Practical information sharing! In-depth analysis of Amazon CPC advertising

The placement of advertising on Amazon is an important part of operations. We can get more opportunities to display our products in front of consumers through paid means.

PPC ads are charged by clicks, which means that the click-through rate is actually the most important indicator for the Amazon PPC team. Excellent click-through rate data makes it easier to get excellent display positions. However, every click is a waste of money for sellers, so even if there are many clicks and excellent click-through rate performance, but there is no output, it is recommended to either pass it and stop the loss in time, or try to optimize it again to see if it works. If it doesn't work, stop it directly.

So, how do you determine the output of an ad? Here are three indicators involved: ad conversion rate, ad ACOS, and ad sales ratio.

1. Ad conversion rate

Advertising conversion rate is an indicator to measure advertising effectiveness. By comparing the product's advertising conversion rate with the natural conversion rate, the quality of the current keywords or channels can be intuitively measured.

We can calculate the advertising conversion rate using the following formula:

PS: When setting ads, it is recommended to set them to start during the day and stop at night according to local time. The conversion rate of ads during the day is higher than that at night. We can use third-party tools to operate.

2. Advertising ACOS

ACOS, or Amazon advertising cost of sales, is a key indicator for measuring the performance of sellers' advertising campaigns. When doing CPC advertising, you need to find ways to optimize the ACOS of the advertisement to an ideal ACOS value, which is the highest sales value that the advertisement can bring when the advertising sales break-even point is reached, that is, when the advertising expenditure is relatively reasonable.

So, how do you calculate advertising ACOS?

We can calculate the value of ACOS by the following formula:

Through the formula, we can conclude that the higher the click volume and CPC, the higher the ACOS; the higher the unit price of the product and the higher the advertising sales volume, the smaller the ACOS will be.

Some sellers may ask, since we want to lower ACOS, why not just reduce the number of clicks and CPC, and increase the unit price of the product and advertising sales?

This is a good idea, but don’t forget that advertising spending and advertising sales are mutually constrained:

To put it simply, if you don’t spend money, where will the clicks come from? If there are no exposure and clicks, where will the advertising sales come from?

This is what makes the optimization of PPC advertising extremely complicated. The entire advertising optimization process is a process of continuous testing and real-time adjustment based on existing experience.

So, how should we set the ACOS target? How should we determine whether the current advertising ACOS is reasonable and whether we should increase advertising investment? Here we introduce another concept - advertising sales ratio .

3. Advertising to Sales Ratio

The advertising-to-sales ratio is the ratio of sales brought by advertising to total sales. From this value, we can see the degree of dependence of overall sales on advertising. The higher the advertising-to-sales ratio, the more dependent the overall sales are on advertising, and the lower the overall profit margin will be.

How to customize advertising strategies? We can refer to the "330 Theorem"! That is:

Gross profit margin ≥ 30%

Advertising ACOS ≤ 30%

Advertising sales ratio ≤ 30%

Formulating advertising strategies based on the above three standards can ensure relatively ideal input and output.

When advertising, we need to know the location of our ads so that we can make more refined optimization actions and formulate the most appropriate advertising strategy. However, sellers often encounter a problem when checking the ad location. They cannot find the ad location they have placed on the front desk. What is the reason?

In fact, this is because the sellers forgot to change the zip code or address in the upper left corner. If the address is in China, you cannot view the information of your country of sale. You have to change the address to the address of the country of sale in order to view the display of the advertisement.

Isn't it troublesome to switch back and forth every time? Is there any way to solve this problem?

Here I suggest that you register a buyer account and bind a fixed address. This has several advantages:

1. Buyer accounts can view ad locations

2. To facilitate the handling of follow-selling, you can achieve the effect of driving out follow-selling by sending warning letters, purchasing the inventory of follow-selling, etc.

3. The buyer account has many more unexpected functions, which mainly depends on how we use it.

In short, having multiple buyer accounts can greatly increase our operating limit. Please note that if you have both a seller account and a registered buyer account, and the credit card information used is the same, then there is a possibility of association.

Therefore, it is recommended that you use a virtual card to register a buyer account, so as to avoid being associated with our seller account.

When it comes to virtual cards, you may still be a little unfamiliar with them. Some sellers may have heard of them but don’t know much about them. Are virtual cards useful?

Although a virtual card has the word "virtual" in its name, it has three elements: a card number, an expiration date, and a security code, so it can be used to pay online merchants just like a physical credit card.

So what are the advantages of a virtual card?

1. Convenient and fast: There is no complicated offline procedure for applying for a card, nor does it require a long wait, which is much more convenient than traditional credit cards.

2. Global Payment: It can easily conduct payment transactions on international online websites, such as applying for trademarks, purchasing products, placing advertisements, and purchasing paid software.

3. Safe and secure: Some virtual cards cannot be overdrawn, so there is no risk of malicious overdraft due to card information leakage. At the same time, when using this card, you can effectively avoid the leakage of private information.

4. Support multiple platforms: Some virtual cards can also perfectly support e-wallets such as PayPal, major e-commerce platforms, application stores, and online payment platforms in multiple fields.

Our cross-border e-commerce companies have domestic and foreign business payments, employee consumption and other needs. There are various payment scenarios and forms, including single consumption, subscription consumption, regular deductions, etc. Using multiple cards and paying by scenario can effectively improve security. However, in the traditional banking system, it is very difficult for small and medium-sized enterprises to apply for multiple dual-currency credit cards, and small and medium-sized enterprises rarely have enough human resources to execute the card opening process for new employees. Using virtual cards saves time and effort, and supports international payments. It can be said that it is more suitable for our cross-border e-commerce sellers.

So the question is, there are so many good and bad virtual cards on the market, are there any reliable virtual cards that you can recommend?

According to feedback from some big seller friends, the Airwallex Visa card recently launched is quite easy to use. You can apply for one account to open multiple virtual cards, which can be used to make regular or multiple irregular payments to various platforms in a timely manner.

First of all, a virtual card must be easy to use, support many payment scenarios, and have a high payment success rate to be attractive. Yunhui Visa Card is issued directly in cooperation with Visa, ensuring that this card can be used at low cost, in multiple scenarios, and more stably.

For sellers, whether it is to pay for store rent on e-commerce platforms such as Amazon, or to do CPC advertising as we are talking about today; whether it is to pay for paid operating software such as website building, product selection, CRM, or to pay for third-party suppliers such as registered trademarks, logistics and warehousing, Yunhui Visa Card can easily complete it. Of course, if you want to entrust more professional overseas third-party agencies, such as advertising agencies, marketing alliances, MCN Internet celebrity companies, public relations consulting companies, etc., to help companies complete the corresponding work, this card can also be used to pay them.

In addition to its wide coverage of scenarios, Yunhui Visa Card also emphasizes its advantages in the following aspects, and the experience is indeed good during use:

1. High cashback and multiple benefits

Recently, Yunhui Visa Card launched a limited-time cashback activity, where you can get cashback when you successfully trade using the card, with a cashback rate of up to 0.8%. Previously, there was the Amazon off-site traffic rebate program, and later there was Yunhui Visa Card consumption rebate, which helped sellers reduce operating costs.

2. Truly realize global payment

Most virtual credit cards on the market only support a few currencies, and cannot realize multi-currency direct settlement, which increases the cost of currency exchange. However, Yunhui Visa Card supports more than 10 mainstream currencies such as USD, GBP, EUR, AUD, HKD, etc., saving currency exchange costs and making payment easier.

3. High performance

Directly connect to the Airlink payment account, and support transfers to public accounts with the same name; open cards online and manage cards, no longer need to go to business locations offline. In addition, Airlink Visa Card supports batch card opening, 50 cards can be opened by default, matching different scenarios, and flexible classification and payment at will. If you feel that 50 cards are not enough, you can upgrade to an annual card. After upgrading to an annual card, the default number of cards opened can be increased several times, and there is no additional charge for additional cards. In addition, there is a dedicated account manager to provide attentive service throughout the process.

How to apply?

Scan the QR code below and a SkyHub account manager will contact you. Apply for SkyHub Visa card now and use it to complete international transactions of any amount to enjoy a limited-time 0.8% cashback event.