The ultimate goal of advertising is to create more profits. To this end, the goal of advertising is summarized as “three 30%s”, that is, the gross profit margin of the product is ≥30%, the proportion of direct advertising sales to total sales is ≤30%, and the ACOS value is ≤30%. Use them as fine-tuning coefficients, and the proportion of the three data can be slightly changed.
The proportion of direct advertising sales to total sales is ≤40%, the ACOS value is ≤40%, and the gross profit margin is ≥40%. At this time, the advertising cost is lower than 16% of the total sales, which is also reasonable.
The proportion of direct advertising sales to total sales is 50%, the ACOS value is ≥50%, and the gross profit margin is less than 20%. Advertising is a loss. The more investment, the greater the loss. If we can use the “three 30%” as a reference coefficient and make fine adjustments based on our own gross profit margin and sales share, we can avoid the embarrassing situation of advertising “only bringing sales but not making money”.
To achieve this goal, we must accurately interpret and optimize the advertising data. After the advertisement is released, there is no exposure. What should be adjusted? Product optimization and keyword bidding should be carried out. What should we do if we have high exposure and low click-through rate? We need to optimize the product, increase or decrease the bid, etc. What should we do if we have high click-through rate and low conversion rate? We should still optimize the product and consider bidding in different time periods, etc. All these can be achieved by making adjustments based on the content in the previous sections.
It is not enough to do these alone. The above adjustments can only solve the traffic, order volume and conversion rate, but the ACOS value remains high. In order to reduce the ACOS value and achieve the goal of “three 30%”, we must also do the following two things:
Appropriate use of negative keywords, and the mode and rhythm of keyword bidding setting and adjustment.
Let’s look at negative keywords first. When a keyword with high exposure, high click-through rate, low conversion rate/no conversion rate appears in an advertising campaign, we generally consider negating it and reducing advertising costs by negating it. After the cost is reduced, the numerator in the ACOS formula becomes smaller. Assuming that the denominator remains unchanged, the ACOS value will inevitably become smaller and approach 30%. However, some sellers have found in actual operations that the negation was originally carried out to save costs and increase conversion rates, but after the negation, the overall advertising effect has become worse. What is the reason?
First, the keywords with good performance were mistakenly negated. Some sellers extract the best-performing keywords from automatic ads to create manual ads, and then negate these keywords in automatic ads because they are worried that the two advertising campaigns will compete with each other and cause waste. In fact, in any advertising campaign, the keywords with good performance must be retained and maintained. Even if 100 advertising plans are created, as long as each advertisement has a good effect, what is there to worry about? This practice of negating the best keywords is absolutely wrong.
Second, too many keywords were negated. When negating keywords, you must be cautious and take the attitude of preferring to miss rather than kill them by mistake. The reason is that if there are too many negated keywords, it is easy to destroy the original advertising structure, which will lead to worse results. When you plan to deny some keywords, please remember the famous saying in the advertising industry, “Half of my advertising is wasted, but I don’t know which half.” Since advertising is bound to be wasted, we might as well treat it according to the principle of “moderate waste”!
Third, the wrong negative matching method is used. Some sellers directly choose the phrase negation matching type when setting negation. Although this can deny keywords with poor conversion, it may also involve some keywords with relatively good conversion, and the advertising effect will become worse and worse. Therefore, when setting negative keywords, its matching type must be selected as precise negation.
After talking about the adverse effects that may be caused by denying keywords, let’s take a look at the mode and rhythm of keyword bidding setting and adjustment. For most sellers, there are three situations when setting advertising bids: (1) setting a bid and not changing it; (2) setting a low bid in the early stage, and gradually increasing the bid when the advertising effect is poor in the later stage; (3) setting a high bid in the early stage, and strategically starting to reduce the advertising bid as the product performance and BSR ranking rise in the later stage.
In the first case, the bid price is fixed. If the bid price is low, it may lead to poor indicators such as advertising exposure and conversion rate, which is reflected in the weight as low advertising keyword quality score, and then the advertising effect is getting worse and worse. In the second case, the early advertising bid price is low, and the advertising effect may not be satisfactory. In this case, although raising the price can gradually improve the keyword quality score to a certain extent, it often requires more effort.
In the third case, the early advertising bid price is high, and the product is easy to rush to the top position. If the product details page is well optimized, its conversion rate will be relatively high, which will drive the keyword quality score to increase rapidly, higher than the keyword quality score of its peers, and can save advertising costs to a certain extent. As the number of orders increases, the BSR ranking rises, and the high conversion rate and high ranking will further increase the product weight, thereby making the keyword quality score higher, and the advertising effect will continue to improve. In this way, when the BSR ranking enters the front, even if the keyword bid is lowered, the advertising can be maintained in the front position.
Therefore, in the process of advertising, focusing on the “three 30%s”, in order to achieve the goal of creating profits through advertising, the third advertising bidding setting method will be more effective.