Business owners, investors, and marketing professionals use key performance indicators (KPIs) to assess how well they’re doing in various advertising spaces. Amazon sellers must monitor Amazon advertising KPIs, such as conversion rate and return on ad spend, to understand how the business performs on the platform and how it can improve.
When it comes to ad management for Amazon sellers, performance indicator metrics can be confusing, as many KPIs affect one another. Click Fluency wants to help you understand your business’s KPIs so you can evaluate current marketing strategies and maximize your profitability.
Ten Amazon Advertising KPIs You Should Be Monitoring
Amazon sellers can track various store performance metrics through their Seller Central accounts. Below, we briefly discuss 10 Amazon KPIs you should be monitoring, including what they are, how to calculate them, and what they mean for your performance on Amazon.
1. Generated Sales
The number of sales generated within a specific period represents a simple but effective measure of business success. If sales decline over time, this trend indicates the seller needs to do more in advertising and marketing. The continued growth of generated sales means a stable and healthy business.
2. Click-through Rate
CTR = Clicks / Impressions
The click-through rate (CTR) on Amazon refers to the number of times shoppers click on a product listing divided by the number of shoppers who saw the listing. High CTRs indicate products that successfully pull in search traffic, causing higher conversion rates and more sales. Low CTRs, on the other hand, show a poorly-performing product listing and a lower return on investment (ROI).
3. Conversion Rate
Conversion Rate = Sales / Total Traffic
A product listing’s conversion rate refers to the number of sales divided by the number of page visitors within a given period. High conversion rates mean higher returns, while low conversion rates indicate a need for more optimization. A poorly converting product may be attracting the wrong kind of traffic or not properly leveraging content to encourage sales.
4. Cost per Click
CPC = Ad Spend / Clicks
The cost-per-click (CPC) metric measures the amount of money one spends on a pay-per-click ad divided by the total number of clicks on the ad. Marketers and advertisers use the CPC metric to monitor ad performance and profitability. Higher CPC numbers may indicate a poorly performing ad or an ad with an irrelevant positioned keyword.
5. Return on Ad Spend
ROAS = Ad Campaign Revenue / Ad Campaign Cost
Return on ad spend (ROAS) refers to the total profits from an ad campaign divided by how much the seller spent on advertising. This KPI does not include sales made through organic searches, only sales made via the ad campaign.
Marketers and advertisers use the ROAS metric to measure the success of a specific campaign and compare the performance of two more campaign strategies for more successful ad campaigns in the future.
6. Advertising Cost of Sales
ACoS = Ad Spend / Sales
The Advertising Cost of Sales (ACoS) measures an ad campaign’s total investment divided by the total sales produced by that campaign. It provides an excellent indicator of campaign performance. A low ACoS indicates an effective campaign, while higher percentages suggest the seller needs to change the campaign strategy.
7. Total Advertising Cost of Sales
TACoS = Ad Spend / Total Sales
Among all Amazon advertising KPIs, the Total Advertising Cost of Sales (TACoS) proves essential for evaluating ad campaigns against overall business performance. It refers to the total amount of ad spend for a campaign divided by the total amount of sales within that period. This figure provides insight into organic sales performance by including all sales, not just those related to ad campaigns.
8. Marketing Dependency
Marketing Dependency = Advertising Sales / Total Sales
As the name suggests, Marketing Dependency measures how dependent the business is on media investment to make sales. A high percentage indicates the brand relies on paid advertising for revenue and may need a higher level of organic visibility. A low rate indicates a healthy and visible brand that likely ranks well in organic search results.
9. New to Brand Percentage
Professional sellers registered as Amazon Sponsored Brands can access a metric called New to Brand. This KPI measures how many sales within a given period came from new buyers or buyers who have yet to purchase in the last year. Percentages below 50% indicate a need to improve prospecting strategies to bring in more new customers.
10. Organic Search Rankings
Ranking within the top three organic search results (or at least on page one) is essential for succeeding in Amazon’s competitive marketplace. High rankings drive traffic to your products and improve brand visibility on Amazon. Advertisers and marketers track organic search rankings to evaluate and enhance current SEO strategies.
When running a business, you need a reliable way to monitor campaign outcomes and overall business performance. KPIs help Amazon sellers like you understand how their current strategies are impacting the business and what they can do to increase brand visibility and profitability. Start monitoring your KPIs for some new insight into your Amazon business.
Leave Your Amazon Advertising KPIs to Click Fluency
Monitoring KPIs through data analytics takes time and effort, but our team has a unique advantage in understanding the Amazon advertising flywheel and what it takes to succeed because we ran our own successful Amazon store. You can trust us to serve as your dedicated Amazon department, handling your ad management to convert more buyers and transform your brand presence.
We understand Amazon advertising KPIs and how to use them to drive innovative strategies that result in more sales and profits. Whether you sell products through Amazon, another online platform, or in retail stores, you can grow your business by selling on Amazon with the Click Fluency team at your side. Schedule a call with Click Fluency today to learn how we can help you grow your business through Amazon.