Advertising Cost of Spend (ACoS) is a significant part of Amazon Pay Per Click. The ACoS metric determines your advertising strategy. This metric measures your Amazon success and spits out a percentage that decides how you bid on search terms. In Amazon’s PPC advertising world, ACoS is crucial.
So, what is ACoS anyways?
An Amazon seller’s ACoS is how much he or she spends on advertising per the amount of revenue he or she makes. The formula for this computation is Total Ad Spend/Total Ad Sales. Here’s an example:
If you have an ACoS of 30%, you paid $.30 for each dollar you made or $30 for every $100 you made (before the cost of properties sold). This formula is an excellent way to measure the success of your ad campaign.
How to Simply Calculate Your ACoS Amazon Formula
ACoS is your direct sales percentage from Sponsored Product Ads or the brand sales made from Headline Search Ads that occurred due to your advertising campaign. The number is found by using this formula:
ACoS = total ad spending ÷ total ad sales x 100
Spend $3 on ads which results in $30 sales, ACoS = 10%.
Still with me? Not sure? Let’s keep going.
This is how to connect to a specific ACoS target.
There are many methods you can use on your product pages to increase your ability to meet the ACoS target of your dreams.
Here are a few of the most often noted tips:
- Understand that the lower your ACoS, the higher your profits. This idea is true if it’s profits you are highlighting.
- If you are looking to increase your products’ visibility or you are competing to dominate a specific niche, you may be open to raising your ACoS.
- Stay on top of your key metrics by setting aside some hours every week for optimizing and manipulating your ads.
Set a Target ACoS (TACoS). Here’s a formula used by many Amazon sellers:
Average Order Value (AVG) X Conversion Rate/ ÷ 1 over Target ACOS = what you should be paying for each click.
^ If you could optimize every single metric on your Amazon account, this formula would ensure that you would always bid perfectly, which, of course, is impossible.
Average Order Value $19; Conversion Rate 10%; Target ACoS (TACoS) 30% = 0.3.
^ Using this formula, your bid would be 57 cents every time to hit the 0.3 or 30% TACoS.
Optimize your product page by making the product title precise and engaging. to increase conversions!
- Show the product in use.
- Use videos for those who may not read all your content.
- Give a detailed product description.
- Ask your customers to review your products and use their suggestions to get a greater number of improved reviews.
- Directly and quickly contact reviewers. This means those who gave good reviews and those who did not.
- Offer refunds for products that did not measure up to your customers’ expectations.
- Offer noteworthy customer service.
- Apply for seller fulfilled prime.
- Consider increasing the budget for your campaign.
- Revisit your keywords frequently. Identify which keywords perform well and which do not. Increase your bid on your top-performing keywords. In most cases, this move will increase clicks, sales, and impressions.
- Research to find if increasing your campaign budget is prudent.
- Lower bids or pause certain keywords that have high ACoS.
- That old saying your dad told you is true, “In order to make money, you have to spend money.”
- Grab your customers’ attention with engaging and high-quality graphics.
- Use Amazon’s multi-attribute variant function if you are creating a listing. One listing can cover all the variants of a product. Doing so has been shown to increase buyers and makes for better reviews on the product.
Confused Yet? Feeling like Bradley Cooper?
Don’t feel like BC (unless you’re BC from Limitless). Amazon is a terrific place to sell, purchase, and get free shipping, but like other marketing strategies, its advertising guidelines can get somewhat confusing. We don’t blame you for experiencing a little brain-drain from all this information.
Even though Amazon has done its best to allow anyone who has an outstanding product to use their platform to make money, selling online is a bit more complicated than most folks think it is. That’s where Clickmattic comes into the picture. Here are the ways our team can assist you in becoming a successful Amazon seller:
- We know that you are outstanding at creating awesome products. We are great at managing, marketing, and advertising.
- Our firm was built as we found individuals who had the same passion as we do. That passion is delivering superior services to our clients and being available to share top-notch consulting relationships.
Let our team do the leg work.
Clickmattic’s highly-skilled experts have the experience and knowledge it takes to make sense of all the statistics, strategies, and formulas that come with intelligent marketing campaigns.
We are a small eCommerce agency that offers agility, talent, and focus on our clients. More importantly, we are a full-service Amazon Advertising Agency that offers help with all of Amazon’s advertising services. Because we are so familiar with Amazon’s methods, we have helped hundreds of our clients improve their revenues, build brand awareness, and customize their ad campaigns. You could say we cover the waterfront by offering creativity and technological smarts.
More selling, less worrying – that’s our motto
The types of Amazon marketing in which we have expertise include:
- Auditing your current performance on Amazon.
- Supplying programs to equalize and strengthen your strategies.
- We build and manage all ads and budgets.
- Product listing optimization recommendations are addressed.
- Our team will increase the profitability of your marketing campaigns.
- Clickmattic ensures that your marketing goals are met.
- If seasonal ads are needed, we build and manage them for you.
- Year-round, ongoing support is always available.
Give us a call or email us to find out more about the wide-wide world of Amazon and ACoS.
We look forward to your increased success.