Teaching Case Study · Digital Advertising

Where Does the Next Rupee Go?

A budget allocation dilemma across Search, Display, YouTube, and Performance Max for a growing SaaS business.

CompanyNestlyPro
IndustryB2B SaaS — Interior Design Tools
Monthly Ad Budget₹12,00,000 (current) + ₹4,80,000 (available)

The Company

NestlyPro is a SaaS platform that helps interior designers create client proposals, mood boards, and project timelines. The product costs ₹2,499/month per seat. Average customer stays for 14 months — making the lifetime value approximately ₹35,000 per customer. The company targets independent design studios and freelancers across Tier 1 and Tier 2 Indian cities.

Situation

NestlyPro has been running Google Ads for 8 months. The account is mature enough to have conversion history. The CMO has been given board approval to increase the monthly ad budget by ₹4,80,000 — a 40% increase. She must decide how to allocate it across the existing campaign mix. The target CPA is ₹9,000 (cost to acquire one paying customer).

She has pulled the last 30 days of campaign data and is now staring at her screen trying to figure out what is actually happening.

Last 30 Days — Campaign Performance

Campaign Type Spend (₹) Impressions Clicks Conversions CPA (₹) CVR
Brand SearchBranded keywords — "NestlyPro", "Nestly login" Search 1,44,000 36,000 1,728 83 1,735 4.8%
Non-Brand Search"interior design software", "proposal tool for designers" Search 3,36,000 1,40,000 1,820 29 11,586 1.6%
Display — Design AudienceInterest: Interior design, Architecture; Placement: design blogs Display 1,44,000 9,20,000 552 4 36,000 0.7%
YouTube — ProspectingSkippable in-stream, affinity + custom intent, no VTC tracking YouTube 1,92,000 2,40,000 views 192 2 96,000 1.0%
Performance MaxAll channels; asset groups: Proposal Templates, Project Mgmt PMax 3,84,000 4,80,000 2,880 78 4,923 2.7%
TOTAL 12,00,000 7,172 196 6,122 2.7%
Additional Context

LTV data from CRM: Customers acquired through Non-Brand Search have an average LTV of ₹52,000 — nearly 2× the account average of ₹35,000. The assumption is that high-intent searchers have better product-market fit.

Target CPA: ₹9,000. At blended ₹6,122 today, the account looks healthy overall. But three of five campaigns are above target.

What Else the CMO Found

Before making the decision, the CMO dug a little deeper. She pulled four additional reports. Read them carefully.

🔍 Search Impression Share

Brand Search impression share has dropped from 91% to 68% since Performance Max launched 3 months ago. The lost IS isn't going to competitors — it's going to PMax itself, which appears to be bidding on branded queries internally and claiming the credit.

📍 Regional Conversion Rate

YouTube is only active in Mumbai, Pune, and Bangalore. In those cities, the Non-Brand Search CVR is 2.4%. In Delhi, Hyderabad, and Chennai — where YouTube is off — the Non-Brand Search CVR is 1.1%. The difference has held steady for 2 months.

🗂️ Google Analytics — Assisted Conversions

Display touchpoints appear in 41% of all conversion paths when looking at multi-touch attribution in GA4 — despite Display being credited with only 4 last-click conversions. It frequently appears as a first or second touch before a Search click converts.

📊 PMax Search Terms (Partial)

The PMax search terms report (limited visibility) shows that 34% of PMax clicks came from queries containing "NestlyPro", "Nestly app", or "Nestly login" — branded terms that Brand Search was already covering before PMax launched.

Four Options on the Table

The CMO must decide how to invest the additional ₹4,80,000 per month. Her team has proposed four options. Each is defensible on paper. Not all of them are equally smart.

A

Scale What's Working

Performance Max+₹3,20,000
Brand Search+₹96,000
Non-Brand Search+₹64,000
DisplayNo change
YouTubeNo change

"PMax is delivering at ₹4,923 CPA — well under our ₹9,000 target. We should put the majority here and reinforce Brand Search which has our lowest CPA."

B

Bet on High-Intent, High-LTV

Non-Brand Search+₹3,84,000
Brand Search+₹96,000
Performance MaxNo change
DisplayNo change
YouTubeNo change

"Non-Brand Search customers have 2× LTV. Yes the CPA is ₹11,586 today but these are the most valuable customers we acquire. Scale up the budget and the CPA will improve with more data."

C

Build the Upper Funnel

YouTube+₹2,40,000
Display+₹96,000
Non-Brand Search+₹96,000
Performance Max+₹48,000
Brand SearchNo change

"YouTube is clearly warming the market — look at the regional CVR difference. Display is assisting 41% of conversions. We should invest in awareness now and let it compound."

D

Consolidate Into PMax

Performance Max+₹4,80,000
Brand SearchNo change
Non-Brand SearchPause
DisplayPause
YouTubePause

"PMax runs across all channels anyway. We're duplicating effort running separate campaigns. Consolidate everything into PMax, feed it our best creative assets, and let the algorithm optimise."

Important constraint

The board wants to see results within 60 days. The CMO cannot run a 6-month experiment. Whatever she chooses needs to show progress quickly — but also shouldn't sacrifice long-term account health for short-term numbers.

What Would You Do?

  1. Based on the last-click CPA data alone, which option looks most attractive? Why is last-click CPA a dangerous metric to rely on in an account like this? Think about which campaigns touch customers early in the journey versus late.
  2. The PMax campaign is reporting a CPA of ₹4,923 — the best in the account. But two data points suggest this number may be misleading. What are they, and what would the "true" PMax CPA look like if you adjusted for them? Look at the Search Impression Share data and the PMax search terms breakdown.
  3. YouTube is reporting a ₹96,000 CPA on a last-click basis. Is this campaign failing? What evidence suggests otherwise, and what single action would you take to fix the measurement problem before changing the budget? Consider the regional CVR difference between YouTube-active and YouTube-inactive cities.
  4. A student argues: "Display has a ₹36,000 CPA and only 4 conversions — it should be the first thing we cut." How would you respond? What would you want to know before agreeing with this? Check the assisted conversions data. What is Display's role in the journey?
  5. Option B argues that Non-Brand Search customers have 2× LTV, so the higher CPA is justified. Do the maths: at ₹11,586 CPA and ₹52,000 LTV, is this campaign profitable? How does this change the decision? Compare LTV:CAC ratio across campaigns. What's considered healthy in SaaS?
  6. If you were the CMO and had to choose one of the four options as-is, which would you choose and why? If none of them are right, what would Option E look like? The best answer may involve fixing measurement before spending the additional budget.