ACoS, or advertising cost of sale, is a metric that's often on top of sellers' minds. It shows you how much ad sales you are generating for every dollar spent on advertising.
While ACoS can be helpful, it's important to keep in mind the Flywheel Effect and analyze your ad spend in the context of your overall business. The best measure of this is your total ad cost of sale, or TACoS. Learn more about TACoS here.
Below are some common scenarios that can result in high ACoS...and how you can take action:
Spending on ads and driving traffic and clicks, but not converting into sales
The issue could be with your product listing page. Make sure your listing page is optimized to convert every visitor into a sale. This includes evaluating:
- Images: use a combination of product and lifestyle images
- Titles: make sure your product title is descriptive and includes keywords relevant to your product
- Bullet points: Use bullets to highlight product features
- Enhanced brand content: Tell your brand's story and provide rich, descriptive detail
You are generating a lot of spend, but sales are not keeping up
You could be spending money on the wrong keywords. Make sure you are using a mirror campaign structure to only add those keywords to your manual campaign that have resulted in sales; add negative keywords to cut down on wasted ad spend; and make sure you are automating bid adjustments based on each individual keyword's performance.
Selling in a competitive category
If you are in a competitive category, a high ACoS might be inevitable due to the high cost-per-click (CPC). In these instances, you want to make sure your MACS is set according to your objectives and margins. Keep in mind, a lower MACS could result in lower traffic and sales volume.
Using bidding strategies in Seller Central
Turn OFF bidding strategies on Amazon. Implementing dynamic bidding or placement-level bidding in Seller Central can result in rapid increases in spend. Check out this collection to learn more about these strategies, how they work with our bidder and what setting to use.