As mentioned above, in the process of creating a spiral hit, in-site advertising is needed to assist and promote it. So how should advertising be placed?
The placement of advertising should be divided into two stages. The first stage focuses on traffic and orders, and the second stage is guided by ACOS values and focuses on conversion rates.
Let’s first explain the first stage: focus on traffic and orders. Why do we do this? Sometimes we find that even if the price of a product is very low, there is still no traffic, let alone orders. Without orders, the ranking of the product cannot be improved, and creating a hit is just empty talk. What should we do?
If you want to create a hit, you must have orders. The low-price method adopted in the spiral hit creation method not only complies with the platform rules, but also caters to the preferences of consumers. The difficulty is that the product has a low weight and no traffic. In the face of this situation, it is necessary to start advertising and import traffic for the product through advertising. With traffic and low prices, it is competitive, which can encourage consumers to place orders, thereby generating orders, and the order conversion rate at this stage is often higher than that of peers. The author calls this stage “advertising imports traffic, and low prices bring conversions.”
When the product has orders, its ranking begins to rise, and a conversion rate higher than that of its peers will further increase the weight of the product in the Amazon system. Therefore, traffic and orders are what we should focus on in the first stage.
With the increase in the number of orders and the rise in the ranking of products, under the spiral explosion model, the price of the product can be gradually increased, from loss to break-even, and then to profit. When the price of the product is higher than the cost price, each order will bring us profit, and our expectations for advertising will change, from the first stage of only pursuing orders to being guided by ACOS values, keeping a close eye on the conversion rate, and making the ACOS value gradually close to or less than the gross profit margin. This is what we should focus on in the second stage.
How can we make the ACOS value smaller and smaller? You can refer to the following method
As the price of the product increases, assuming that there is no change in other variables, the ACOS value will gradually decrease, but this process of reduction will be very long and the amplitude is also very limited.
Gradually reduce the advertising bid. In the first stage, in order to obtain traffic and orders, the advertising bid is generally high. As the product ranking rises, the number of orders naturally increases. At this time, the advertising bid can be gradually reduced to reduce the ACOS value.
Gradually reduce the advertising budget. When the advertising bid is reduced, the budget should also be appropriately reduced to reduce advertising costs. Of course, the premise is that the total number of orders and the BSR ranking of the product are not significantly affected. Setting bids in different time periods is like using good steel on the blade. Advertising fees should be spent on effective clicks that can bring orders. Sellers can set advertising bids in different time periods. During the peak sales period, set a higher bid to ensure advertising positioning, attract traffic, and generate orders. During non-peak sales periods, appropriately reduce the factory advertising bid to avoid the advertising ranking too high and reduce the possibility of malicious clicks on the advertisement by competitors. This is also a necessary means to reduce the ACOS value.