3 Key metrics other than ACOS that will help you improve advertising performance

Introduction

With Amazon advertising, knowing the key factors and also knowing how to manipulate them to their advantage can be a complete game changer for sellers.  If you are a seller on Amazon, Advertising Cost of Sales (ACOS) is a very important metric that you need to know how to optimize for the benefit of your sales. ACOS acts as a clear indicator of the efficiency of your ad campaigns.

However, other than ACOS, there are other important metrics that can help you improve your visibility and sales using Amazon Ads. In this blogpost, we are going to talk about those parameters and how to optimize them.

The 3 parameters that we are talking about are:

1. Click through rate

2. Cost per click

3. Conversions

Let's take them up one by one:   

1. Click Through Rate (CTR):

This metric you understand how relevant and attractive your ad is for a specific search query. For example, if you run an ad for blue shoes, how many clicks you got through that ad to your product refers to the CTR. However, it is vital to note that just increasing your CTR does not guarantee conversions, although it increases the chances of conversions by a lot.    

How can you improve your CTR? 

1. Advertised product: If your advertised product has low product ratings, or in-effective/ small images, then your CTRs will be low, no matter how targeted your campaign is. Make sure you are putting your ad dollars behind your best performing products. The more comprehensive and attractive they are, the better the chances of your audience clicking on it.  With ad analytics and automation software, it is easy to understand your spend on various product bands (top selling vs. Low selling).

   
   

   

   
   

   We have talked about this in detail in this video blog:

    

b. Targeted keywords: Target keywords that are relevant to your product and ensure that you are negating keywords that are not relevant, but are showing ads on. For sponsored brands, a good lifestyle image with an attractive ad copy should be able to help you increase CTR.  

c. Targeted ASINs/Subcategory: If you are looking to target other ASINs and get your product ads on the other product details page, you should ensure that you are targeting ASINs that are in the same price range or a slightly higher price range. Targeting ASINs with lower price range will give you the least results and targeting ASINs with significantly higher prices might also have the same effect.   

d. Improving your CTR for Sponsored Brands (SB):  

• Custom images: Create images and ad creatives that engaging and creative. Have good imagery representing your brand, and if possible, tell your brand story in an engaging way. It is more likely that you attract shopper interest that way than when you just post your logo and the main image. Make sure that the images also have witty copy and attractive designs with your product as the hero of the creatives.  

We have talked about custom images in this video blog here:

• Headline and Copy: The content you put out greatly reflects your brand. Ensure that there are zero grammatical errors, write clever headlines (without excluding crucial product information). Invest in getting unique designs made for your products which will help catch the consumer’s eye in a sea of possible choices.  

• Top of Search Displays: If your ad appears near the top of the search area, the CTR increases by 2 times or more. Generate and use the placement reports to ascertain what the difference in CTRs are for different ad placements. This is why it becomes important to win more impressions on the ‘top of search’ displays. Try and get more impressions through ‘top of search’ displays. 

• Product Ratings: As a consumer they are trying to ensure that they are buying good products. Your products with low ratings and bad reviews are markedly less likely to get clicked and lead to a conversion. In your hero campaigns, only use ASINs that have ratings above 3.5 and ideally has a few good reviews too. If you do not have any products with good ratings, avoid including any ASIN in your ad creatives.   

  
  

2. Cost Per Click (CPC)

Not to be confused with bid, CPC is the amount paid for each click on the advertisement (whereas a bid is the maximum amount advertisers are willing to pay for their ad placements).   For example, if you have invested 10$ in your product ad, and got 5 clicks, then your Cost per click is 10 divided by 5, i.e. 2$. Amazon ads CPC’s have grown from 0.23$ to 1.2$ per click in the last 7 years.   

How to reduce your CPC:  

1. Bid automation: Bid automation helps you reduce your CPCs on low performing search terms and increase bids on high performing ones. You can implement bid automation using any parameters namely spend, sales, ACOS, conversions, CPC and Bids. We have outlined some good bidding strategies in this blog post. These bidding strategies can not only help you reduce CPC, but also increase sales by using the right parameters to make bid changes.   

2. Search term negation: Negating search terms that are not performing can help you reduce your overall spend. You can use Amazon Ad console to negate your search terms. Atom11 provides a simple rule based search term negation that can be used to control wasted ad spend (example below).

Here is a detailed blogpost on search term negation and how to do it according to your ad objectives: https://www.atom11.co/blog/the-ultimate-guide-to-search-term-negation-on-amazon-ads

c. Dayparting: Dayparting can help you improve your CPC by increasing spend during high performing hours and reducing at low performing hours. You can use the sponsored ads hourly report to set up dayparting and automatically increase/ decrease bids when you want.   

We have talked about a detailed dayparting strategy in our blogpost here:  https://www.atom11.co/blog/dayparting-framework

You can also watch our video here:  

d. Top of Search bid adjustment: While top of search bid adjustments help you increase your CTR’s, they also have the highest CPCs. To reduce your CPC, you check % ad spend on different placements and reduce Top of search spend. On atom11, you can set up automations to reduce low performing bid adjustments on a weekly basis:

3. Conversions (CVR)  

This ultimately is the fruit of all your advertising efforts is conversion. Conversion is calculated as Orders divided by Clicks. For ex. If you get 10 orders from 100 clicks, your conversion is 10 divided by 100, i.e. 10%. Your ad campaigns and promotions are all aimed at making sure that they lead to conversions (sales of your product).

Here are some practices that you can follow to increase the chances of your conversions: 

1. Make sure your product detail pages have high resolution images, and all the major product features are all listed clearly. Ideally videos should also be included. These videos should contain your complete product information, good imagery, highest selling and best reviewed ASINs, discounts and deals. 

Here is a good video where we talk about good content that converts:

1. Keep competitive prices (prices should be closer to your competitors and in the average price range according to your product quality) so your chances of conversions are higher Promote your bestsellers and highest rated products. 

2. Keep redirecting bids to the keywords and ASINs that fetches high conversions.

   
   

Sellers need to continuously monitor their ACOS to ensure their advertising campaigns are cost-efficient. This involves analyzing which keywords, products, and ad placements are performing best and making data-driven adjustments. Keeping ACOS in check is important, but also optimising for the correct reach will ensure you are getting healthy traffic to your product listings. With atom11, you can handle all these aspects in one place with granular and customized automations. If you are interested in knowing how Atom 11 operates, book a call with us now!