As part of the Amazon Marketing Services aka Sponsored Ads, Sponsored Products have proven their effectiveness in creating visibility and boosting revenue. However, if you fail to manage your pay-per-click advertisements effectively, they can cost you a lot of money.
Your Advertising Cost of Sale (ACoS) is one indication of how well your campaign is going. A high ACoS signals that you are paying a lot for each sale acquired through AMS. A low ACoS means that you are getting a better ROI on your AMS campaigns.
Our 3 optimization tricks help you to effectively manage your AMS campaigns and reduce your ACoS. But before we start, we recommend that our readers request a free PDF report that shows the real status of their Amazon Ad performance (including ROAS, ad waste, sales potential and more)
1. Use Automatic Campaigns to find relevant keywords and increase sales
Run an automatic and a manual Sponsored Products campaign for the exact same product at the same time. Do some initial keyword research and include them in your manual campaign. Set up an automatic campaign and let both campaigns run. The automatic campaign does additional keyword research for you – so you can find all profitable search terms.
After a couple of days/weeks, check back on your automatic campaign and see which search terms are relevant and/or generate sales. That’s the keywords you then transfer to your manual campaigns for a higher bid and more precise optimization.
2. Optimize product listings for SEO and conversion
There are three steps to the buying process on Amazon:
- A customer finds your product through the search function.
- A customer selects your product by clicking on it in the search results.
- A customer buys your product by hitting the ‘Buy’ button.
AMS campaigns take care of the first step and increase the likelihood of the second. It is then upon you to ensure that traffic created by the campaigns converts into sales. And that’s where Amazon SEO comes in.
Optimizing your product listing for relevant keywords and conversion rates increase the likelihood that a customer is going to click the ‘Buy’ button, thereby reducing your ACoS.
- We recommend the following for listing optimization:
- Research relevant keywords and include them in your backend, title, bullet points, and product description — they indicate to customers that you offer exactly what you are looking for
- Optimize your content for human readers – it should be easy, digestible, and highlight the benefits a customer enjoy when purchasing your product
- Add high-quality pictures of your product
- Make use of the free A+ content option to further highlight the UPSs of your product and tell your brand story
Optimizing product listings for SEO is crucial for the success of your AMS campaigns and is a viable strategy for reducing your ACoS over time.
3. Track and adjust your CPC bids to meet your target ACoS
To meet your target ACoS, you first need to define it. If your primary marketing goal is to increase profits, your target ACoS will be closely tied to your profit margin. Increasing visibility or marketing a new product requires a higher cost in the short term to make more profits in the long term.
Once you know what you are aiming for, you need to regularly track and adjust your cost-per-click (CPC) bid for your relevant keywords.
Monitoring and adjusting keyword bids manually requires a lot of time and expertise. Use Sellics bid automation to save time and optimize your bids continuously.
The general rules are:
- If the keyword ACoS > target value, the bid should be lowered until brought to a desirable ratio.
- If the keyword ACoS < target value, then it should be tested whether the ad’s reach – and sales along with it – can be expanded by raising the bid.
- If keywords aren’t getting enough impressions, it should be tested whether a higher bid can activate them or not.
- Keywords that only generate costs and no conversions, even over a longer period of time – or keywords that can’t be adjusted into a profitable bid price range – should be paused.
With these three optimization tips up your sleeve, you are one step closer to running successful marketing campaigns on Amazon. Our automated services get you all the way there.
The AMS Module of the Sellics Vendor Edition is ideal for vendor teams to efficiently and effectively manage advertising campaigns. Reduce your ACoS with automated bid management and track all important KPIs in one interface.