The Amazon advertising business maintains its growth at a rapid pace providing various opportunities for businesses to place their products in front of responsive leads. Monitoring your Advertising Cost of Sales (ACoS) is a must when you aim to reach leads by running sponsored ads.
When advertising a product on Amazon, you are charged on a cost per click basis or CPC. If five people clicked on your ad and merely one of them purchased your products, then the total CPC Amazon charges you for these five clicks is your cost of advertising to earn a sale. Amazon discloses this cost as a percentage of the total sale value and terms it as ACoS.
ACoS should be high or low?
The Advertising Cost of Sale is a crucial metric for assessing and potentially enhancing your Amazon campaigns. It is the key performance indicator (KPI) for Amazon PPC advertising and gives you an overall picture of how your campaigns are performing.
Even though a higher ACos does contain negative connotations, it might mean greater long-term profits if it suits your strategy.
Along with a competitive price point, you must have insights over your advertising performance. It is important to have reasonably collected data on your ads. This involves data on:
Yet, if your ACoS is not at a profitable level but is still contributing to an increase in organic sales, the campaign’s overall objective is achieved.
Repetition impacts consumer behavior. Although your product is ranking great, running ads to a keyword would still inspire organic sales growth. There is a definite increase in organic traffic if customers are seeing your ads first.
Advertising on Amazon is, in general, very effective. However, some consumers may not click sponsored results or may disregard them when conducting their search. Even so, seeing the same product flashing on the screen more than once tends to leave a confident impression. Using DataHawk Analytics Software, you can advantageously direct your advertising and ranking efforts to reach markets where you’ll see the most benefit.
About The Guest Author:
DataHawk Amazon Advertising is an Amazon Analytics Software that will help you monitor, analyze, and increase the performance of your Amazon Sponsored Ads and reduce your Amazon ACoS. DataHawk allows you to Monitor your Amazon Sponsored Products Ads performance for any given period and marketplace, and analyze data in daily, weekly, or monthly historical views.
He is the owner and founder of PPC Entourage, one of the original amazon ad software and management companies. Mike started off as a physical therapist in 2015 and just knew there had to be a better way so he started his ecommerce journey. Using the power of Amazon Ads, he built a 7 figure brand in less than one year. Now he helps other sellers do the same with free valuable education, PPC Entourage software and the ad agency. He is also the author of the Amazon Ads Playbook series.
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