Tchibo expands scale with Target ROAS

German company Tchibo was founded in 1949 by Max Herz in Hamburg. The company operates around 900 stores in eight countries, more than 24,300 retail depots and national online stores.

Through its multi-channel distribution system, Tchibo offers coffee and the single-serve Cafissimo and Qbo systems, as well as non-food items that change weekly and services such as travel and mobile communications.

Over more than 70 years, Tchibo has consistently expanded its range of products and distribution channels and, with its strong brands, stands for variety and quality worldwide. For its sustainable business policy, the family-owned company has been awarded the Prize for Corporate Ethics and the CSR Prizes of the German Federal Government, among others, as well as being named Germany's most sustainable large company.

Tchibo offers “Theme Worlds” with an assortment of products that changes weekly. It is tailored seasonally with the weekly themed assortment available both online and offline.

All online and offline channels are seamlessly linked via the Theme Worlds. For example, customers can order a desired item online and then pick it up in the physical shop (Click & Collect). In this way, the customer comes into contact with the Theme Worlds at all possible touchpoints of the customer journey. In recent years, the web shop has become an increasingly important part of Tchibo’s customer journey. Optimisation of the online experience was a very manual process, until Tchibo started investigating automated bidding strategies to optimize to return on ad spend (ROAS).

“Before we looked into Target ROAS, there were a lot of manual optimisation steps that were necessary to make our campaigns efficient,” said Hanna Maria Brauer, Lead SEA & PSM Tchibo GmbH. To achieve the ROAS targets, the Tchibo digital marketing team was investing a lot of time in campaign management for limited scalability. It meant that there was no time for a more focused development and expansion of the existing campaigns and account.

Tchibo quickly realized the use of Target ROAS could drastically reduce the time spent on campaign optimisation. In cooperation with Microsoft Advertising, Target ROAS was subsequently implemented as an automated bidding strategy. After an initial learning phase, the use of Target ROAS significantly increased the efficiency of the campaigns. Consequently, this functionality was rolled out in every campaign in the shopping area. In addition, this feature began to be used in high-conversion search campaigns as well.

The results of the automated bidding strategies really paid off for Tchibo. Between July and October 2020, Tchibo saw a 7X increase in the return on advertising spend. Conversion rates were also four times higher and through the use of Target ROAS, the time required for campaign optimisation was reduced by 30%.1 “We are really happy with the results of Target ROAS both for our campaign performance and the reduction in time spent for campaign optimisation,” commented Natalia Ryvkin, Junior Online Marketing Manager, Tchibo GmbH.

• Family business, founded in 1949; turnover: 3.12 billion EUR in 2019. 
• Employees: approximately 11,450 worldwide, with 7,430 in Germany.
• Market leader in roasted coffee segment: Germany, Austria, Czech Republic and Hungary with over 500 stores in Germany.
• Transformation from a coffee brand to a multi-faceted company (non-food, travel, mobile communications, insurance, photo books, fitness, and many more).