In the screenshot below ACoS was increased for one of the products. While debugging, we identified a trend that is consistent with the Amazon PPC industry.
We looked at top keyword targets to bring in traffic to the listings and the performance of each target. The trend in the plot shows CPC has gone up and therefore ACoS has gone up. This is pretty consistent with other data. There may be more variables such as Amazon’s algorithm or our methods.
Were there any changes that caused an increase in CPC?
We follow best practices to set our bids. Our methods are consistent and proven over the years. We were not aggressive in setting up bids for these targets.
The reason is competition on Amazon. Competition on Amazon can certainly increase CPC. That can certainly increase ACoS. It has been proven across different ad accounts over the last 6 months.
So can we reduce ACoS?
We can by being passive in our bid setting, but it can impact organic ranking and total business profitability. In the end, it will depend on the goals for each account when it comes to deciding what action to take. Among other variables, competition on Amazon dictates terms for PPC.