What to Do if Your PPC ACoS is Too High
What is ACoS?
Advertising cost of sales (ACoS) is a metric used to measure how much you spend on advertising per dollar of revenue you make.
Here’s an example: If your ACoS is 25%, that means you paid $0.25 for every dollar earned, or $25 for every $100 earned (We’re only looking at Ad spend here, not product costs, Amazon fees, etc).
What is RoAS?
RoAS (Return on Ad Spend) is another metric used to measure Amazon pay-per-click (PPC) advertising campaigns.
Here’s another example: If a campaign has generated $100 of advertising sales, and the ads for the campaign cost $25, then RoAS = $100 / $25 = 4.0. This means that for every dollar you spend on advertising, you’ll earn $4.00 in revenue.
How to decrease ACOS?
You must review your PPC campaigns on a regular basis and analyze your keyword reporting. This report can help you determine whether your recent campaigns were successful. Adjust your campaigns based on the results.
- Set bad-performing keywords as negative
Some keywords are irrelevant or just not converting. You need to set those keywords as negative keywords in order to avoid wasting ad budget on them.
- Double down on profitable keywords
Once you cut down some ad spend from the non-converting keywords, you can instead allocate it to more profitable keywords.
- Increase bids on keywords with low impressions
Some keywords can only bring low impressions because they don’t have enough budgets. You can increase the bids and test for one or two weeks to see if it works.
Choosing the Right Amazon ACoS Based on Your Goals
You don’t have to always lower your ACoS. A high ACoS is not a bad thing sometimes. It’s up to your marketing strategy. The following are some examples.
- Product launch
When you just launched your products that don’t have any historical sales data, Under the same keyword, your bid is definitely higher than your competitors with sales records, reviews, and rankings. At this time, your bid is relatively high but it’s reasonable. Don’t pay too much attention to ACOS at this time.
- Increase brand awareness
If you increase your brand awareness, it’s acceptable to run campaigns at high ACOS because all that matters is impressions. It is fine to have an ACoS of 50% or higher for brand awareness campaigns like this.
Optimize your ACoS today
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