Advertising Archives - Amazing FBA - How to sell on Amazon UK

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Why advertising cost of sales (ACoS) is BS!

When it comes to measuring your Amazon ads’ effectiveness, chances are you’ve been led up the garden path by Amazon. I’m talking about “advertising cost of sales” or ACoS specifically here.

Lies and Damn Lies

Do you know this old saying?

“There are lies, damn lies and statistics!”

Now it’s true that you SHOULD monitor certain KPIs (Key Performance Indicators). Amazon ad optimization is, in fact, CRITICAL to your success or failure – more than ever! 
This is especially true now that Amazon is forcing sellers to use advertising ever more to reach consumers.

But it’s SO important to measure the right thing! I’m not convinced that ACoS (advertising cost of sales) is one of them.

ACos is BS!

In fact, I’d coin a new phrase: “ACoS is BS!”

Listen to this podcast to find out:

  • Why “advertising cost of sales” (ACoS) is a distraction
  • Why Amazon really wants you to focus on ACoS – instead of how much money you’re giving them…
  • What REALLY matters instead (hint: it’s a based on a PRODUCT, not a KEYWORD or campaign)
  • What financial metric about your product you should tie in with your Ad spend metrics

Get this right and you’re already ahead of 90% of sellers I meet – even those who I thought should know better…

Why ACos doesn’t Matter

ACoS =ad spend PER keyword, per ad group or per campaign ÷ sales via advertising. 

But this doesn’t account for this fact:  on the Amazon platform, the main purpose of advertising-driven sales is to get organic ranking for a specific keyword. This, in turn, should lead to sales driven by organic traffic.

This makes ACoS an essentially meaningless metric, in my opinion.

Instead, we should be looking at the overall effectiveness of advertising at the product sales level.

I spend $/£/€X  on advertising, and I get $/£/€Y back in sales.

This gives a different metric which is much more powerful. Turn that into a percentage and you have a very key metric, which helps you assess the effectiveness of your ad spend.

Allied with your gross margin by profit line, you have a couple of essential metrics which basically show you, quickly and simply, whether your product line is making profit, breaking even, or falling into the red by making a loss – a loss often driven by excessive advertising spend.

279 Off Amazon Traffic Optimization with Mike Zagare Part 2 of 2

On the last episode of Amazing FBA, I sat down with Mike Zagare of PPC Entourage to talk about Amazon pay-per-click advertising, but Mike’s expertise isn’t limited to the Amazon sphere. Diversifying distribution and marketing channels is crucial for scaling your brand. Today we’ll be diving into off Amazon traffic and advertising for Amazon sellers.

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276 Digital Products for Amazon Sellers with Jason Miles of Winning On Shopify

Our guest today on Amazing FBA, Jason Miles, is an absolute titan of e-commerce, online marketing, and selling digital products. Jason has been on the show before to talk about his businesses, Winning on Shopify & Pixie Faire. He’s the author of multiple books on e-commerce, a prominent philanthropist, Udemy’s number one e-commerce instructor, and he just so happens to be my business coach.

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238 Merch by Amazon by Chris Green part 3 – How to get free traffic – and how, and when, to defend your designs!

We’re back with Part 3 of my interview with Chris Green from Merch Dojo and today we’re talking traffic and how to drive it to your merch on Amazon.

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229 How to Sell Products on Amazon with Reed Menssa (Listing) Part 3 of 3

This will be the final installment of my interview with Reed Menssa where we tackle how to sell products on Amazon.

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167 Sponsored Products & Amazon PPC Q&A with Brian Johnson

We have, once again, Brian Johnson of PPC Scope and Sponsored Products Academy on the show. After we released the previous episodes I got so many questions that I had to get Brian back on. We’re going to do a Q&A session right now to address questions sent in from the listeners. Continue reading

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