The ultimate goal of any business, online or offline is to grow your brand. For Amazon sellers this is a long-term, continuous goal that includes achieving a range of short-term goals.
Most sellers track Sales, Profit, and Inventory within Seller Central and in their ad account when it comes to measuring KPIs; they only assess ad efficiency by ACoS.
However, there are a few KPIs that they are missing and could potentially be losing out on.
In this article we have identified the most essential and helpful KPIs that you should be tracking in order to build your brand strategically. We will cover important PPC metrics that you should include in your KPIs to track their success.
What Are KPIs?
By definition, KPI’s are Key Performance Indicators. They enable the business to make clear, educated decisions about the current projects.
Kpis are measured over a certain period of time and give indication on whether a particular strategy is performing well or if adjustments need to be made. They help gauge the companies long-term performance.
This is crucial to ensure business continues improving and growing.
Growth And Brand Awareness
This collection of advertisements aims to make you more visible to new potential clients. It’s acceptable to see your ACoS even double when concentrating on improved brand recognition compared to your typical efforts.
In the long run, expanding your brand’s recognition and attracting new consumers will have long-term rewards.
Impressions is how many times your advertisement was seen by potential clients. You won’t be charged for the impressions, though. It still allows you to gauge the success of your proposal.
The higher the number of impressions, the better you can expect your strategy to perform. You cannot, however, draw any conclusions just from the amount of Impressions.
In order to utilize the data from impressions, you require the data of your click-through-rate (CTR) and the number of clicks your link has received so far. We discuss these KPI metrics in more detail below.
Clicks are exactly what you think they are. The amount of clicks your ad or link receives. Each click requires a small payment (CPC) and provides you with a rough estimate on the volume of paid traffic visiting your website.
As you collect the data on your impressions and clicks, you will be able to determine your click-through-rate (CTR). You can access this information on your ad account dashboard.
Your CTR is calculated by Clicks/Impressions.
Your CTR will inform you of your ads performance within a specific target audience. If your ad is performing well then you may not find it necessary to make any changes.
However, if the result is lower than required, you may have to alter your ad. We suggest altering your choice of keywords in order to reach a broader audience.
As a seller on Amazon it is important to ensure that your title corresponds with your ad and keywords. A 0.2% CTR is a healthy rate on Amazon, however, a higher rate can be achieved.
Cost Per Click (CPC)
Keep in mind that second price auctions are used by Amazon. The highest-bidding vendor thereby wins the auction and has their ad appear at the top of the search results. However, you simply have to pay the second-place seller’s bid.
Knowing and understanding the benefits of your CPC is important and allows you to navigate the rather hostile competition environment. The higher the CPC, the better the keyword, and the more combative the competition.
It is important you don’t become trapped in bidding for a CPC that is too expensive and will not perform well for your business.
You may find it more beneficial to perform a keyword analysis to find keywords that are within your budget and will provide better results.
This tactic could have you paying less while gaining a lot more traffic.
Sales And Profits
With this approach, you work with the most pertinent audience and should put the greatest emphasis on budget effectiveness. This collection of campaigns ought to be developed around validated targets.
Conversion Rates (CVR)
Your conversion rate is calculated by Number of Ad Orders/Clicks. This means that your conversion rate is how many clicks on average are needed in order to gain one sale or order.
On Amazon, the conversion rate is typically 9.55%. These averages vary greatly depending on the niche, as is the case with all measurements, of course.
For instance, more expensive items ($100+) often have lower conversion rates since consumers like to compare options before making a final purchase.
Advertising Cost Of Sale (ACoS)
Advertising cost of sale (ACoS) pertains to the amount of funds you have to invest into the advertising of a product compared to the amount of sales you gain on the particular product.
This allows you to determine if you are investing the right amount of funds and if any changes need to be made to the ad itself.
When analyzing your ACoS, you want a rate of around 25-40%. However, you want to break-even on your ACoS and use it as a starting point to make improvements.
Break Even ACoS (BE ACoS)
The moment at which your advertising expenses are equal to your profit margin is known as break-even ACoS.
Knowing your break-even ACoS allows you to ensure that you are investing the correct funds into the product and its advertising.
If you are investing over your BE ACoS for the advertising of a product then you are most likely going to experience a loss rather than a profit.
You can use this number to help guide you in your bid optimization process and ensure you are setting your products up for success.
Whether you are a new Amazon seller or have been in the game for awhile, brand growth is worth every cent. Implementing the combination of PPC and SEO strategies can help increase your short term results.
This means it is critical to measure how your ads are impacting your brand growth as a whole.
TACoS provides advertisers with a far more accurate picture of how their ad spend performed by comparing advertising expenditure to the overall revenue generated.
When monitoring your TACoS it is important that they are stationary or decreasing over time. This implies that you are gaining sales from organic traffic over paid traffic and that your advertising is performing well in promoting your brand.
It is important that you analyze ACoS vs TACoS regularly to ensure your ACoS is not decreasing while your TACoS increases.
AD Sales/ Total Sales
While you are using ads in order to boost your overall sales and to improve your brand growth, you want to work towards the majority of your total sales coming from organic pathways.
You should pay attention to the quality of your listings and their organic success if your ad sales account for more than 30% of all sales and if this percentage doesn’t change month over month.
When looking to boost your Amazon business whether in sales or brand awareness, there are numerous KPIs to monitor and analyze. It can quickly become overwhelming.
We have created this guide to make it simple. Ensuring that you get the data you need to make the improvements you need to boost your business.