Some Insights about PPC/ACOS Optimization

ACoS (advertising cost of sale) is influenced by

1.) Cost per click

2.) Conversion rate

3.) Average basket.

Conversion rate is generally the most important leverage (both for PPC and for organic sales). If there is anything you can do to improve your listing / increase your conversion rate -> Do it.

Your average basket is primarily impacted by the product price -> Did you test how conversion rates change for different price points?

The average basket is also influenced by the average order quantity –> Would it make sense for your customers to buy multiple products?

You can try to incentivize this with bulk prices (coupon codes) -> Buy quantity X and save Y%.

Last but not least: Average CPC.

Your average CPC is influenced by campaign type (sponsored brands vs. sponsored products), the keyword (fat head vs. long-tail), placement (top of search, product detail page, other) … and more.

The low hanging fruit is to add more relevant (long-tail keywords) –> Ideally, this lowers your average cost per click and thereby lowers your ACoS.