3 Amazon Advertising Metrics Beyond ACoS to Improve Amazon Ad Performance

With Amazon advertising, knowing the key metrics and how to manipulate them to their advantage can be a complete game-changer for sellers.  If you are a seller on Amazon, Advertising Cost of Sales (ACoS) is a critical metric that you should know how to optimize to derive the maximum benefit from your sales efforts. ACoS acts as a clear indicator of the efficiency of your ad campaigns. 

However, there are also metrics other than ACoS that can help you improve your product visibility and drive brand awareness and overall sales using Amazon Ads. This blog will discuss these parameters and how to optimize them to achieve your business goals.

3 Amazon Ads Metrics to Improve Campaign Performance

1. Click-Through Rate (CTR)

This metric helps you understand how relevant and attractive your ad content is for a specific search query. For example, if you run an ad for blue shoes, the number of clicks you get on your product through that ad refers to the CTR. 

However, it is vital to note that increasing your CTR does not guarantee conversions, although it skyrockets the chances of attracting potential customers and boosting sales.

How can you improve your CTR? 

a. Advertised product

If your advertised product has low ratings or ineffective and small images, your ad will have a low CTR, regardless of how targeted the campaign is. Make sure you allocate your advertising dollars to your best-performing products. The more comprehensive and attractive they are, the higher the chance that your audience will click on them. Amazon ad analytics and ad automation software like atom11 make it easy to understand your spend on various product bands (top-selling vs. low-selling).

We have talked about this in detail in the below video. 

b. Targeted keywords

Aim for keywords that are relevant to your product and ensure you exclude keywords that are irrelevant but still appear for your ads. For sponsored brands, a good lifestyle image paired with an attractive ad copy should help increase CTR and drive better performance.

c. Targeted ASINs/Subcategory

If you want to target other ASINs and get your product ads on other product detail pages, ensure that you are targeting ASINs within the same price range or a slightly higher one. Targeting ASINs with lower or significantly higher prices will give you the least results.   

d. Improving your CTR for Sponsored Brands (SB)

To improve your CTR for SB ads, here’s what you can do:

• Use custom images

Create engaging and unique ad creatives. Have good imagery that represents your brand, and tell your brand's story in an engaging way. This way, you will attract more shopper interest than simply posting your logo and the main image. Ensure that the images also use witty copy content and have an attractive design showcasing your product as the hero.  

We have talked about custom images in the video below: 

• Craft a catchy headline and copy

The content you put out reflects your brand. Ensure that there are no grammatical errors. Write clever headlines containing crucial product information. Invest in creating unique designs for your products that will help catch the eye of consumers, especially first-time shoppers, in a sea of choices.  

• Utilize Top of Search displays

If your ad appears near the top of the search area, the CTR increases by 2 times or more. This is why it is essential to win more ad impressions on the ‘top of search’ displays. Generate and use the placement reports to ascertain the difference in CTRs for different ad placements. Try to get more impressions through ‘top of search’ displays. 

• Display product ratings

Products with low ratings and negative reviews are significantly less likely to be clicked and result in a conversion. In your hero brand campaigns, use only ASINs with ratings above 3.5 and, ideally, good reviews. If you do not have any products with good ratings, avoid including any ASINs in your ad creatives.   

2. Cost Per Click (CPC)

Not to be confused with bid, CPC is the total amount of money paid for each click on the advertisement (whereas a bid is the maximum amount advertisers are willing to pay for their ad placements). 

For example, if you have invested 10$ in your product ad, and got 5 clicks, then your Cost per click is 10 divided by 5, i.e. $2. Amazon Ads CPCs have grown from 0.23$ to 1.2$ per click in the last 7 years. 

How to reduce your CPC?

a. Bid automation

Bid automation helps you reduce your CPCs on low-performing search terms and increase bids on high-performing ones. You can implement bid automation using any parameters—spend, sales, ACoS, conversions, CPC, and bids. We have outlined some effective bidding strategies that can not only help you lower your CPC but also increase ad sales by using the right parameters to make bid changes.   

b. Search term negation

Identifying irrelevant or unprofitable terms early and negating them ensures that your ads only reach the most relevant audience, maximizing efficiency and reducing overall spend. You can use the Amazon Ad console for this. atom11 provides a simple rule-based search term negation that can be used to control wasted ad spend (example below) and lower ACoS.

Want to learn more about search term negation? Here’s the ultimate guide to search term negation and how you can use it to achieve your ad objectives.

c. Dayparting

Dayparting means aligning ad placements with consumer behavior patterns to maximize engagement and conversions. This can make your CPC more efficient by increasing spend during high-performing hours and reducing it during low-performing hours. You can use the Sponsored Ads Hourly Report to set up dayparting and automatically adjust bids in real time as needed.   

For a more detailed explanation, watch this video.

d. Top of search bid adjustment

While top of search bid adjustments help you increase your CTR, they also have the highest CPCs. To reduce your CPC, check the ratio of ad spend on different placements and reduce Top of search spend. 

On atom11, you can set up automations to reduce low-performing bids weekly:

3. Conversions (CVR)  

The ultimate fruit of all your advertising efforts is conversion. It is calculated as Orders divided by Clicks. 

For example, if you get 10 orders from 100 clicks, your conversion is 10 divided by 100, i.e., 10%. This means one order was placed for every 10 clicks on your ad. Your ad campaigns and promotions are aimed at ensuring that they lead to conversions (sales of your product) and help you acquire new customers.

Here are some good practices to increase the chances of your conversions: 

• Ensure that your product detail pages feature high-resolution images and clearly list all major product features. 

• Include video ads containing complete product information, good imagery, the highest-selling and best-reviewed ASINs, discounts, and deals to boost detail page views. 

• Keep competitive prices. They should be similar to your competitors and in the average price range, considering your product quality. Promote your bestsellers and highest-rated products to increase brand sales.

• Track customer lifetime value when evaluating the impact of your ad campaigns, not just immediate conversions. 

• Keep redirecting bids to the keywords and ASINs that fetch high CTR and conversions. You can do so by using granular data from your ad campaign reports. 

Want more actionable insights on improving campaign performance? Here is a good video where we talk about the content that converts.

Conclusion 

Tracking Amazon advertising metrics beyond ACoS can significantly enhance campaign performance and overall profitability. CTR, CPC, and Conversions each play a vital role in optimizing visibility, reducing unnecessary spend, and increasing sales. By refining your ad creatives, targeting strategies, and bidding techniques, you can improve customer engagement and maximize return on investment. Each step contributes to building a strong advertising strategy. Keep refining your approach, track key insights, and ensure every ad dollar is working toward driving the best possible outcomes. 

With atom11, you can handle all these aspects in one place with granular and customized automations. You can get a comprehensive view of the Amazon marketing platform and get visibility into the key performance indicators that help reduce ACoS, improve brand awareness, and increase total ad sales. Learn about how atom11 helped Freudenberg improve ACoS by 40%.

Interested in knowing how we operate? Book a call with atom11 now.

FAQs

What is the CTR formula for Amazon ads?

CTR (Click Through Rate) is calculated by dividing the number of clicks by the number of impressions. This metric helps Amazon sellers determine how much they have paid for the ads based on the number of clicks received on the ad.

CTR = Number of Clicks Number of Impressions.

What is a good ROAS on Amazon advertising?

An ROAS (Return on Advertising Spend) of 3 or above is considered good. It indicates that you’re making $3 in revenue for every dollar spent on advertising. A ROAS below $3 typically means that the ads are not profitable.

What methods of advertising does Amazon use?

Amazon has several types of advertising, such as,

• Sponsored Products: These ads help sellers showcase individual products, resulting in increased product visibility and likelihood of sales.

• Sponsored Brands: These ads help boost brand awareness by displaying your brand ads along with the search results.

• Sponsored Display: These ads use auto-generated display creatives to reach and engage target audiences across their shopping journeys. You can choose to display these ads on both detail pages and other Amazon pages.

  
  

What is CPM in Amazon ads?

CPM (Cost Per Mille) in Amazon Ads is a metric that calculates the total ad spend for every 1,000 impressions received on an ad.

CPM = (Total Cost Number of impressions) 1000