Amazon PPC advertising is a way of attracting traffic within the site that many sellers cannot stop. As many sellers love it, as many sellers hate it.
Using on-site PPC advertising will bring a lot of exposure and conversion to your listing. On the current Amazon platform, the search results page for keywords is increasingly dominated by advertising and recommendation positions, which further highlights the importance of PPC advertising.
However, if most of your store's sales rely on advertising, then when you calculate the profits at the end, you may find that you have worked in vain for a whole year.
I often see many sellers complaining in major cross-border forums: "Why has my listing been optimized to the extreme, but the ACOS of the product is still higher than my blood pressure?"
In fact, as Amazon's global store opening project has developed to this point, it is normal for ACOS to become higher and higher. This is just like China's housing prices. The more they are adjusted, the higher they rise, and the more they rise, the more they are adjusted, and it is estimated that they will continue to rise in the future.
1. Why is the ACOS of advertising getting higher and higher?
There is only one reason why Acos is getting higher and higher: the number of sellers on the platform is increasing.
This is the most important factor that drives the ACOS of advertisements higher and higher. Since the development of Amazon's global store project, a large number of sellers have continued to pour into the platform every day. The direct consequence of this is that the prices of products on the platform are getting lower and lower, but the cost expenditure on the platform is getting higher and higher. The biggest change in cost structure is advertising click bidding .
For the platform, Amazon's advertising space is like an auction. As more bosses bid, the competition naturally becomes more intense. Especially now there are many "silly" sellers who think that if they occupy the first line of advertising space at all costs in the early stage, they can stabilize their natural ranking position in the future.
All sellers like this will basically end up empty-handed in the end. Unless you are really a rich player (that is not within the scope of our discussion).
When you want to push your product to the front row of the homepage, if all other factors of the listings are the same, whoever bids higher will be ranked higher, and the bid price of the ad is raised in this way.
2. Is the lower the ACOS, the better?
Since we want to solve the problem of too high ACOS, we must first figure out what ACOS is .
ACoS, or Amazon advertising cost of sales, is an important indicator to measure the performance of sellers’ advertising campaigns. ACoS = total ad spend / total sales from ads. For example, if you spend $10 on advertising and the ads generate $100 in sales, your ACoS is 10%.
From the definition of ACOS, we can see that without considering other factors, the lower the ACOS ratio, the better, because a lower ACOS represents a higher return on investment for your advertising campaign. As long as your ACOS is higher than your profit margin, the sales brought by your advertising campaign will always be in a stable profit-making state.
However, when doing anything, we cannot just analyze the thing itself, and the same applies to analyzing ACOS. If your main purpose of doing in-site advertising is to make money by receiving orders, then you will most likely be greatly disappointed, because in the current situation of fierce competition, there are very few advertising activities that can make steady profits.
Then many friends will ask, what is the point of advertising?
The main purpose of advertising is to increase the natural ranking of keywords and to create a positive interaction with the A9 algorithm, so that the Amazon platform always believes that your product is viable and has a market.
If you don’t believe it, you can try it. After turning off all advertising campaigns for your products, their natural search positions will slowly move backwards. This is probably the effect of advertising on improving natural rankings.
Therefore, many big sellers insist on paying huge advertising fees. In fact, they are using advertising investment to stabilize their natural search rankings, because natural positioning is a sales method that does not require any additional fees.
So, when you rethink ACOS from a macro perspective, do you have a new understanding? Don’t pursue an ACOS that is too low. As long as the sum of the product’s natural sales + advertising sales is profitable, it can be said that this is a relatively successful product.
Amazon platform never judges heroes by ACOS. Products that are profitable and can sell orders are good products.
3. How to solve the problem of high ACOS
Many sellers have an ACOS of up to 150%. Not only will the advertising campaigns for such products not be profitable, but the natural search sales are also estimated to be at a loss. Because the conversion rate of natural search and the conversion rate of advertising campaigns are not actually independent of each other, they are actually expressed in the same way.
If the products in the advertising space cannot be sold, how can you guarantee that the products in the natural search position will be sold? Therefore, in order to effectively reduce ACOS, improving the conversion rate of the advertising position is undoubtedly the first factor to consider.
Products with high conversion rates will be ranked relatively higher under the same bidding conditions. For products with high conversion rates, the bids that sellers need to pay will be relatively low at the same search position.
Therefore, on the Amazon platform, the "Matthew effect" is actually everywhere. If the product performs well, I will make you better. If the product performs poorly, I will accelerate your demise.
As for ways to improve the conversion rate of ad space, the basic work you need to do is to optimize your listing and then ensure the accuracy of the keywords in the ad . These are basic operations, and previous articles have also mentioned them in detail. Sellers who want to know more can read other articles in my official account to learn more.
In addition, you can also take manual intervention measures. That is, when you are evaluating a product, you can specifically increase the conversion rate of the advertising position of your product. After a period of time, you will find that in the same position, the ranking of the advertisement will become higher and higher, and the click cost of the advertisement will become lower and lower.
However, evaluation is a risky behavior after all. In addition to this method, you can also increase the conversion rate by stimulating consumers' desire to buy (setting up large coupons, etc.) . After all, when consumers come to your listing and see such a cost-effective product, the chances of placing an order will increase.
In addition, the establishment of a negative keyword library is also an indispensable technique . Sellers must insist on downloading data reports in the background for analysis within an appropriate period, and resolutely discard those keywords with high exposure, high clicks, and low conversions. Only by constantly enriching your negative keyword library can you waste less and less advertising fees!
In short, advertising is indispensable for sellers. If sellers want their products to perform well, they basically cannot do without the support of advertising. However, advertising operations must have their own ideas and concepts, and you can't just burn the daily advertising budget in a muddle.
Money should be spent wisely. Do you get the point?
