How to choose Target ACoS%
The bid per click you see in campaigns is calculated based on the sales price, conversion rate, and the Target ACoS choosed by you.
If you want to focus on profitability (low ACoS) then the bids per click will be lower. On the other hand, if you want to be highly visible in search results, and you are willing to have worse profitability (high ACoS) then bids per click will be higher.
We understand that you would like to have both high visibility and high profitability but you have to find the right trade-off.
|Your goal||Target ACoS||Benefits||Side effects|
|Profitability||20-30%||Higher profitability, You can keep campaigns active for longer||Low visibility if the product is new|
|Visibility||30-50%||High impressions||High ACoS, Budget spent quickly, Forced to pause campaigns when you run out of money.|
If the product has a good CTR and high conversion rate you could achieve good positions in search results even with a low Target ACoS.
What happens if I increase the Target ACoS?
If you increase the target ACoS then we will increase the bids per click of all keywords proportionally to each conversion rate. This will make your product rank higher in search results, receive more clicks on your product page. If the increased visibility did not result in a higher conversion rate, then you may have an increase in ACOS.
Please pay attention, more visibility might lead you to more sales in absolute values but what matters is the conversion rate (orders/clicks) that can increase ACoS. For example, if you increase bids per click by +30% and end up in first position, but if the conversion rate (orders/clicks) is increased only by +20% then you will have an increase in ACoS.
Our recommendationWe recommend choosing the target ACoS around 20%-30% Target ACoS. Increase it only if you want to have more clicks (boost effect) but be aware that this may increase ACoS.
We do our best to make the actual ACoS as close as possible to the target, but please tolerate a margin of error due to campaign with little historical sales (< 30 orders in a month), fluctuations in conversion rates and selling price, competitor outbidding and minimum CPC for top-of-search.
What to do if I have no visibility for low acos?
If the product is new (less than 15 reviews) or the conversion rate of the page is very low, then you may not get many impressions/clicks with target acos set around 20-30%. In these cases gradually increase the target acos every day (+5-10% every day) starting from 30% until you receive the first orders and then gradually reduce it.