In Amazon advertising, 'non conversion costs' refer to the portion of advertising costs that do not generate conversions and fail to generate orders. However, these expenses cannot simply be defined as' waste ', as a single click that does not immediately generate conversion does not mean it is worthless. The shopping process for buyers is complex, and some clicks may be an important part of their decision to purchase.
Today, Xiaojiang will share with you how to identify and reduce truly wasteful advertising expenses by analyzing advertising reports, and maximize advertising ROI.
1、 Common situations of ad spending that does not generate conversion
Advertising costs that do not generate conversions refer to advertising costs that do not generate orders. Although these clicks did not generate conversions, it does not mean they are completely useless, as some clicks may be a necessary step for buyers before deciding to make a purchase. However, if the advertisement does not reach the target audience, or if the listing details page fails to arouse buyers' interest, these clicks become real waste.
Sellers can organize the advertising report for 2024 and analyze it from three dimensions:
1. Order dimension, calculate the proportion of click through costs of all ads that have not generated orders to the total link advertising cost. If this proportion exceeds 50%, it indicates that the ineffective cost of advertising waste is too high.
2. In terms of conversion rate dimension, based on the average conversion rate of advertisements, such as an average conversion rate of 10%, what is the proportion of ads that have been clicked more than 10 times and have not generated orders to the total advertising cost? Exceeding 30% indicates unhealthy advertising metrics.
3. Keywords and ASIN dimensions, which irrelevant words and ASINs are filtered out from the advertising report, and how much of the ineffective advertising cost generated by clicks from these words and ASINs accounts for the advertising cost? More than 10%, ineffective waste is quite serious.
What are the reasons for excessive non conversion expenses by sellers? Common reasons include the following:
1. Inaccurate advertising keywords and audience targeting: Inaccurate advertising keywords fail to reach precise users and buyers interested in the product, resulting in clicks but no conversions.
2. Not denying: Advertisements often run out with many unrelated words to the product. Without denying, the advertising budget will be consumed by a large amount of junk traffic, resulting in lower click through rates and conversion rates for links. When you compete with your competitors for the same slot, Amazon will determine the slot ownership based on link weight. When there are many irrelevant searches on the link, clicks will significantly decrease and the link will be negatively marked by the system.
3. The disconnect between advertising and listing detail pages, and advertising without proper listing copy: Amazon's advertising performance is closely related to the listing copy itself. The foundation of copywriting is the key to gaining traffic. The listing copy will have a static inclusion 15 minutes after publication, which is the basis for allocating product traffic for the first time. The better the static indexing (the more words included), the more accurate the keyword information captured by Amazon. Many sellers may think that Amazon will only start indexing after they start advertising, but this is not the case. After the link is listed, the indexing (static) begins. The function of advertising is to accelerate the inclusion of accurate keywords, but natural traffic may not necessarily give you precise results, so advertising correction is needed.
2、 How to identify advertising expenses that do not generate conversion?
To effectively identify advertisements and reduce non conversion costs, the first step is to clarify which advertising expenses have not brought results:
1. Analyze advertising reports: Filter out keywords with no conversions from the advertising report. First, filter search terms based on sales revenue. If a keyword is clicked 6-10 times without conversion, consider pausing it; Merge the expenses of repeated keywords (root words appearing multiple times), check the invalid expenses of these repeated keywords, and see if they are negated; Sellers can create a separate tracking table for non conversion expenses, ensuring that the analysis dates and weeks are recorded, so that trends can be tracked over a period of time. The expenditure on 'non conversion expenses' will also be more sensitive.
2. Share keyword performance: judged based on the ACoS and conversion rate of the keyword. For keywords with high ACoS and low conversion rates, lower the bid or budget appropriately.
3. Analyze the placement of advertisements: If the placement of advertisements is determined, and there are a large number of clicks on the product page (PP page) without conversion, the proportion of product pages should be minimized as much as possible; If the advertisement is placed under the search position (TOS/ROS), it indicates that the relevance of the keyword is high. Increasing the TOS/ROS percentage will strengthen the advertising system's traffic tilt towards the search page, which can quickly improve the keyword ranking.
4. Flexible allocation of advertising budget: Allocate more budget to well performing ads and reduce or suspend budget for inefficient ads.
5. Timely monitoring of advertising positions and timely rejection: Regularly use tools to monitor the performance of advertisements and check for irrelevant traffic, promptly reject some irrelevant words that come out of advertisements, and avoid wasting advertising budgets.
There is also a situation where if the product is a new product, some related keywords may not be converted due to a small number of reviews. In this case, the product can be accumulated to a certain number of reviews before being launched. Suggest reassessing and testing after 3 months.
Through detailed analysis of advertising reports, sellers can promptly identify unconverted advertising expenses. Although not all unconverted clicks are "waste", it is crucial for sellers to focus on those advertising campaigns that have not produced results and make necessary adjustments, which can save them a lot of advertising costs.