Discover how leveraging Amazon TACOS metrics can amplify the effectiveness of your ppc campaigns. Learn how TACOS provides advertising impact beyond ACOS.
We already wrote a story about the ACOS (Advertising Cost of Sale). This key metric helps monitor your advertising profitability on Amazon. It is computed according to the following formula:
ACOS = Amazon advertising costs / sponsored sales
The ACOS speaks for sponsored sales. Although this is a relevant metric, it doesn't give you any control over your "total sales" or the "volume" of your sponsored sales.
Sponsored Campaigns have a direct impact ( "sponsored sales") and an indirect impact ("organic sales") on your total sales. Keep in mind that Amazon favors the organic visibility of the products which have a high conversion rate. The more sponsored sales you do, the higher your overall conversion rate is, the more organic visibility you get! Sponsored virtuous circle.
The TACOS gives you a very understanding of the impact of your advertising investments on your total sales. But you need to keep in mind that it is not possible to compute this metric at the item level. In this sense, the TACOS is really “holistic/comprehensive”, at least for three reasons:
We recommend to set your TACOS targets based on the maturity of your product or group of products. Then, you will have to translate your TACOS target into an ACOS to monitor your campaigns. The ACOS will act as the middle-man. See the example below:
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