In our last post, we discussed what a good Amazon PPC ACoS is and which strategies can be pursued with Amazon Advertising. In this post, we would like to share a selection of tips that can help lower your PPC ACoS on Amazon.
To take targeted measures, it is important to understand how ACoS is calculated and which input KPIs can influence it.
ACoS stands for "Advertising Cost of Sales" and represents the ratio of advertising spend to generated revenue. To lower this metric, there are mainly two scenarios:
- Higher revenue with the same spend
- Same revenue with lower spend
The most important input factors for a better ACoS are:
- Product Conversion Rate - The fewer clicks needed to achieve a conversion at constant cost per click, the lower the spend
- Cost Per Click - The lower the cost per click at constant conversion rate, the lower the spend
- Product Sales Price - The higher the product sales price at constant click prices and conversion rates, the higher the revenue. However, higher sales prices often lead to lower conversion rates
Our Top 5 Tips for a Lower ACOS
Optimization of Title, Bullet Points, Search Terms and Product Description
We generally recommend not running ads on products that don't have optimized content. From keyword research to proper content formulation, unnecessary expenses can be avoided. The two main factors for good content are:
- Without proper keyword research, Amazon PPC advertising cannot be precisely targeted. Especially automatic campaigns target search terms and placements based on content.
- The better the content on Amazon and the more informative for the customer, the higher the product's conversion rate typically is
Optimization of A+ Content Images
We all know it - In our daily business, we mostly sit in front of the PC and are used to viewing the Amazon website on desktop. On desktop, both title and bullet points are visible at first glance. In doing so, we often forget customers who shop on Amazon via mobile devices. Similarweb analyzed data from May 2021 - April 2022 and concluded that around one-third of Amazon traffic comes from mobile devices. Both via the app and via the mobile browser, title and bullet points appear further down on the product detail page and can only be read when scrolling. Images are much more prominent here, which we can enrich with optimized A+ Content.
Together with our clients, we optimize A+ Content images so that all relevant information about the product and the most important USPs are already conveyed to the customer through the images. At OMNIFOX, we internally call this type of images "speaking images". This approach makes it easier for customers to make a purchase decision at first glance and typically optimizes the conversion rate.
The Relevance of Long-Tail Keywords
Many vendors and sellers on Amazon underestimate the relevance of long-tail keywords. Too often, focus is placed on the top 10 most-searched keywords for the respective product and attempts are made to win these ad placements. However, it's also worth including less frequently searched long-tail keywords in campaigns. Unlike with top keywords, the competition in the bidding process for these keywords is often lower and clicks are accordingly cheaper to obtain. It's still important to select carefully and consider whether the respective keyword really fits your product. With some keyword research, however, the average click price of campaigns with long-tail keywords can decrease and thus lower the ACoS at constant conversion rate.
Using "Dynamic Bidding - Down Only"
This strategy can be implemented immediately without much effort and help reduce average click prices. Through "Dynamic Bidding - Down Only", bids can be lowered by Amazon by up to 100%. Amazon applies this bid reduction with this bidding strategy for clicks where it is unlikely that a purchase of the product will occur. This bid reduction happens in real-time. We recommend switching to this strategy if the ACoS of the respective campaign is too high and you want to minimize your spend.
Catch-All Campaigns
Another tip that can be implemented directly is creating a catch-all campaign. We create this type of campaign for the majority of our clients and internally call it a "sweeper" campaign.
The campaign is easy to explain and even easier to set up. We set up an automatic campaign (Dynamic Bidding - Down Only) with all products in the portfolio. We set the bids very low - usually between €0.05 and €0.15.
This campaign now comes into play when, for example, our "regular campaigns" run out of budget. Additionally, this campaign can display our products on very cheap long-tail placements. Typically, this type of campaign has a very strong ACoS because we spend very little money on clicks - it's worth trying.
Which measures can also help you lower your ACoS, we would be happy to discuss with you in an initial non-binding conversation.
Feel free to book a meeting directly via our website.