Strategies for Lowering ACoS (Advertising Cost of Sales) in Amazon PPC

At a time when the Amazon PPC advertising market is growing at a phenomenal rate, it's important to understand what can be done to lower ACoS (Advertising Cost of Sales). Although some sellers are able to achieve profitable sales without spending much on advertising, it is possible for those who don't have enough budget available or those with low product velocity to significantly reduce their ACoS by using different strategies. In this article, we will look at some useful tips that can help you achieve a lower cost per sale while maintaining a high click-through rate.

What is ACoS in Amazon PPC?

ACoS, or advertising cost of sales, is the ratio of ad costs to sales. It's a key metric for Amazon PPC because it tells you how well your ads are performing and how much money you're paying for each sale. In other words, ACoS is an indicator of how much money your business has spent on advertising compared to what has been made from those ads (i.e., profit).

For instance, if an advertiser had an ACoS percentage of 10% in January 2019 and then increased their budget by 50%, then they would expect their ACoS percentage to increase as well--but only if there were no other changes made (such as improving targeting).

Know what you're spending.

Before you can lower your ACoS, it's important to know what it is. You can find this information in the "Advertising Budget" section of your campaign's performance report.

The daily spend is the amount of money Amazon has spent on your ads over the course of a day. This number should be less than or equal to your budgeted amount for that day (which we'll talk about in more detail below).
The monthly spend shows how much Amazon has spent on your ads over all time since they started running them-including both past months and current ones. It also includes any additional fees from using Enhanced Brand Content or Sponsored Brands as well as any refunds from negative feedback/customer complaints.
Lifetime spending includes all costs associated with this campaign so far: both advertising and non-advertising expenses like Amazon fulfillment fees for orders placed through sponsored product links or subscriptions sold through AdWords Express campaigns

Don't bid blind.

Before you start bidding on keywords, research the search volume and competition of each keyword. You can do this by using Amazon's free keyword tool and explorer.

In addition to researching your own keywords, look at the ads of your competitors' products by searching their ASINs (Amazon Standard Identification Numbers). This will give you an idea of which keywords they're bidding on and how much they're spending on those specific terms.

Take a look at your competitors.

Before you can improve your ACoS, you need to know where it stands compared with other sellers in the same product category. The best way to do this is by using the Amazon Advertising Intelligence tool (Ai). This free tool provides access to data from millions of keywords and ads, allowing sellers like yourself to see what's working for other sellers in terms of keywords and bids. You'll also be able to see which products are most profitable for each competitor so that when it comes time for selecting keywords on your own campaigns, you'll know how much profit potential there is in each keyword group and can therefore spend more money on more profitable terms without running out of budget too quickly or putting too much money into less lucrative ones just because they're cheaper per click than others."

Manage your bids by keyword.

Bidding by keyword is the most profitable way to manage your campaigns. You can set a maximum bid for each keyword, a minimum bid, and even an adjustment (percentage) that will increase or decrease your campaign's cost per click in relation to how well you are doing with that particular keyword.

For example, if you have two keywords with similar quality scores but different costs per click, then it makes sense to set up separate campaigns targeting each one. In this case, we'll want to set up both campaigns so they use manual CPC bidding so we can control how much we pay per click on each keyword individually without having any effect on other keywords in our account

Use negative keywords in your campaign.

Negative keywords are used to prevent your ads from showing for irrelevant searches. For example, if a shopper searches for "red shoes" and you sell blue shoes, it's a good idea to add the negative keyword "red" because you don't want to pay for clicks that lead nowhere.

Negative keywords help you be more targeted in your ads by excluding certain types of shoppers who aren't interested in buying what your business has to offer. In addition, negative keywords can help save money on PPC campaigns by reducing unnecessary impressions and clicks (resulting in lower ACoS).

Bid differently for different ad types.

Use targeted campaigns for long-tail keywords.
Use broad match for broad keywords.
Use phrase match for exact matches.
Avoid irrelevant clicks by using negative keywords, which are words or phrases that you want to avoid showing your ads to (for example, if you sell shoes and don't want your ads showing up on searches containing the word "shoes" or even shoe-related terms like "sneakers" or "flats," then those terms would be good negative keywords).

Maintain a steady flow of traffic to your product listing page (PLP).

The first step to lowering your ACoS is to maintain a steady flow of traffic to your product listing page (PLP). This can be achieved by using the right bidding strategy and targeting keywords that are relevant to your product.

Using negative keywords will help you exclude poor performing keywords from being triggered by your ads, which in turn helps reduce wasted spend on irrelevant searches and leads people who may not be interested in buying into making purchases. In addition, using different ad types for different products also helps reduce wasted spend on irrelevant searches as well as improve ROI by promoting multiple products at once instead of just one at a time

It is possible to lower ACoS on Amazon PPC campaigns, but you have to be strategic about it!

Here are some key tips:

Know what you're spending. The first step in lowering your ACoS is understanding how much money you are spending on each keyword and ad group. You can find this information in the "Advertising" tab of your Amazon Seller Central account under "View Reports." This report will tell you how much money has been spent on each keyword and ad group over time, as well as provide other useful metrics like click-through rate (CTR) and conversion rate (CVR).
Don't bid blind--take a look at competitors' bids before setting yours. Once again this is where competitive intelligence comes into play: look at who else is bidding on similar terms as yours so that when deciding whether or not they should be part of your campaign(s), their bid prices will inform yours accordingly based upon what type/quality score range these ads fall within (high vs low).

How to Lower Your ACoS in Amazon PPC

Know your ACoS. The first step to lowering your ACoS is to understand how it works, so you can identify opportunities to reduce it.
Know your competitors' ACoS. You'll want to know what the average cost-per-click (CPC) is for keywords that are relevant and converting well for them, as well as what they're bidding on those terms. This will help you set accurate bids that will keep you competitive while still keeping costs down.
Bid more for high ROI keywords: If a keyword has an ROI of 10x or more, then bidding higher on it will have less of an impact on profitability than if there were only one other competitor bidding on it with a lower bid amount--assuming there aren't any other factors affecting profitability such as product type or lost sales due to poor ad copy or landing page performance!
Use more exact match keywords: If you have a large number of branded terms, broad match may be the best option for you. However, if there are only a few relevant searches for your brand name each month and those are converting well, then using more exact match keywords will help keep costs down. Use negative keywords: Negative keywords help you remove irrelevant traffic from your campaign so that only qualified visitors who are likely to convert see your ads.

Check Your Competitor's ACOS

The easiest way to improve your ACoS is by comparing it with your competitors. This is because you can see what they are doing that you aren't, and vice versa. This will help you understand how other sellers are bidding on keywords, what keywords they're excluding, and whether there are any gaps in their strategy that should be filled by yours.

For example: if one seller has an ACOS of $0.35 per click but another has a much higher ACOS of $1.50 per click (and still makes more sales!), then the first seller must be targeting fewer keywords and/or excluding very expensive ones from their campaign(s). You could do both of these things as well--but only if you're aware of this information from the start!

Bid More for High-ROI Keywords

Bid more for high-ROI keywords.
Bid less for low ROI keywords.
Bid more for high competition keywords.
Bid less for low competition keywords

Run Multiple Campaigns and Broad Match Campaigns

To lower ACoS, you should run multiple campaigns and broad match campaigns. Broad match campaigns are more broad, so they will show up for more searches. You can use broad match campaigns to get more impressions, but it is more expensive. You can also use them for conversions if that makes sense for your business model or product line (e.g., if you have a lot of similar products).

Exclude Poor Keywords From Your Search Campaigns

Exclude Poor Keywords
Remove Keywords That Are Not Converting
Remove Keywords That Are Not Relevant To Your Product
Remove Keywords That Are Not Relevant To Your Business

Split Up Product Groups into Separate Campaigns or Product Groups

One of the best ways to lower ACoS is by splitting up product groups into separate campaigns or product groups. For example, if you're selling shoes and bags in the same campaign, you should consider creating two separate campaigns: one for shoes and another for bags. This way, you can focus on optimizing each individual campaign without worrying about how they're performing together as a whole. You'll also be able to optimize bids differently depending on which products are part of each campaign--for example, if it's cheaper per click (CPC) to bid high on keywords related to bags than it is on keywords related to shoes because there are fewer buyers searching those terms compared with other categories like clothing or accessories where there may be more competition between advertisers bidding higher amounts per keyword click due solely because they want those clicks badly enough!

If you want to lower your ad costs, make sure that you don't overspend on poor keywords.

Keywords are the words and phrases people use when searching for products on Amazon. The more specific the keyword is, the more targeted it will be for your product listing page (PLP). So if someone searches "cute dog collars" on Amazon and clicks through one of your ads, chances are good that they're looking at buying a collar for their pooch!

But there's also another side to this equation: not all keywords are created equal; some have higher competition than others--and therefore cost more money per click (CPC). So before committing any budget dollars to PPC campaigns, take some time exploring both sides of this equation by doing some research into what kinds of terms users tend toward when searching within certain categories or subcategories within AMS itself.

Conclusion

In the end, it's all about finding the right balance. You don't want to spend too much money on PPC ads and risk losing money on each sale, but you also don't want to under-invest in this channel and miss out on potential customers who could turn into repeat buyers. The best way to find that balance is by testing different strategies with your own campaigns--and then tweaking them based on what works!

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