Setting Your Target ACOS

Welcome to this brief video about setting your target ACOS

Your Target ACOS represents your advertising strategy

All system recommendations are based on your Target ACOS therefore it is crucial setting it to reflect your strategy correctly

There are different challenges setting up your target ACOS

Setting it too high can result in high spend and extensive losses

Setting it too low can result in no impressions this no sales

Sellers also tend to set it as the break even ACOS but that too can result in no impressions or sales depending on how competitive the item category is.

Keep in mind that your advertising campaigns are not meant to generate profit but rather help improve your organic sales

This is why you Target ACOS should be related to your product lifecycle stage

During the launch stage your goal is for your product to gain credibility.

Credibility is achieved through sales and reviews so you should attempt to get as many impressions as possible by setting a high target ACOS. Typically the Target ACOS range during this stage is 2 to 5 times your break even ACOS.

Once you feel your product has received a sufficient level of rating and reviews to be considered competitive your goal should be to figure out which keywords are most relevant for your product, based on what people search for when they are looking for such a product.

This is the discovery stage and the Target ACOS range during this stage is typically 1 to 1.5 times your break even ACOS.

Once your product is mature and highly competitive you can consider optimizing your advertising for profit.

The faster your item gains credibility the quicker you will be able to achieve profitability.

You will also need to consider your current ACOS and break even ACOS

If you just started using our solution and your current estimated ACOS is for example 50% reducing it dramatically is most likely to result in a massive drop in impressions. Reductions should be done gradually so set reasonable targets and not wishful ones.