The grocery owner’s renewal decision
A grocery owner must decide whether to repeat paid ads aimed at previous customers. The report credits purchases after ad clicks, making expansion look sensible. But customers who already intended to shop can click too. Paying to reach them may consume the contribution needed to run the shop.
A pilot exposes the missing comparison
Hypothetical example; all figures are assumed. A one-week pilot randomly assigns eligible customers to equal ad and no-ad groups. Prices and service stay identical. Before launch, save each customer’s test_group; afterward, count all completed purchases against it, including purchases without clicks.
The ad group places 100 orders; the no-ad group places 80. Each order contributes $8 after stock, packing and payment fees. The ad report credits 100 orders, but the comparison estimates only 20 additional orders for an audience this size. Existing demand explains the gap between attribution and added business.
Pausing leaves more to run the shop
For next week, assume the same demand, audience size and $240 advertising ceiling. Repeating the campaign costs $240: 100 × $8 – $240 = $560 of contribution after ads. Pausing costs no advertising cash: 80 × $8 = $640. Choose the pause under these assumptions. It preserves $240 of ad cash and leaves $80 more contribution; neither figure is total business profit because fixed costs remain.
When the campaign earns its place
Inspect test_group, completed orders and refunds before renewing. Unequal group sizes, different offers or customers exposed to both treatments undermine the comparison; repair the test before expanding spend. With comparable groups, renewal needs more than $240 ÷ $8 = 30 additional orders per week for the tested audience size.
Now change this hypothetical example: the no-ad benchmark falls to 60 orders while the ad group still buys 100. Pausing yields 60 × $8 = $480; repeating still yields $560. Renew within the budget if that difference holds. Check another comparable week before scaling: a short pilot cannot establish lasting demand.