Hey Guys, what’s up! I know…I know…PPC MATH! Say WHAT!!! Who wants to do PPC MATH when you can just throw your product on Amazon and slam some dollars down on PPC!?!
Don’t worry, I won’t bore you with heavy calculus and linear equations. This is PPC MATH! EVERYONE loves PPC…right? AWESOME, who’s with me? Read on to gain some valuable insights about a killer PPC MATH ATTACK that will help you evaluate your own PPC performance and stop throwing $$$ down that FREAK’N PPC RABBIT HOLE!!!
Okay, so let’s start by addressing some important questions most of my PPC clients ponder:
How the HECK do I hit my target ACoS of 30%? How do I know how much to bid on each KW? Good questions and to many it’s just a dangerous game of BLINDFOLDED DARTS! Some say, “Let’s just throw $1.50 per KW and see what happens!” Others say, “The Amazon suggested bid is $0.75, so let’s try 20 cents above that!”. Well, I’m happy to say that you can take the guesswork out of the PPC MATH equation! Follow me and let’s be like James Brown and…BREAK IT DOWN!
SO, there’s a SUPER COOL way to use your very own historical PPC data to crunch some killer PPC MATH! This will help you tackle the common “How do I hit my target ACoS?” problem. Let’s start with the very important conversion rate calculation. So, how the heck do you calculate conversion rate? Good question…just divide the total number of orders by the total number of clicks. NICE! Let’s say you had 100 orders and 1000 clicks. Well, 100/1000 = 0.1. Now, just multiply by 100% to get a conversion rate of 10%. Very respectable metrics I might add 😊! COOL, now let’s use this in some HIGHER PPC MATH…carry on and DON’T BE SCARED….
Now, that we have crunched our 1st important metric (conversion rate of 10%), let’s look at the ever-important cost per click (CPC) factor. EAZY PEAZY! You can simply grab this number right off the top of your campaign manager. For simplicity sake, let’s say it’s an even $1.00. COOL, now what the heck do with do with this!?! Again, let’s venture on, AND ATTACK…
NICE, so we have our conversion rate of 10% and a CPC of $1.00. Now, let’s factor in our important (and sometimes dreaded) target ACoS! If we expertly foreshadow from above, we remember we have a target ACoS of 30%. Yea, WHEN PIGS FLY…some say! Well, with some fancy PPC MATH, you can better set yourself up to TAKE OFF THAT BLINDFOLD and HIT THAT TARGET! Okay, let’s say we are selling WIDGET X for $20. Now, just multiply the selling price by your target ACoS ($20 X 0.30 = $6). NICE, this tells us that we can spend $6 per KW and still hit our target ACoS. But what about that all-important bid? Continue on the crusade…IF YOU DARE…
Okay, now we need to use that all-important conversion rate in our PPC MATH ATTACK! SO, if we break down our conversion rate of 10%, that means we make 1 sale every 10 clicks (100/10 = 10). AND we know that we can spend $6 per KW and still hit our target ACoS of 30%. SO, all we need to do is divide that $6 by 10 clicks ($6 / 10 = $0.60) to crunch what our ideal starting KW bid should be. AWESOME! Now, we know what our ideal bid should be ($0.60) to hit our target ACoS of 30%. FINALLY…BLINDFOLDS COME OFF!
EYES WIDE OPEN! No more guessing blindly based on random numbers or Amazon’s suggested bid. You used your very own historical data to break it down….I mean come on…James Brown would be VERY PROUD OF YOU 😊
I KNOW..l KNOW…I can hear some of you SHOUTING NOW “$0.60 bids aren’t going to get me JACK $#!& in my niche! Well, that’s the biggest conundrum of PPC, my friends! I hate to say it, but it’s TRUE! You can throw out the highest hail mary bid, jack up your dynamic bid placement, etc….in hopes of miraculously hitting your target ACoS, but the proof’s in the PPC MATH ATTACK! At least now, you don’t have to guess. So, what can we do about this VERY COMMON PPC problem? Let’s carry on and find out…
Okay, so we have a whole $0.60 to bid. Whoop Dee Doo! Well, one COOL thing you could do is break it down even further to the KW level. Instead of grabbing your avg. CPC off the top of the campaign manager, look at your CPC at the KW LEVEL. Here, you’ll find some golden nuggets that have SUPER HIGH conversion rates. Use these to crunch the same PPC MATH and you’ll find you can increase your bid considerably. BOOM…more sales and still HITT’N that target ACoS!
You could also increase your listing conversion rate! If you haven’t fine-tuned your listing with AWESOME images, KILLER graphics, and SEDUCTIVE sales copy, I’d do it PRONTO! By increasing your conversion rate by 10%, you can UP that measly $0.60 bid to a WHOPPING $1.20! DOUBLE TROUBLE! WAIT, there’s more…
You could also create that killer listing and actually INCREASE YOUR PRICE! WHAT…”Are you freak’n crazy!?!”…you ask. I know…I know…believe it or not, selling on Amazon doesn’t have to always be a race to the bottom. Create that KILLER listing and BACK IT UP with a healthy price INCREASE. Raising your price from $20 to $30 can actually raise that bid from $0.60 to $0.90. Couple that with your increased conversion rate of 20% and you’re at a STEALTHY PPC MATH calculated bid of $1.80. Now, we’re IN IT TO WIN IT!
WHEW…for those of you who were BRAVE enough make it to the end…I hope you found some value in this PPC MATH ATTACK! Now, take this and crunch some of your own PPC MATH and ATTACK this further with KILLER listing optimization and GET THOSE SALES! CRUNCH ON, my friends!!!
David Goldstrohm is the owner of PL Prominence, an expert listing and PPC optimization service for Amazon sellers.