Whether you are a seller or vendor that is advertising on Amazon, or you are an agency that is taking care of someones’ business, you should be introduced with the main PPC terms when it comes to advertising on Amazon. No matter if you are a beginner or an ‘old school’ Amazon advertiser these key terms are never out of fashion and you should know the right way of interpreting them.
The king of all PPC terms - ASIN
This term is the first thing that you would hear in every agency or with every seller or vendor that is advertising on Amazon. ASIN is a unique identifier that represents your advertised product on Amazon. ASIN is very useful when with only one code of numbers and letters you want to find specific product on Amazon, also you can use ASIN in different ways of Manual Targeting such as: Defense Targeting, Offense Targeting, Product Targeting, Category Targeting etc.
The really important ones - Account Performance Terms
The first and the one that everybody who has been using Amazon for a short period of time knows is ACoS - advertising costs of sales. This is for sure, one metric that is the most popular for those who are selling products on Amazon. You just need to take one look at the ACoS and you will know if your account is profitable, or you need to take some more effort to make ACoS lower.
What is ACoS actually? It is defined as contribution of the amount spent on a campaign in total sales during the campaign run dates. So, obviously, if your ACoS is lower you will be content with your overall account performance, and if your ACoS is high you should consider taking some measurements in order to lower the ACoS.
Example of good and bad ACoS
Real, Blended, Total ACoS, call it as you want it but everybody agrees that spend as a percentage of total revenue is one term that you should take in consideration when you are checking your performance on Amazon. As well as ACoS, spend as a percentage of total revenue should be as low as possible, but you should know that the level of TACoS also depends on the period of advertising on Amazon and size of your account. So, if you are new to Amazon platform and you just started with your advertising journey it is normal that your TACoS would be 14% - 15%, on the other hand experienced advertisers should expect TACoS to be 5% - 6% if they are a good seller.
Cost - per - Click is a metric that you would find very useful when it comes to determining bids that you want to set for a specific keyword, or you want to get to know how much did you pay for one click on your ad. By definition it is the average amount that you have spent for a click and it is calculated by dividing total spend by total number of clicks. CPC is also very important metric when it comes to choosing the bids for your keywords. When setting your bid, you will always pay the second highest CPC bid if Ad is clicked on.
Relation between Clicks, Spend and CPC
The most interesting ones - Sales Terms
This metric is also one of the key metrics when it comes to getting to know your profitability on Amazon. It shows the number of units ordered in a specific period of time. Using Campaign manager you can easily see how many orders had specific campaigns brought, and also you can see how many orders your account is having in total.
With just one look at the Sales metric advertiser can see if an account is having a profitable or not so profitable period. This metric also helps in revealing ASINs that are best-selling products, and that you can use in improving your accounts’ overall performance. Sales also have tremendous impact on ACoS and TACoS, so in order to keep your key metric lower you should make sure that sales are always growing and in that way making a profitable environment for the brand.
Besides above mentioned metrics, the percentage of customers that have clicked on your ad and made a purchase defined as Conversion rate (%) is important for your Sales and overall profitability of the account. This metric, along with ACoS can be defined also as E-commerce marketing metrics, and it is helping advertisers, sellers or vendors to realise what changes are a must, so that brand could get more Sales using advertising.
If you want to get to know more key metrics and the best ways of taking advantage of them, you should definitely hear our podcast episode 3: Most Important PPC Metrics and incorporate learned lessons to your advertising strategy.
The ones you can’t miss - Keywords
When creating a campaign using Amazon, next to the Auto campaign you would always want to create a Manual campaign too. In the creation process it is important that you find correct keywords that will “attract” the customer and lead them to your product. In this you should always lean on Customer Search terms - keywords which customers were looking for and which lead them to your product, and in best case scenario they made a conversion. These keywords can be generated from created Auto campaigns or using different tools for keywords research.
There are also:
Brand Keywords - which are keywords that customers are looking for when they want to find someones brand on Amazon
Category Keywords - keywords that are using customers who want to look for general products in a specific category
Keyword Targeting is a commonly used way of targeting and it is available for Sponsored Products as well as for Sponsored Brands Targeting.
Wrapping it up
In an advertiser life there are a lot of terms that one should get to know and learn how to deal with, in order to make better targeting and provide better results for themselves or their clients.
When it comes to Amazon PPC there is a variety of terms which should be considered if one wants to be an advertising expert. But there are also some key terms that should be incorporated in the very beginning of the learning process and someone's beginner's experience with Amazon. All above mentioned terms should be well understood and well known in order to start your experience with Amazon PPC Advertising.
If you want experts who will work on your Amazon account, and you don’t want to deal with new terms in your business then you should consider contacting us and letting us make your account a FREE AUDIT with all explanations provided and with detailed strategy for improving your Amazon business.