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SITRUNA GUIDES: Paid Advertising (PPC) Glossary

Oct 19, 2022
5
min

Metric Glossary

Campaign Budget

This allows the seller to put a limit on the amount they are willing to spend on Amazon PPC advertising.2 Types of Sponsored Products Budget:

  1. Daily Budget - the amount that you are willing to spend on a campaign per day. You may opt for daily budget if you want to have a balance between your budget and spending.
  2. Fixed Daily Account Budget - it is a fixed amount or value per day for the entire advertising account. If you want to have more control on your expenditure, you may set a fixed daily account budget in your Campaign Manager

Impressions

Number of times your ad is appearing on Amazon or being viewed by a customer. Also called as an ad view. This is an important metric to measure how effective the keywords you used in your campaigns. Bid competitively on keywords to gain higher ad impressions.

Clicks

Number of times shoppers have clicked on an ad.

Click Through Rate (CTR)

The ratio of how often customers click on your ad when it is shown. Amazon provide you the CTR for each campaign and keyword.

If you have a low CTR, check the following to improve it:

Spend

The total amount of your advertising budget you've spent.

CPC (Average Cost per Click)

Average cost per click (CPC) is the average amount that you have spent for a click. CPC is calculated by dividing total spend by the total number of clicks.

This metric gives you an idea on the level of competition. A higher CPC means a lot of sellers are bidding on the keyword since they would also want the best placement for their ad.

Total Orders

Number of the orders placed for your brand's products.

Attributed Sales

The total dollar value of your brand's products sold. It's important to note that sales data can take up to 24 hours to appear in reports.

ACOS (Advertising Cost of Sales)

ACOS is the amount you’ve spent on a campaign divided by total sales. This tells you the percentage of your sales you've spent on advertising. Ideally, you'll want high revenue with low ACOS. Low ACOS means that your campaign is performing efficiently.

TACOS (Total Advertising Cost of Sales)

Total Advertising Cost of Sales or TACOS is a metric use to determine profitability. We refer to this metric to see how much the advertising is driving sales on the whole account.

Formula: TACOS = Total Ad Spend/Total Sales x 100

Steps to Success

Our Approach

The PPC experts in our team have come from an agency background and have worked with large eCommerce clients like Canon, Tesco, Hobbycraft, and Toys R Us to define and build PPC strategies.  We’ve also worked with hundreds of individual Sellers and SMEs across every imaginable category.  Finally (and we think most importantly) we run the PPC activity for our own products, which gives us a testing ground for innovations and new ideas.

Whilst every Seller and every product has unique requirements, there are several fundamental steps across all our clients:

7 Steps to PPC Management

1) Management by Humans:

Your account will be managed by a living, breathing, PPC-loving eCommerce expert.  We use software and tools to help us manage PPC campaigns, but ultimately every decision that is made on the account will be taken by a human being.

2) Intent focused campaigns:

We split our Sponsored Products and Sponsored Brands campaigns based on intent-levels of a customer search terms.  This allows us to identify the right mix of activity to meet your profit goals.  We split out Brand and Generic traffic as these indicate different customer intent (purchase vs research), and split campaigns into Auto, Brand and Exact match types in order to effectively guide a user down the purchase funnel.

3) Product focused ad groups:  

Control over the performance of individual products is vital to efficient sales on Amazon.  We break out each of our campaigns into single product ad groups to give us the required granularity to ensure this is the case.

4) Keyword prospecting and mining:

Regular Search Term report analysis and keyword mining allows us to find both new opportunities and also remove the inefficient and non relevant search terms which drive up ACOS. Removing the inefficiencies means we can focus budget and optimisations towards higher relevancy and purchase intent search terms which drive up sales and lower ACoS.

5) Bid tiering:  

Our funnel based campaign structure allows us to tier our bids effectively – we ensure that bids are higher for high intent / low volume terms at the bottom of the funnel, and lower for volume-driving but lower conversion rate terms at the top of the funnel.

6) Profit-based optimisation:

We optimise towards the metric that actually defines the success of your business: Profit.  Our analytics setup provides us with the insight required to make decisions that are focused on your bottom line.

7) Simple, insight driven reporting:

You will receive a clear, no-fuss report each weeks that tells you how much money you have made, what the key drivers of change have been, and what actions we have taken.  Transparency is key: we’ll tell you exactly how things are really going without the usual self-aggrandising agency-speak.

For more tutorials and how-tos, check out our Sitruna Guides series!