Determine advertising strategy by sub-category conversion rate

Amazon advertising traffic is mainly search traffic and associated traffic. Not all products need to go for search traffic right from the start. For some products, ACOS will explode if they go for search traffic directly.

Let’s take a look at it together:

Advertising ACOS = advertising expenditure/advertising sales

Advertising ACOS = (advertising clicksCPC)/(advertising clicksCVR*average order value)

Advertising ACOS = CPC/CVR/average order value

1 If our small category conversion rate is 8%, the average order value is 50, and the gross profit margin before deducting advertising fees is 30%, substitute it into the ACOS formula:

Advertising ACOS = CPC/CVR/average order value

30%=CPC/8%/50, limit CPC 1.2

2 If our small category conversion rate is 3%, the average order value: 100 US dollars, and the gross profit margin before deducting advertising fees is 30%

Substitute it into the ACOS formula:

Advertising ACOS = CPC/CVR/average order value

30%= CPC/3%/100, limit CPC: 0.9

3 If, Our small category conversion rate is 15%, the average customer price is $20, and the gross profit margin without deducting advertising fees is 30%.

Substitute into the ACOS formula:

Advertising ACOS = CPC / CVR / average customer price

30% = CPC / 15% / 20, extreme CPC = 0.9

Strategy analysis:

The first one, we can understand as semi-standard products, search traffic and related traffic together, put a certain type of root or attribute into an advertising campaign to start phrase matching, and hit the rest of the positions and product pages. The bid for phrase matching is between precise and broad matching. After two weeks, see which position performs best, and then continuously reduce or even close the BID of another position.

The second type can be understood as non-standard products. For non-standard products, we mainly play with associated traffic. We put related keywords or keywords with similar attributes in an advertising campaign, use broad matching to play, and add BID to the product page. After playing with associated traffic, we play with search traffic. Although associated traffic does not help much to improve the natural ranking of keywords, when CVR and BSR rankings are up, there is still a great chance that keywords will enter the second or third page. At this time, we will go back to play with search traffic, and further play the natural ranking of keywords to the homepage by playing the remaining positions of phrase matching and then the remaining positions of precise matching.

The third type can be understood as standard products, and the customer unit price is relatively high, then we can directly play with search traffic, and play the remaining positions or even the homepage through precise matching + BID. First, we will work together, and then use the division of forces to further stabilize the natural ranking of this word. Later, we can also play with associated traffic by playing the product page of precise matching.

Summary: The above methods are for reference only. Sometimes advertising methods are very flexible. The key lies in flexible application and integration.