In this article, I would like to share with you how we allocate the Amazon advertising cost of sales. First of all, everyone should make it clear that there is no standard for Amazon's advertising budget. On-site advertising is just a channel we use to obtain traffic. In the process of actual operation, we must combine the actual operating requirements of this listing. For example, in the early stage of our products being put on the shelves, it is necessary to pursue the maximum exposure, and clicks are aimed at this, so we should not pay too much attention to the level of ACOS (Advertising Cost of Sale). In the stable operation period of the product, if you want to maintain a certain profit and get stuck in the advertising space under the key keywords and protect your brand, you must pay special attention to the level of ACOS at this time.
In short, in different stages of operation, we have to choose different advertising and optimization strategies. Before we officially start sharing, we need to clarify one more point why Amazon's advertising is so important. Everyone knows that the traffic on Amazon can be divided into free traffic and paid traffic. For example, keyword advertising is a kind of paid traffic. We choose the appropriate keywords for this entry to launch, so that consumers can click on our advertisements by searching for keywords to complete the purchase of products. This series of actions also deepened the weight of our natural search results under this term. So our natural traffic search results under this keyword are also ranked in the top position, so we have a lower customer acquisition cost. In addition, we have also blocked the advertising space for this keyword to a certain extent, preventing other competitors from getting this exposure opportunity. This is why some top sellers in some categories, even if they already have a relatively high position under the natural position, still increase their efforts to put some big words in some categories.
For the budget allocation of advertising expenses, we mainly refer to the following six points.
The first point is the product selection for advertising in the store. I believe everyone has heard the rule of 82. For products in the same store, most of the store profits are generated by 20% of the top listings. This will be more obvious in vertical stores. Of course, we are not here to ask everyone to completely shut down the rest of the 80% of the products in the store, but to properly tilt the budget and give the listings at the top of the store that can bring you the most profit.
The second key point is that we need to confirm the break-even line of advertising for the product. Then this balance line is actually what we often call the breakeven ACOS of an advertisement. The break even ACOS is equal to the net profit of the product, compared to the unit price of the product. We can calculate the maximum budget amount of a single ACOS for advertising through the break-even ACOS, so as to reasonably allocate the maximum advertising budget for each product.
The third point is to flow out the budget for experimenting with new advertising formats. In this spending setting of the advertising budget, we must set aside at least about 10% of the budget for trying new advertising formats. Whenever Amazon Advertising launches this new form of advertising, don't be too late. You must participate in the launch of this newly tested form of advertising in a timely manner. Generally, there will be corresponding traffic support. At the same time, if you participate in the new advertising form, you will have a faster traffic advantage than competing products.
The fourth point is that you must reserve 2-5% of the budget for your own buyer account to buy your own products
, so as to generate more positive comments. This part of the budget is actually wasted, and the cost of the buyer accounts using YiLu Proxy
is actually for all your products, not for a single product, so the usage fee of YiLuProxy is actually very cheap, and even some traffic can be used for free on YiLu Proxy, so this part of the budget is loss on tax and shipping charges.
The fifth point is a standard for an ideal advertisement ACOS under the general category. For most categories of products, if the ACOS of advertising can be maintained at about 25%, it is an optimization goal we are pursuing. Of course, the lower the better. Then we can allocate one of our budget expenses through this standard. The fifth point is the budget allocation ratio of the three different advertising forms of SP, SB, and SD. Then we can allocate according to the following ratio, SP accounts for 75%, SB 20%, SD accounts for 5%. Among them, the product-level advertisement of SB advertisement and video advertisement, the actual performance of this advertisement has been very good since this year.
The last point is for the peak sales season, that is to say, the Q4 we often say is an advertising expense. Then Q4 spending will generally account for 40% or even 50% of the store's annual advertising spending. If you have some such seasonal products in your store, you must increase them during the peak sales season and increase your budget appropriately.
At present, the Amazon advertising background has also newly added this advertising budget control function. After setting, the system will help you increase the budget by 25% on the day when the traffic peaks, so that everyone will not miss the corresponding display. If there are still friends who don't know this function well, I will also send you screenshots of the background. Finally, on the topic of advertising optimization, it has never been an isolated individual. We have always emphasized that any advertising optimization that is divorced from product selection, product quality, and listing copywriting is useless. Before we advertise, we must optimize these three parts in advance.