What’s up everyone? I hope you’re having a terrific weekend! I just wanted to drop a quick post breaking down ACoS and how this might help increase your sales, on Amazon. Don’t worry…I’ll try not to make it too boring and easily digestible! LET’S DO THIS...
Okay, so who’s ever thought about what ACoS really means? We all know that we should target an ACoS % that matches our PPC goals (i.e. a higher % to drive traffic/awareness, a lower % to increase profitability), but how many of you have really looked at the true equation of ACoS and thought of ways to improve this? If you’re not raising your hand, continue reading for a cool breakdown…
Okay, so if we breakdown the equation for ACoS, our advertising ACoS is equal to ad spend divided by ad sales (ACoS = ad spend/ad sales). Cool! So, if we dive a little deeper into the top part of the equation, that really means that any factor or result that increases the numerator (i.e. ad spend) will increase our ACoS. Conversely, any factor that decreases the numerator (i.e. ad spend) will decrease our ACoS. AWESOME! Therefore, one way to lower our ACoS is to simply lower the amount of wasteful ad spend we have.
Now, if we dip below the line and zero in on the bottom part of the equation, we see that any factor or result that increases the denominator (i.e. ad sales) will decrease our ACoS. Conversely, any factor that decreases the denominator (i.e. ad sales) will increase our ACoS. NICE! Therefore, another way to lower our ACoS is to simply increase the amount of targeted ad sales we have.
Well, this is all fine and dandy, but how the heck do we do that? Good question…let’s carry on and I’ll breakdown some ways to help you potentially decrease your ACoS numerator (i.e. ad spend) and increase your ACoS denominator (i.e. ad sales)!
DECREASING ACoS NUMERATOR (i.e AD SPEND):
· Lower CPC: Target less expensive, long-tail KWs.
· Focus KWs: Include only your top performing KWs.
· Lower Bids: Reduce bids on poor performing KWs.
· Cut Waste: Negative poor performing search terms.
INCREASING ACoS DENOMINATOR (i.e. AD SALES):
· Sales Copy: Target listing copy to your exact target buyer.
· Images: Increase conversions with high-quality images.
· Graphics: Highlight key product benefits in your graphics.
· Get More Reviews: Good email follow-up that converts.
Overall, I hope this opens your eyes to the fact that ACoS is much more than just some % we are chasing. When you actually break it down, you’ll find some great ways to potentially lower it!
Now, go BREAK IT DOWN and CRUSH IT!
David Goldstrohm is the owner of PL Prominence, an expert listing and PPC optimization service for Amazon sellers.