It’s impossible to improve anything if you don’t know how to quantify it. One unique Amazon measure is called Total ACoS (Total advertising cost of sale).
This is a fascinating question and is linked to a unique feature of Amazon in that Amazon PPC has the potential to influence your search engine ranking.
Discovering new ways to improve your PPC is essential to keep up with the times as Amazon grows more competitive, and Total ACoS is an integral component of this.
In this thorough guide, we’ll educate you on the intricacies aspects of Amazon Total ACoS.
Let’s get started.
What precisely is TACOS?
Advertising’s goal isn’t just to sell an item. It’s about expanding your company’s totality and increasing the visibility of your brand. Paying attention to Total ACoS trends will help you understand what actions you’re taking affect the goals of your business overall.
The opposite of RoAS which Amazon has been using recently as a significant stat, ACoS delivers the same information but from a slightly different angle.
Although it’s an important indicator, ACoS does not reflect the true value of advertising spending. It does not consider the impact of your advertisements on brand awareness or organic sales.
TACoS offers a greater view of advertising spending by providing information on sales totals. However, no one measure can cover all aspects of your business. Monitoring TACoS over time in contrast can show how your advertising expenditures appear to be helping in the expansion of organic sales.
How to do TACoS Calculation?
The most basic formula to determine the TACoS value is as follows:
(Advertising Spend/Total Revenue) x 100 = TACoS
Simply stated, TACoS asks you to increase the amount you spend on advertising by your sales total of 100.
What makes a good TACoS?
The right TACoS percentage is a personal decision that is dependent on your needs. In general, however, more tame your TACoS as with ACoS too more favorable.
A low TACOS rate is a sign of a positive ratio of organic to paid sales that indicates strong brand recognition and perhaps a significant number of repeat purchases.
A lower TACoS is, the better, but a lower TACoS could be a good way to raise awareness about your products.
Be sure to have a sufficient advertising budget and that you’re targeting specific keywords relevant to your product, and that your bids are aligned with the average CPC.
If a particular product regularly has an extremely high TACOS the marketing campaign must be analyzed and tested with new keywords, bids, products, or a combination of all three.
It is acceptable to do this for brand new products, however. When a new item is launched and the main purpose is to boost sales, a substantial TACOS is to be expected.
Your TACoS is likely to decline over time. This is the reason why trends are so significant.
Trends in TACoS
It’s essential to keep an eye on all aspects of your TACoS. Examining the way TACoS changes in the opposite direction will provide more information on the effect of the PPC strategies on sales as well as the condition that your portfolio has.
TACOS decreasing or even flat: This means that the product being advertised has been generating consistent and solid sales. It also means that organic sales are growing this means that your brand’s reputation is growing.
A lower TACoS may indicate an increase in repeat purchases, while an increase in TACoS could signal an increase in repeat purchases. This is what you’d like to observe for all TACoS products over the long term.
The increase in TACoS means the fact that your company is spending more on advertising, however, your organic sales aren’t growing at the same pace. Your earnings are heavily dependent on advertising spending, not organic growth.
If you’re consciously pushing products that have aggressive bids, a rise in TACoS is a normal and expected outcome. But it’s not something you’d like to observe in the long term.
If you notice an abrupt increase in TACoS, review your product pages to ensure they’re current and optimized to the max. It is also recommended to conduct an Amazon PPC audit to assess the state of your campaigns.
How can you manage Your TACoS in check?
There are two primary methods to reduce your TACoS. One is to lower it, while the reverse of both can raise it.
In the long run, spending less on advertising can reduce the cost of ACoS.
Make sure you increase the proportion of organic sales.
Pro tip Focusing on conversion rates (CVR) You can simultaneously boost both results. Bidding on the most popular phrases will help reduce your ACoS as well as increase your CVR, which can increase your organic search results for the keyword.
An important aspect of any PPC optimization plan is reducing the amount of PPC spending to reduce your ACoS.
If you are thinking about TACoS But you should be focusing on the other aspect which is increasing organic sales is your primary goal because this is the way you will reduce TACoS while increasing sales overall.