Amazon is the world’s biggest online marketplace. It provides businesses an unparalleled opportunity to reach a huge number of potential customers with 310 million active users. However, with over 2.5 million third-party sellers, the competition is fierce. One key factor to make it on Amazon is by having a comprehensive advertising strategy in place. It’s essential to understand how to do PPC on Amazon and know how to measure its performance by using key metrics.
We, at Lezzat, understand the importance of Amazon PPC in driving sales and increasing the return on investment (ROI) for sellers. In this article, we will discuss the key metrics that are important in measuring the performance of your Amazon PPC campaigns to make informed decisions for a successful Amazon PPC campaign.
Impressions pertain to the number of times your ad is shown to customers on Amazon. This metric is important as it helps you know the reach and visibility of your ad. A high number of impressions can mean that your ad is seen by a large number of shoppers, but these impressions do not guarantee clicks or sales.
To utilize this metric, you need to use it in conjunction with other metrics, such as the click-through rate (CTR). A high number of impressions with a low CTR can mean that your ad is not effectively catching the interest of the customers.
Click-Through Rate (CTR)
Click-through rate (CTR) is the percentage of clicks that your ad received divided by the number of impressions. CTR is an important metric in measuring the effectiveness of your ad in attracting customers. A high CTR means that your ad is relevant and compelling to the audience, while a low CTR can mean that your ad needs improvement.
You may need to work on the ad copy, targeting, or budget needs. Make sure that your ad copy and creatives (such as a video, images, etc. if any) are high-quality and resonating well with your audience. Try to review your targeting to see if the ads are showing up in the right places. Lastly, consider adjusting the budget of your ad for visibility.
Conversion rate is the number of clicks that result in a purchase or another desired action like adding a product to a shopping cart. This metric shows the success of an ad, reflected in clicks converting into sales. This event proves how an ad is well-targeted and relevant that it effectively converts into a sale.
Improve your conversion rate by making sure that your ad represents your product well and accurately. It needs to provide necessary information that customers need to make a purchase. Next, check your targeting. Make sure that your ad is being shown to customers who are likely to convert. Finally, try to test different ad copy and images to find the combination that will drive the highest conversion rate.
Average Cost-Per-Click (CPC)
Average cost-per-click pertains to the average amount you pay for every click on your ad. The CPC varies since it depends on a number of factors, such as your target audience, competition, and the keywords you are using in your campaign. Understanding your average CPC helps you determine your return on investment (ROI) and optimize your campaign budget.
To improve your CPC, use keywords that are relevant to your product, but have low competition. This usually means a low CPC. You also need to adjust your bid for the keywords to find the optimal balance between cost and visibility. Lastly, check your targeting making sure that your ads are shown to relevant customers. Targeting customers who are less likely to convert can increase your CPC.
Return on Ad Spend (ROAS)
Return on ad spend (RoAS) is the return you get for every dollar spent on your Amazon PPC advertising. It is calculated by the revenue divided by the cost of your ad. This metric helps you measure the success of your ads and determine your campaign budget.
A high ROAS can mean that your ads are making profits with a strong return on investment. On the other hand, a low ROAS can indicate that your campaigns are performing poorly in driving sales and need improvement.
Improve your ROAS by optimizing your ad copy, targeting, and budget making sure that your ads are visible, compelling, relevant, and relevant to the right customers. Monitor your ROAS on a regular basis and make the necessary adjustments every time.
Amazon PPC is a powerful tool that you can use to increase your ROI on Amazon. By understanding the metrics discussed above and using them strategically, you can achieve your goal of generating a high ROAS and increasing your profit on Amazon.
At Lezzat, we understand the importance of Amazon PPC advertising and are dedicated to helping our clients succeed. Whether you’re looking to launch a new Amazon PPC campaign or optimize an existing one, our team of experts can help. Contact us today to learn more about our Amazon PPC services and how we can help you achieve success on Amazon.
Amazon has three campaign types, such as Sponsored Products, Sponsored Brands, and Sponsored Display, that you can utilize to maximize the Amazon PPC platform. However, you can only access Sponsored Brands and Sponsored Display if you have a brand registry. Learn how to register your brand here to make the most out of Amazon PPC and generate a high return on investment (ROI).