Amazon sellers can use the four-quadrant analysis method when analyzing multiple advertising groups, including the macro- and micro-perspective quantification of CPC advertising, the concept of the Boston Matrix and its analysis method, and how to quantify advertising effects from a macro perspective. What are the common misunderstandings when using the quadrant analysis method?
When using the quadrant analysis method to screen multiple advertising groups, many operators tend to only consider advertising costs and ignore other costs when calculating the “cost per order”.
The chart has no analytical value because both the horizontal and vertical axes are only related to advertising performance. The vertical axis is the average advertising cost of a single order, and the horizontal axis is the ROI value of the advertising campaign, which means that the higher the ROI, the lower the average advertising cost of the order; the lower the ROI, the higher the average advertising cost of the order.
In summary, when using the quadrant analysis method for advertising, the vertical axis must be the “cost per order” (the calculation method is to divide the total cost of the product related to the advertising campaign by the total order volume. The total cost of the product includes labor costs, inventory costs, logistics costs, advertising costs, etc.).