As an eCommerce business owner, you want to make sure your advertising efforts are bringing you the best return on investment (ROI) possible. This is especially true when it comes to Amazon advertising, where the competition is fierce and ad spend can get expensive quickly.
The key to success in Amazon advertising is to continually measure your campaigns and make adjustments as needed to ensure you are getting the results you want. Let’s take a look at the most important metrics for measuring the success of your Amazon advertising campaigns.
Marketing Efficiency Ration (MER) is a way to cross pollinate the data from advertising (cost data is 100% accurate) with revenue data from the shopping cart (close to 100% accurate) to make financial decisions around customer and revenue acquisition. This ratio is the MER and is the one ratio to rule them all for making business decisions (MER = Total Revenues / Total paid media spend).
Using MER mitigates the challenges we face when assessing the impact of paid media:
Every eCommerce brand will have a different tolerance for MER, so you should work with the larger management team to set your target. But, as long as the MER is inside the agreed upon target (and you have products available to sell), the marketing team and/or agency should have open budgets to drive more profitable business through paid media.
Conversion rate is the percentage of people who click on your ad and then make a purchase. To calculate your conversion rate, divide the number of sales by the number of clicks and then multiply by 100. The higher your conversion rate, the better your ROI.
Improving your conversion rate is key to maximizing the success of your Amazon advertising campaigns. There are several strategies you can use to improve your conversion rate, including:
In addition to tracking sales and conversion rate, it's also important to measure customer engagement. Customer engagement metrics, such as click-through rate (CTR), impressions, and time on site, give you insight into how customers are interacting with your ads.
Time on site is measured by tracking the time a user enters and exits a website or a specific page within the site. It is typically calculated by subtracting the time the user entered the site or page from the time they left. This metric can be used to determine how engaging and valuable the content on a site is to its visitors.
CTR is the number of clicks your ad receives divided by the number of impressions it receives. Impressions are the number of times your ad is displayed to customers.
Impressions are simply the number of times your ad creative is served to and seen by someone you are targeting.
By tracking these metrics, you can see how customers are engaging with your ads and make adjustments to improve performance. For example, if you have a low CTR, you may need to adjust your ad copy or targeting to make your ad more compelling.
To maximize the success of your Amazon advertising campaigns, it's important to continuously analyze and optimize your campaigns. This means regularly reviewing your performance metrics and making changes to your campaigns to improve results. Some best practices for continuous optimization include:
Measuring the success of your Amazon advertising campaigns can be a complex process, but it is essential to ensure that you are making the most of your advertising budget. By setting clear goals, tracking relevant metrics, and continuously optimizing your campaigns, you can increase your chances of achieving a positive ROI and growing your sales on the platform. Remember to stay up-to-date with industry trends and best practices, and don't be afraid to experiment with new strategies to see what works best for your business. With the right approach and a commitment to ongoing improvement, you can maximize the effectiveness of your Amazon advertising campaigns and take your eCommerce business to new heights.