Mastering ACoS Optimization: 10 Tips for Success on Amazon.com
With new brands and products popping up on amazon.com on the daily, one of the ways to boost the discovery of your brand as a cross-border commerce seller on Amazon is by investing in advertising. Here, we share our top 10 tips for optimizing your Advertising Cost of Sales on amazon.com.
These days, you can find anything and everything on amazon.com, whether it’s something as niche as miniature picnic tables for squirrels (yes, there is a demand for this!), or something as timeless as all natural skincare products.
That said, if you don’t already have a legion of loyal customers searching for your brand’s products specifically, one of the ways to boost your brand’s presence and to drive conversion on amazon.com is through advertising.
While it’s easy to split your advertising budget evenly across the many different advertising solutions available to Amazon’s cross-border commerce sellers, the real challenge lies in determining what works best for your brand and allocating your budget strategically among these solutions to maximize your return on investment. This process is commonly referred to as optimizing your Advertising Cost of Sales (ACoS) to ensure you get the most value for your investment. But before we jump into our top 10 tips for
ACoS optimization, it’s important to understand what ACoS is exactly, and how it should be analyzed.
These days, you can find anything and everything on amazon.com, whether it’s something as niche as miniature picnic tables for squirrels (yes, there is a demand for this!), or something as timeless as all natural skincare products.
That said, if you don’t already have a legion of loyal customers searching for your brand’s products specifically, one of the ways to boost your brand’s presence and to drive conversion on amazon.com is through advertising.
While it’s easy to split your advertising budget evenly across the many different advertising solutions available to Amazon’s cross-border commerce sellers, the real challenge lies in determining what works best for your brand and allocating your budget strategically among these solutions to maximize your return on investment. This process is commonly referred to as optimizing your Advertising Cost of Sales (ACoS) to ensure you get the most value for your investment. But before we jump into our top 10 tips for
ACoS optimization, it’s important to understand what ACoS is exactly, and how it should be analyzed.
ACoS vs TACoS
For the uninitiated, ACoS is a calculation of the profitability of your advertising campaigns, and is derived by taking (total ad spend/total ad sales) x 100. By this metric, a lower ACoS would generally translate to a higher profitability, though a higher ACoS can sometimes be beneficial in the long-run, especially when boosting a new brand or product during peak shopping periods and events.
What’s important to note is that your brand’s ACoS should always be analyzed alongside your Total Advertising Cost of Sales (TACoS), which is derived by taking (total ad spend/total sales revenue) x 100. This would give you a more holistic view of your brand’s total sales, as TACoS also takes organic sales into account, allowing you to plan for your brand’s long-term growth.
What’s important to note is that your brand’s ACoS should always be analyzed alongside your Total Advertising Cost of Sales (TACoS), which is derived by taking (total ad spend/total sales revenue) x 100. This would give you a more holistic view of your brand’s total sales, as TACoS also takes organic sales into account, allowing you to plan for your brand’s long-term growth.
As you continue to run ads, your sales rank is likely to improve, which might also lead to an increase in customer reviews on your product listings as more new customers purchase and leave their thoughts on your products.
In this way, the positive impact of your advertising campaigns can extend beyond the immediate influence of the boosted ads themselves, by potentially swaying customer perceptions and informing purchasing behaviours in the long run. As such, a lower TACoS can indicate that your brand awareness is growing among customers, and that your advertising efforts are effectively driving organic sales.
So now that you’ve got a better idea of what ACoS is and represents, here are our top 10 tips for optimizing your ACoS as a cross-border commerce seller on Amazon.
In this way, the positive impact of your advertising campaigns can extend beyond the immediate influence of the boosted ads themselves, by potentially swaying customer perceptions and informing purchasing behaviours in the long run. As such, a lower TACoS can indicate that your brand awareness is growing among customers, and that your advertising efforts are effectively driving organic sales.
So now that you’ve got a better idea of what ACoS is and represents, here are our top 10 tips for optimizing your ACoS as a cross-border commerce seller on Amazon.
Tip 1: Ensure your listing pages are clear, concise, and competitive
This might be a no-brainer, but the first and most important thing that new customers will look at is your listing page, so in order to make a good first impression, make sure that you have high-resolution images, detailed product descriptions, and bullet points of key functions and features presented clearly.
Reviews also go a long way in convincing customers to purchase your products, so it would be helpful if your products have at least 15-20 reviews with an average rating of 3.5 stars and above¹, before driving any paid traffic to your listings. For new sellers, Amazon Vine is a great way to beef up reviews on your
new listings.
Reviews also go a long way in convincing customers to purchase your products, so it would be helpful if your products have at least 15-20 reviews with an average rating of 3.5 stars and above¹, before driving any paid traffic to your listings. For new sellers, Amazon Vine is a great way to beef up reviews on your
new listings.
An example of a good listing page that includes clear, succinct product information
such as key ingredients, instructions, customer reviews, and the brand’s ethos.
such as key ingredients, instructions, customer reviews, and the brand’s ethos.
Tip 2: Do in-depth keyword research and experiment, experiment, experiment
One of the most popular advertising solutions on Amazon is our Sponsored Products, which are cost -per-click ads that promote individual product listings on Amazon. They’re easy to use, and even easier to set up, but before jumping into them, make sure you do sufficient keyword research first.
This means that you shouldn’t include any and every keyword you can think of. In fact, keyword dumping can increase bounce rates and deplete your budget fast. Rather, consider conducting A/B tests and research into trending keywords, so that you’ll be able to find the best, most relevant keywords to drive conversion for your Sponsored Products ads.
This means that you shouldn’t include any and every keyword you can think of. In fact, keyword dumping can increase bounce rates and deplete your budget fast. Rather, consider conducting A/B tests and research into trending keywords, so that you’ll be able to find the best, most relevant keywords to drive conversion for your Sponsored Products ads.
Tip 3: Optimize your keywords
In any given list of keywords, some would naturally perform better than others, so we recommend fine-tuning your keyword selection by using broad, phrase, and exact match types.
Think of it as a funnel, where broad match targets the widest range of customers, followed by phrase, and exact match. Simply put, broad match keywords will be matched to search terms that are broadly related to your keywords, and can include misspellings, synonyms, and other related search terms. Phrase match keywords will be matched to search terms that consist of a variation of your keyword phrase, while exact match keywords will be matched to search terms that are exactly the same as your keyword phrase.
Think of it as a funnel, where broad match targets the widest range of customers, followed by phrase, and exact match. Simply put, broad match keywords will be matched to search terms that are broadly related to your keywords, and can include misspellings, synonyms, and other related search terms. Phrase match keywords will be matched to search terms that consist of a variation of your keyword phrase, while exact match keywords will be matched to search terms that are exactly the same as your keyword phrase.
Examples of broad, phrase, and exact match types.
All three match types have their pros and cons, which is why we recommend using them together. Always start off with broad match to gain a better understanding of what customers are searching for, then later, invest more in specific reach with phrase and exact match. We’d recommend still keeping broad match open to continue to harvest new keywords that you can then use in your phrase and exact match types as you go along.
Tip 4: Don’t stop experimenting
Just as customer behaviours and needs are always changing, so should your advertising strategies. Experimenting with different types of advertising solutions, keywords, and targeting can all help to improve the efficacy of your campaigns, so make sure that you’re consistently monitoring all campaigns you run so that you can pivot quickly according to what’s working best at any given moment.
Tip 5: Remove negative keywords
As you continually add on relevant, targeted keywords, you should also remove irrelevant or negative keywords that are not performing well, so as to prevent unqualified traffic or high bounce rates on your listing pages.
Tip 6: Prioritize your top-selling products
As a seller with a limited advertising budget, it’s wiser to focus on the top 20% of products that sell best in your store as opposed to boosting your entire catalogue. By prioritizing products that have already been proven to sell well, it would be easier to then drive sales and traffic to your brand and store, which would result in an increase in visibility and, potentially, sales across your entire range of products as well.
Tip 7: Don’t neglect Sponsored Display ads
If Sponsored Display ads are something you haven’t paid much attention to, you’ll be pleasantly surprised once you try it out.
This retail-centric display solution has a wide range of benefits for sellers, the first of which being an increase in product visibility on Amazon. As Sponsored Display ads are displayed prominently on product detail pages, search result pages, and even on off-Amazon third-party sites, the reach of theseads is a lot wider than your typical Sponsored Products or Sponsored Brands ads.
What’s more, you can also leverage Amazon’s extensive data pool and targeting options like product interests, shopping behaviours, and even amazon.com footprints to reach more specific audiences. With these different levels of targeting, Sponsored Display ads would allow you to reach the right customers at the right time, maximizing the effectiveness of your ad campaigns.
Apart from driving sales, Sponsored Display ads also help to build brand awareness. By prominently displaying your brand and product information, you can create familiarity and recognition among new, potential customers, which could lead to an increase in brand loyalty and repeated purchases down the road.
These ads can also be used to cross-sell complementary products to customers who have shown interest in similar items, or who are already engaging with your brand on Amazon. This can help to increase customers’ average order value and drive additional sales by suggesting different, relevant products to customers during their shopping journey. It could also help customers consider more of the products you offer when you target ads to appear on your own product listing pages.
This retail-centric display solution has a wide range of benefits for sellers, the first of which being an increase in product visibility on Amazon. As Sponsored Display ads are displayed prominently on product detail pages, search result pages, and even on off-Amazon third-party sites, the reach of theseads is a lot wider than your typical Sponsored Products or Sponsored Brands ads.
What’s more, you can also leverage Amazon’s extensive data pool and targeting options like product interests, shopping behaviours, and even amazon.com footprints to reach more specific audiences. With these different levels of targeting, Sponsored Display ads would allow you to reach the right customers at the right time, maximizing the effectiveness of your ad campaigns.
Apart from driving sales, Sponsored Display ads also help to build brand awareness. By prominently displaying your brand and product information, you can create familiarity and recognition among new, potential customers, which could lead to an increase in brand loyalty and repeated purchases down the road.
These ads can also be used to cross-sell complementary products to customers who have shown interest in similar items, or who are already engaging with your brand on Amazon. This can help to increase customers’ average order value and drive additional sales by suggesting different, relevant products to customers during their shopping journey. It could also help customers consider more of the products you offer when you target ads to appear on your own product listing pages.
Tip 8: Try out keyword targeting with Sponsored Brands ads
For cross-border commerce sellers on Amazon with three or more listed products, Sponsored Brands ads can be helpful in promoting your top-selling products, and growing your brand presence in a dynamic way. These ads feature your brand logo, a custom headline, and your top three products, and appear on shoppers’ pages based on their keyword searches.
These ads also link directly to your brand’s storefront page, so do ensure that your Amazon storefront is optimized for conversion as well!
These ads also link directly to your brand’s storefront page, so do ensure that your Amazon storefront is optimized for conversion as well!
Tip 9: Make use of data to continually improve upon your campaigns
Apart from continually optimizing your listings and storefront, it’s just as important to check in on the effectiveness of your ads campaigns regularly, and revisit your goals and adjust your bidding accordingly through the Amazon ads console. You’ll want to make sure that your bids and ads are competitive, so as to gain more visibility and conversions.
Tip 10: Testing should last a minimum of two weeks
Examples of the different types of Sponsored Brands ads.
Examples of Sponsored Display ads and their two distinct strategies—contextual targeting and
For every test that you run on Amazon ads, the best practice is to wait a minimum of two weeks before tweaking your campaign in any way². This is because statistically, conversions and web traffic can vary wildly over time, so the two weeklong buffer is crucial in ensuring that the data you collate is statistically significant. This ensures that the data you analyze is representative of your campaign’s performance and not influenced by random fluctuations, reducing the risk of making premature adjustments based off of incomplete or unreliable information.
These two weeks would also allow your campaign to gather a sufficient amount of data for analysis, including impressions, clicks, conversions, and other key performance metrics. Generally, the more data points you have, the better an understanding you’ll have of your campaign’s performance, and the more informed you’ll be when making changes to optimize your campaigns.
And there you have it, 10 tips for optimizing your ACoS on amazon.com. Of course, there’s a lot more that can be done to make the most out of your Amazon ads, which can be discovered through experimentation and testing over time, but for all sellers, this makes for a pretty good starting point.
Now go forth and start boosting those products!
These two weeks would also allow your campaign to gather a sufficient amount of data for analysis, including impressions, clicks, conversions, and other key performance metrics. Generally, the more data points you have, the better an understanding you’ll have of your campaign’s performance, and the more informed you’ll be when making changes to optimize your campaigns.
And there you have it, 10 tips for optimizing your ACoS on amazon.com. Of course, there’s a lot more that can be done to make the most out of your Amazon ads, which can be discovered through experimentation and testing over time, but for all sellers, this makes for a pretty good starting point.
Now go forth and start boosting those products!
¹ Amazon Internal Data: Oct 1, 2020 – Sep 30, 2021
² Amazon Internal Data: Oct 1, 2020 – Sep 30, 2021
² Amazon Internal Data: Oct 1, 2020 – Sep 30, 2021
Note: Please note that the above content and any suggestions provided by Amazon are purely for your information only and should not be a substitute for your own judgment about the demand for your products. Many factors influence the demand for your products, including price fluctuations, consumer demand shifts, and sellers remain responsible for determining the products they sell and their prices. The above must not be construed as a guarantee of future results and Amazon disclaims any responsibility in connection with the efficacy of these suggestions for your business.
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