And quite honestly, the rise of AI has unleashed a wave of transformative possibilities for marketing and sales departments, empowering them to streamline processes, automate tasks, and make data-driven decisions to drive conversion rates with unprecedented precision and efficiency.

The return on ad spend is a function of many components of your funnel:

  • Ad Creative
  • Ad Copy
  • Ad Budget
  • Ad Targeting
  • Ad Placements
  • Ad Settings

But it drastically relies on all of the funnel components after the Ad Click as well:

  • Landingpage & Bounce rate
  • Click-through rates
  • Pricing and Product information
  • Cart size and AOV
  • Conversion rate

Both ad platform and website experience are equal in importance to impact ROAS and on your website or store, AI plays a transformative role in this process.  By automating and harnessing the potential of AI-driven CRO techniques, businesses can provide personalized experiences in their online stores that are automatically created for each visitor, leading to higher conversion rates and enhancing their ROAS. 

5 Ways to Use AI for Conversion Rate Optimization 

Here are some examples of how your business can leverage AI to power CRO and grow your business.

Personalized Recommendations

Personalization has become increasingly crucial for eCommerce stores and marketplaces, and the role of AI in this area cannot be overstated. 

Now, marketers can automatically deliver highly tailored product or content recommendations by deeply analyzing user behavior, preferences, and historical data via AI algorithms. Aidaptive highlights the significance of predictive recommendations, where AI algorithms consider past user interactions and anticipate future preferences and needs.

Businesses can also present personalized recommendations beyond browsing history or purchase patterns by harnessing predictive insights and understanding individual visitor interests and intent. 

This level of personalization significantly enhances the chances of a successful conversion by precisely catering to each customer’s unique preferences and needs. This drives more dollars that can be attributed back to ad spend.

Dynamic Content Optimization

AI enables dynamic content optimization, where the website dynamically adapts its elements based on visitor attributes or behavior. By leveraging AI algorithms, businesses can customize headlines, images, calls-to-actions, and entire webpage sections to align with each visitor’s preferences. 

For example, an AI-powered CRO solution can modify website content to showcase testimonials, reviews, or case studies most relevant to the visitor’s industry or demographic, fostering a stronger connection and trust and ultimately improving the chances of conversion.

When an ad click comes from a given campaign, ad-set, ad-creative, version, or with other information handed off from Meta or TikTok, that is all powerful data to use in personalizing what that user sees on your site. 

Automated A/B Testing

Ask any marketer or business analyst, and they’ll speak volumes about the need for an A/B testing strategy for their business. It’s no wonder that A/B testing is a common CRO practice, but AI takes it to the next level by automating the process and optimizing it in real-time. 

And further, instead of just A vs B, it’s a multivariate testing (MVT) that can theoretically test an infinite number of versions for every site visitor.

AI algorithms can analyze multiple variations of a webpage or landing page simultaneously, intelligently distributing traffic and quickly identifying the most effective version. By automating A/B testing through AI, businesses can rapidly iterate and optimize their website experience, leading to higher conversion rates and improved ROAS.

Chatbots and Virtual Assistants

Chatbots and virtual assistants have become increasingly popular for business websites recently. As businesses strive to provide seamless customer experiences, chatbots have become a prevalent feature on company websites, offering a convenient and automated solution to assist customers. With an ever-increasing demand for prompt resolutions, website visitors seek instant responses tailored to their needs and challenges.

This chatbot and virtual assistant functionality provides a host of benefits to businesses, including:

  • Increased brand loyalty
  • Expedited responses to customers
  • Maximized conversion rates

AI-powered chatbots and virtual assistants make it even easier to provide personalized support and assistance to visitors, improving engagement and guiding them through the conversion funnel. These intelligent chatbots can understand user queries, provide relevant information, address concerns, and offer tailored recommendations based on individual needs. By deploying AI-driven chatbots, businesses can enhance customer interactions, drive conversions, and boost their ROAS.

Intelligent Site Search

AI algorithms excel in analyzing vast amounts of data and extracting valuable insights. By leveraging this predictive knowledge in the website search experience, brands can automatically identify patterns, predict user behavior, and optimize search recommendations and results. 

AI will analyze historical data to identify factors that contribute to higher conversion rates. By serving each user an intelligent search experience catered to them, AI can transform this already high-performing site feature into a conversion powerhouse. 

Conversion rate optimization is a critical practice to maintain an adequate ROAS – and the application of AI on your site search is how brands can automate a ton of this work.

Take Action Now: Calculate Your eCommerce AI ROI

Is your business ready to revolutionize its marketing strategy and achieve remarkable ROAS with AI-powered CRO? 

Take the first step by leveraging Aidaptive’s ROI calculator for eCommerce businesses. Evaluate the potential impact of incorporating AI into your marketing efforts and discover how it can significantly boost your conversion rates and revenue. 

Transform your marketing strategy, maximize your ROAS, and drive improved conversion rates with Aidaptive’s AI-powered solutions. Request a demo with Aidaptive today to learn how we can tailor our expertise to your business’s unique needs and empower you to achieve unparalleled success.


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