Advertisements on the Shopee platform are paid advertisements. If there is input, there must be output. Here is a very important concept ROI.
Shopee ROI=Sales amount+Advertising fee
Sales amount: During the period of opening the advertisement, the products that the store orders are calculated according to the calculation method of the Shopee advertising background, which are all considered as the sales brought by the advertised products opened by the seller. For example, the store uses product A for advertising promotion. Product A has no orders, but customers who browse product A and enter the store buy products B and C. The sales of products B and C will be counted.
ROI optimization:
① Continuously optimize the conversion rate of products.
② Make good plans in product selection, combine traffic and conversion, and low-order products are mainly used to attract traffic to the store, driving the increase of orders in the entire store; high-order products are mainly used to drive the ROI of the entire store, thereby increasing overall sales.
③Optimize keywords and average single-click price.
a. Optimize quality score (optimize click-through rate, adjust keywords, and increase the relevance of products and keywords). b. Regularly optimize keyword bids (optimize keyword bids in a timely manner according to the previous ranking situation).
④ROI optimization is a long-term process. It is best to adjust and optimize in a 7-day or 15-day cycle in data monitoring.
ROI return on investment = sales amount/advertising fee x 100%-conversion rate x average customer unit price/average single click price x 100%
[Note]
The sales amount in this formula refers to the sales amount of the total sales volume of goods generated by Shopee users clicking on keyword ads. Advertising fees refer to the total keyword advertising expenditures of sellers.
However, even if we know how to calculate ROI, what can we do? For example, if product A spends 100 yuan on advertising and has sales of 300 yuan, then the ROI of product A is 3. The seller cannot judge the meaning of the number 3. Does it mean making money or losing money? Therefore, we must introduce another important concept: the break-even point of ROI.
ROI break-even point:
When profit = advertising cost, it is the break-even point.
ROI break-even point is only related to gross profit margin.