Amazon sellers are inseparable from advertising. In the process of advertising, ACOS, ROI, conversion rate, etc. are all important indicators to measure the quality of advertising. As an excellent Amazon seller, how to place excellent advertising? ?Let’s learn about Amazon advertising together.
Amazon CPC advertising bid
The CPC bid per ad click, the annual average on Amazon in 2020 is $0.85. In fact, this annual CPC average is slightly lower than in previous years. If compared with other advertising types, Amazon’s CPC is indeed a cost-effective advertising.
The average advertising sales ratio, Acos, is 22%. Dear sellers, if you have a relatively mature product, the Acos should be lower than 22% to be reasonable.
Amazon acos calculation
Amazon acos is an advertising index, which is mainly used to measure the performance of users’ advertising investment in the Amazon market, that is, the percentage of Amazon advertising costs and direct sales brought about by advertising. When ACoS is low, it means that your advertising expenditures account for a low proportion of sales. Therefore, many sellers will reduce ACOS as a goal when advertising.
What is a reasonable Amazon CPC bid?
From the perspective of acos, what determines the level of acos? What is the seller’s ideal acos? Let’s first take a look at Amazon’s acos calculation formula.
ACoS (Amazon Advertising Cost of Sales) is a key metric for measuring the performance of sellers’ advertising campaigns, and can be understood as the percentage of sales you spend on advertising. It can be calculated by the following formula
ACoS=adspend (advertising investment)/salesrevenue (sales)
ACoS=(click unit price * click)/generated sales sales = customer unit price * sales Quantity
ACoS=(Unit price of clicks*clicks)/(Unit price of customers*Sales quantity) Sales quantity=Conversion rate*Points ACoS=(Unit price of clicks*Clicks)/(Unit price of customers*Conversion rate*Click traffic)
ACoS=Click unit price/(Customer unit price*Conversion rate)=CPC/(Customer unit price*CR)
For example, if you spend $30 on advertising on Amazon, and If you make $100 in sales from these ads, your ACoS is 30%. That is: ACoS=$30/100*100%=30%
Amazon Advertising Conversion Rate
The average ad click conversion rate, that is, the conversion from ad click to sales, is 12.5%. This is a very valuable number when it comes to measuring the effectiveness of your advertising. If the CPC click-through rate conversion rate is less than 12.5%, improvements need to be made in terms of product price, first image, reviews, listing quality classification, etc.
If we combine CPC and conversion rate, we can roughly calculate that the cost of advertising for a product is $6.8. If you can find products that are in high demand and sell at a relatively high price, and reduce the proportion of advertising investment, the probability of making a profit on Amazon is relatively high.