Important Metrics to Remember in Amazon PPC

Your job of crafting the budget for Sponsored Products Campaign becomes a lot easier, if you are familiar with Amazon’s key metrics. Lets take a look at how Amazon defines them:

• Impressions: Impressions can be defined as the number of times your advertisements were displayed within the search results. In other words, it gives you an idea of the number of people your ad is reaching to.
• Clicks: Clicks are essentially the number of times your ads were clicked on.
• Cost-per-Click: Cost-per-Click, in the context of Amazon PPC, is the amount you are paying for every click that your advertisements get. For example, if you are spending $30 on an advertisement for your product that gets 60 clicks, then your CPC, in this case, would be:

CPC = 30/60 = $0.5

This means that you are paying Amazon $0.5 every time your ad is clicked.

• Click-Through Rate: Click-Through Rate is defined as the rate at which your advertisements are clicked. It is the percentage of people who see your ad impressions and then move on to click on the ads.

It is calculated as:

Click-Through Rate= Total Clicks / Total Impressions

• Advertising Cost of Sales (ACoS): Advertising Cost of Sales can be understood as the percentage of sales you spend on advertising. It is calculated by the following formula:

ACoS= Amount Spent on Product / AdTotal Sales Generated

For example, if you spend $2,000 on advertisements for a product that, in turn, generates $8,000 in revenues, then your ACoS, in this case, would be 25%.

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