Analyzing Your Product Performance
Getting the most out of your advertising budgets on Amazon starts with understanding your product performance. You need to analyze how your product is performing to identify areas for improvement and to determine what actions you can take.
To get started, you’ll want to review the following metrics:
- Conversion rate: This metric measures how well your ads are converting into sales. It’s calculated by dividing the total number of sales by the total number of clicks. The higher your conversion rate, the better you’re doing at getting people to buy after viewing your ad.
- Cost per click (CPC): CPC is how much each click costs you when a shopper clicks on one of your ad placements. A higher CPC may mean that there’s more competition in that ad space or that shoppers aren’t as interested in clicking on ads for this particular product.
- Return on ad spend (ROAS): ROAS measures the return you’re getting from each dollar spent on advertising, which is determined by dividing total revenue earned through ads by the amount spent on those ads. A high ROAS indicates that you’re getting a good return for every dollar spent on placement costs, while a low ROAS means there’s room for improvement in terms of ad performance and cost efficiency.
By regularly monitoring these metrics, you can stay informed about what’s working and what needs improvement so that you can make informed decisions about how to optimize your Amazon advertising campaigns and achieve lower ACoS numbers in 2023.
Optimizing Your Brand’s Advertising Campaigns
If you want to lower your ACoS, you need to be sure your Amazon Advertising campaigns are optimized. Don’t worry–with the right strategies and tactics, optimizing these campaigns can be simple. Here are five key strategies for optimizing your Amazon Advertising campaigns:
- Start small with just your top keywords. Use a keyword research tool to discover which words and phrases are working best for you on high-converting products, then add them to your campaigns and monitor performance.
- Eliminate low-performing ads. Measure performance, identify ads that aren’t delivering good returns and pause them from running.
- Bid competitively but don’t overbid. Bidding too high will drive up ACoS, while bidding too low can keep you from showing up in search results. Find the sweet spot of competitively targeting relevant keywords without bidding too high.
- Alternatively, use automated bid strategies that adjust bids based on real-time performance data. This can help ensure you’re paying the right price for ads while also eliminating underperformance due to manual bid settings being out of date or incorrect.
- Test new creative regularly to ensure your ads remain fresh and relevant to buyers who may rotate through different products as their needs change throughout the year.
- Additionally, try testing different ad formats like Sponsored Display Ads or Dynamic Ads, featuring personalized or targeted messaging for different audiences—which can demonstrate a higher ROI compared to traditional ad formats like Sponsored Product Ads or Headline Search Ads.
By implementing each of these strategies in your Amazon Advertising campaigns, you’ll be able to effectively optimize them—
Finding More Profitable Keywords
Adjusting Your Amazon Ad Spend
The fourth thing to consider if you want to lower your ACoS is adjusting your Amazon ad spend. Many brands often find that they’re not allocating their ad budget in the right way—which means they’re missing out on a lot of opportunities.
You can use a process called bid optimization to fine-tune your campaigns and refine your bidding strategy, so you can make the most of your funds and get the highest ROI possible. It’s also a good idea to put some of your budget into experimentation, so you can try new strategies or tactics without risking too much.
It’s also important to remember not to make any hasty decisions when it comes to setting up or changing your ad campaigns—take time to measure the results and determine what works for you and what doesn’t. Here are some things you should keep in mind:
- A/B testing different bids and campaigns
- Analyzing campaign performance over time
- Adjusting bids based on performance
- Allocating budget across different product segments
- Experimenting with new campaigns and strategies
- Utilizing automation tools for bid optimization
By understanding how best to allocate your budget and adjusting bids where necessary, you’ll be able to control costs and get the most out of your ad spend—ultimately lowering your ACoS at the same time!