Gap between target ACoS and actual ACos
Advigator analyzes historical data and adjusts bids per click every day so that in the long run the ACoS is as close as possible to your chosen ACoS target. However, there may be situations in which the distance increases.
Conversion rate going down
The conversion rate is calculated as orders/clicks. It measures generated orders for each click. It’s also a proxy to measure quality of a detail page. A downward trend means users are increasingly leaving the product page to buy another product. Advigator recalculates conversion rates each day and assumes that it will be approximately the same across weeks (excluding holidays and seasonality). So, if the actual conversion rate turns out to be lower than expected, it means that the bids per click were higher than expected and thus you overspent to get an order. Thus, ACoS is higher than target. You may see a rising ACoS until the conversion rate is stabilized or increases.
Action: Do a market analysis comparing your product with other competitors from the perspective of price, features described on the product page, secondary photos and customer reviews. Identify and correct weaknesses in your product page. Measure progress by looking at organic and sponsored conversion rates in subsequent weeks.
Decreasing selling price
If you change the sale price then you will have less revenue per order and thus a higher ACoS. Advigator in the following days will recalculate the new average sale price to adjust the bids per click, but you may see an ACoS’s spike in the short term.
If you reduce the price to increase sales you should estimate the increase in conversion rate you expect (also called price elasticity). If you reduce price by -20% and your conversion rate only increases by +10% (from 10% to 11%) then you will have a -12% reduction in sales. Delta ACoS: (0.8 * 1.10) - 1 = -0.12
To have net zero effect on ACoS after reducing price by -20% you will need a +25% increase in conversion rate (from CVR 10% to 12.5%). Delta ACoS = 0.8 * 1.25 - 1 = 0
You may have entered keywords that are not relevant to your product because they were copied and pasted from other software. If the product is new, and there are no keywords in the Targeting section, then it makes sense to add 3-4 keywords to start. Check that the keywords you add actually relate to your product. Try to simulate a search on Amazon, you should expect search results like your product. Avoid adding keywords that refer to complementary products if you want to focus on ACoS (sales efficiency).
Custom keywords with fixed bid
If you add custom keywords with a fixed bid you need to know that Advigator will never go to change that bid because it prioritizes your actions. If you have entered a very high bid for phrase or generic matches then consider that you may be throwing a lot of money away on search terms that have little to do with your product. Therefore use custom keywords with fixed bid only if you know what you are doing, have time and resources to control them, and are aware that you may have an ACoS greater than the ACoS target.
Poor launch strategy
We usually see new sellers starting with high ACoS Targets (50-70%) even if the product page is not of good quality. This is what happens technically:
- A very high ACoS target will lead to very high bids per click and therefore the product will come out in the first search positions
- Since the product is new it is likely that there are few reviews, the main photo is not of quality or too many non-product specific keywords have been entered. This will mean that the CTR will have a surge and then collapse when Amazon realizes that it has given too much visibility to a product that is not yet ready.
- The low CTR (click-through rate) will cause the CPC (cost per click) to be high due to how the ad auction are made. Technically, your CPC is higher if the competitor in the next position in the search results has a better CTR than yours.
- Higher costs per click and low CTRs will lead to worse positions even when you go to reduce your acos target and bids per click.
Before running pay-per-click (PPC) advertising on a new product, we recommend to make sure product detail page has professional images, 5-15 reviews, title and bullet points written according to official Amazon guidelines.
Too ambitious target or little data
- If your niche market settles on a certain level of ACoS, it is difficult to be competitive with much lower bids per click. You could only have a better ACoS than your competitors if your product page has a higher conversion rate or higher sales per order.
- ACoS metric may be of little significance if your product generates a few clicks (<1000/month) or a few orders (<30/month). At first, it is best to focus on product page quality, customer reviews, and conversion rate.
- Don’t pay much attention to the ACoS of individual keywords, but focus on the ACoS of the product. Click data at the keyword level could be low and not statistically significant.
Low conversion rate due to poor detail page
We see products with high ACoS even in cases where the seller does not follow Amazon’s official guidelines for the product page. In particular, these are the most frequently seen weaknesses:
Title too long, stuffed of not specific keywords
We recommend staying under 150 characters for ease of readability. Use the top 3-4 search terms from which you get orders (visible in the targeting section of Advigator) and build a meaningful sentence. Don’t stuff high-volume keywords in your title just because they are high traffic. Enter variation name (color, size) at the end of the title wrapped in round brackets.
Make sure that the title on mobile contains the distinctive search term so that your customer can understand what it is without having to click the search result to read the full title.
Less than 15 reviews
It is recommended to have at least 15 reviews and 3.5+ stars, otherwise consumers may abandon your product page after the click. You can use Amazon Vine to get the first reviews and solicit the review request for each order.
Wrong browse node
Some sellers move the product to a low-traffic browse node to more easily win the “best-selling” badge. This can lead to searchability worsening because the Amazon search engine will consider your product less relevant to common search terms for products entered in the real browse node because it was entered in another.
Make sure the main photo is a pure white background with the product in the foreground and clearly visible from mobile. Compare the main photo with that of the competitors in the category and try to keep the same shot.
The secondary images should show the technical characteristics of the product, the benefits, frequently asked questions and doubts, how it works and the context in which it can be used. You can analyze secondary photos used by competitors with our free Google Chrome extension.
Only describe the additional benefits in a concise and concise form. Stay under 200 characters to improve the readability of the product page. No wall of text.
For more info, follow Amazon’s official guidelines very carefully. We understand that you may find short-term hacks and have good results but we notice that products with good ACoS are also the ones that most closely follow official Amazon’s guidelines.