Amazon KPI examples

Amazon KPI Metrics For Advertising + Marketing

Understanding which KPI for Amazon will help provide insights into Seller Performance

Amazon KPI metrics are an essential part of any marketing plan. Without them, there would be no way to determine if your efforts were successful and your media investments paid off.

In addition, Amazon KPIs for retail fused with marketing metrics help you see what works and what doesn’t for driving business growth. They also give insight into how your customers perceive your brand and product. You can adjust your marketing strategy accordingly to avoid wasting your media dollars.

From sales growth, operating income, net income, and cash flow to operations, we will discuss how investors, brand owners, and sellers could use each of these indicators to frame strategies while setting goals for future success.

Here are examples of various KPIs that Sellers or Vendors use in their insight efforts;

1. Sales: Sales are a vital metric to track on Amazon, as they can help you understand your business's overall performance on the platform. Sales data can be broken down by product, category, or other dimensions, allowing you to identify trends and opportunities for improvement.
2. Revenue: Revenue is another important metric to track on Amazon, as it can help you understand your business's profitability on the platform. You can identify opportunities to increase your margins and optimize your pricing strategy by tracking your revenue.
3. Customer Reviews and Ratings: Customer reviews and ratings are essential indicators of the quality and satisfaction of your products and can significantly impact sales. By tracking your reviews and ratings, you can identify trends and areas for improvement and take steps to increase customer satisfaction.
4. Conversion Rate: The conversion rate is the percentage of visitors to your product listing who make a purchase. By tracking your conversion rate, you can identify opportunities to improve the effectiveness of your product listings and increase sales.
5. Order Defect Rate: The order defect rate is the percentage of returned or canceled orders. By tracking your order defect rate, you can identify opportunities to improve the quality and satisfaction of your products and reduce the risk of returns and cancellations.
6. Return on Ad Spend: The return on ad spend (ROAS) is a metric that measures the profitability of your advertising campaigns on Amazon. By tracking your ROAS, you can identify which campaigns are most effective and optimize your ad spend accordingly.
7. Customer Acquisition Cost: The customer acquisition cost is the cost of acquiring a new customer on Amazon. By tracking your customer acquisition cost, you can identify opportunities to reduce your costs and increase the efficiency of your marketing and advertising efforts.
8. Average Order Value: The average order value is the average amount that customers spend per order on Amazon. By tracking your average order value, you can identify opportunities to increase the value of your orders and drive more revenue.

In this article, we will cover KPIs for Amazon that are baseline critical metrics for a Seller business. We will detail various industry-standard KPIs for Amazon's performance, which is vital to understanding the success of your e-commerce strategies.

What are Amazon's KPI metrics for marketing?

Amazon marketing KPIs are a quantifiable way of measuring the success of an Amazon Advertising campaign. They are also referred to as Marketing or Advertising KPIs. These measurements are usually used to gauge the effectiveness of campaigns and associated creative assets (ads).

The most appropriate marketing KPIs vary greatly depending on what you’re trying to achieve. Some examples include:

• Sales Generated — How many leads/customers did we get?

• Reach — How far did our message travel? Did our product ads reach the target audience?

• Awareness — How are our organic rankings? Where do we sit in our product category concerning competitors?

• Engagement — How engaged were our users?

• Conversion Rate — What percentage of sales was due to converting visitors into customers? Are we converting a visit to a product listing into a sale?

• Retention — How long did our customers stay with us? Did they leave a positive or negative review?

• Cost per Acquisition — How much did each customer cost us? What is the impact on profit margins? We would consider a profitable campaign a success when factoring in total costs.

Ultimately, what you measure will be linked to your overall campaign goal.

What Are Examples Of Amazon KPI Metrics For Marketing?

There are many ways to measure the effectiveness of marketing and advertising efforts. Each metric gives you a unique insight into what you have done well or poorly. Some metrics allow us to see the impact of our efforts, others tell us about our audience, and others let us know whether we’re spending money wisely.

Here are some examples of metrics for various types of campaigns.

• Email Marketing: As emails open, forward, and unsubscribe. Also, link clicks to a product listing and any orders.
• Digital Marketing: Click-Through Rate, Cost Per Action, Impressions, and Subscriptions.
• Social Media: Followers, Impressions, Engagement Rate, Tweets, Retweets, Likes, Comments, Shares, and Views. If you have a call-to-action, like ordering a product, you would also use CTR and CPA.
• Website: Total Traffic, Bounce Rate, New Customers, Returning Customers, Time Spent on Site, and Traffic Sources.
• Content Marketing: Blogs, Amount of Content Shared, Content Downloads, and Qualified Leads Through Lead Generation Fills.
• Video and Streaming TV Ads: Impressions and Viewing Time.
• SEO: Keyword rankings, search volume, and organic visits.
• Brand: Customer satisfaction, customer retention, and customer lifetime value.

A lot of different factors affect the success of an ad campaign. Some include the ads’ quality, the targeting options available, and the user experience when interacting with the ads. Tracking conversions is essential because it helps you measure the effectiveness of your marketing efforts.

You can track those conversions using Amazon Attribution (beta) or Google Analytics. These tools will show you how many users interact with your ads and their next actions.

Closing The Loop, End-To-End Attribution For The Marketing Funnel

For most advertisers and marketers, their current campaign performance does not directly attribute an action to the outcome of a sale. For example, the email you sent promoting a product on Amazon. You know the sends, the opens, and the CTR to the product, but not how many people order. It is more of a guess or assumption. However, with Amazon Attribution, you can connect the dots to know how many sales that email drove! Closing the loop from marketing to sale is critical for campaign optimization efforts.

These tools let them test different ad formats, target audiences, and landing pages while measuring the effect on sales and conversions. Amazon Attribution tracks how other channels (SEO and social media) affect your business. Using this information, you can tell whether a campaign is working and get detailed reports on how each channel contributes to your overall success.

As a result, campaign strategies can be refined by knowing how a specific channel or creative asset is performing. For example, a display campaign may be great for awareness, but you observe it is not driving sales. With attribution, you now realize that the display ad is driving clicks without conversions. As a result, you decide to adjust your daily ad budget for the display campaign to focus on brand awareness.

Using attribution increases the chances of success, reducing the guesswork of your campaign strategies. You can start to target high-intent audiences with specific channels and creative, allowing you to optimize costs and focus on a narrow audience that is in-market for your product. You can readily optimize for a real-world target profit margin, assigning larger budgets to strategies that are sales drivers vs brand builders.

Attribution lets marketers see what works best, which is the key to success in shaping KPIs that impact the bottom line. The key difference between those using Attribution vs those that do not is they have the critical visibility needed to close the e-commerce loop.

Which KPI for Amazon will be most important to your brand?

Marketing analytics are critical to any brand. They help you understand what your campaigns are doing to reach your business goals. They give you insight into how your campaigns are impacting your business. And they allow you to make adjustments to improve results. Marketing analytics help you measure success. They also help you understand if your campaigns are working and, if not, why not. You can then adjust them to get the best results possible. Finally, marketing analytics help you justify your budget and staff.

• Advertising Cost of Sales ACoS: Ad spends per conversion (CPA) is calculated similarly, except you need to add the cost of each impression to the sales column. If you have a CPA goal, you should divide your average cost per click (CPC) by the number of conversions to get your expected CPA. For example, if you had a CPC of $0.20 and 100 conversions, you could earn $2.00 in CPA. See What is a good ACoS on Amazon?
• Total Advertising Cost of Sales TACoS: To calculate this metric, you will need to total your ad spend for a fixed period in the same way described above. Then, you will need to go to the Detail Page Sales and Traffic Report by ASIN in the Business Reports section of Seller Central. Through the same fixed window, you will want to total up your Ordered Product Sales column; this will be your denominator. Understand how well your ads are performing. You can see if there are any areas for improvement. If your product sales are low compared to your ad spend, you may consider adjusting your strategy.
• ROAS Return on Ad Spend: ROAS is another angle from which to measure profitability. This metric is easily calculated via Vendor Central and Seller Central ad interface reports. In many of its reports, Amazon has also begun to roll out this metric on a per-ASIN or per-campaign basis. See Data-Driven Amazon TACoS Insights.
• Impression share: Impressions are the number of times a user sees something online. Users see ads, videos, images, news articles, etc. Impression share is the measure that shows how well a brand performs on a specific channel compared to its overall potential audience. For example, if you run a Facebook campaign with a $100,000 budget and get 100,000 impressions, your impression share will be 1%. If you run a similar campaign with a $1 million budget, and you get 10 million impressions, then your impression shares will be 0.01%
• Customer Lifetime Value (CLTV): Marketers should consider comparing customer lifetime value (CLTV) against customer acquisition cost (COC). CLTV measures how much revenue an average client brings over a specific period. COC measures how much a brand spends on acquiring each new customer. If CLTV is higher than COC, you’re spending money well. If CLTV is lower than COC, you might need to reevaluate your marketing strategies.

Calculating campaign effectiveness on Amazon

Key Performance Indicators (KPI) show how well your campaigns track against your goals. Marketing teams monitor various KPIs, but each campaign should only have about five. They should be specific, measurable, and achievable within your campaign timeline.

Advertising Cost Of Sales (ACOS)

Ad Spend / Ad Sales = ACOS

Advertising cost of sales (ACoS) is the inverse of return on ad spend (ROAS). To find your ACoS, divide your spending by the sales you generate from advertising. The number will tell you how much of your sales come from advertising. If you’re wondering why you should care about your ACoS, think of this: What’s the point of buying ads if you can’t measure whether they work? You wouldn’t buy a car if you couldn’t see how fast it went. So why would you buy something that doesn’t produce results?

ACS is an excellent indicator of success. However, if you’re using an agency to manage your campaigns, you should consider other metrics like CPA, ROAS, and CTR. These will give you a better idea of what you’re getting from your campaign.

Total Available Cost Of Sales (TACOS)

Ad Spend / Total Amazon Sales = TACOS

TACOS stands for Total Available Cost Of Sales. It is a metric used to measure the efficiency of an ad campaign. A lower TACOS means that you are spending less on advertising than what you bring in. However, if you have a high TACOS, you may need to increase your spending on advertising.

There are many ways to calculate TACOS, but the most common method is calculating the average cost per click (CPC) multiplied by the total number of clicks received. You can also divide the amount spent on ads by the total revenue generated.

Cost-Per-Click (CPC)

Spend / Clicks = CPC

CPC stands for cost per click. It is a metric used in online advertising. Companies like Google offer Pay-Per-Click options, which means you pay each time someone clicks your ad. CPC is used to determine if the ads are working effectively.

If you spend $20 on an advertisement and get ten clicks, you will pay $2 per click. However, if you get 100 clicks, then you will only pay $1 per click. Therefore, CPC is a metric used to measure the effectiveness of advertisements.

Many factors still influence each keyword’s price, including competition, quality score, and bid strategy. We recommend monitoring these metrics to ensure you get the best return possible.

Click-Thru-Rate (CTR)

Clicks / Impressions = CTR

Clicks/Impressions CTR. Click-through rate is an essential metric for any online advertising campaign. A high click-through rate means your ads are getting attention and clicking. And a low CTR means you’re losing money.

For Amazon, during Prime Day, many vendors saw their clicks per impression drop dramatically. This is likely because shoppers were looking at all the great deals and browsing instead of buying. So, if you’re not running a sale, you’ll probably see a considerable decrease in your CTR.

Many factors can influence the click-through rate (CTR) of an item. These include price, availability, shipping time, reviews, and the number of similar items available. Some sellers even change their prices at random intervals to see how it affects CTR.

Total Page Views (TPV)

Total Page Views = Organic Clicks + Paid Clicks

The Total Page Views metric shows how well your current strategy is working. If you are not seeing any increase in the number of visitors to your listing, it may mean your listing is not optimized correctly. Before making changes, you should always check the product title, description, images, and keywords.

Please make sure all of them accurately reflect what the product is about. It would help if you also considered adding another photo or two to show different angles of the product. This will allow Amazon’s search engine to understand what the product is and what it looks like.

Cost Per Order (CPO)

CPO = total costs for advertising ÷ number of orders

CPO is an important metric in Amazon Advertising. It shows the average cost of each sale concerning the total revenue. When optimizing your campaign, you should try to maximize this ratio.

The formula to get this ratio is as follows: Total Costs Incurred / Total Sales Made = CPO.

In other words, your CPO tells you your average cost per order. If you spend $5 per click and have made $10 in sales, your CPO will tell you if your ads are worth it. If you’re spending $1 per click and have made $100 in sales, you’ll need at least $100 to get an order.

The higher the CPO, the less effective the ad is.

CPO is an important metric because it tells you exactly what you spend on each sale. You don’t need to worry about bad sales or a temporary drop in sales per order. CPO is also an absolute figure that doesn’t distort anything and shows you the actual cost of each sale.

Organic Search Rankings

Organic search ranking position returned for a search term. According to CPC Strategy’s 2018 Amazon shopper behavior study, 70% of shoppers never click past the first page of an organic search result on Amazon.

What’s more, the top 3 results get 64% of clicks. These statistics highlight the importance of using search visibility as a KPI for Amazon. Search visibility means that when consumers type keywords related to your product, you will appear as close to the TOP of the search results as possible.

Start by gathering keywords that will help your products stand out from the crowd. You may want to focus on broad terms like “travel pillow” or “umbrella” because they are more expansive than the specifics of your product. Then, add brand names and related words to give your listing a unique personality.

Finally, incorporate your keywords throughout your product pages in a natural way. Avoid using them in place of important information about your products, though. For example, if you sell umbrellas, don’t put the word “umbrella’ in every sentence describing your product. That could confuse customers. Instead, explain what an umbrella does and why someone might need one.

Summary

A KPI is an important tool for business management, especially when evaluating the effectiveness of marketing strategies. To run your business successfully, you must determine which KPIs are relevant and effectively gather needed data and monitor those outcomes. That means staying on top of key metrics, keeping a pulse on sales, and ensuring you’re not missing any opportunities.

Amazon sellers need to focus on what matters, driving growth. If your team spends hours looking for the right data, manually downloading reports, and copy-pasting that data on a spreadsheet, that data-wrangling work is slow, messy, and expensive.

Supercharge your Amazon Retail Analytics KPIs with data automation. Create a custom Amazon KPI dashboard with Power BI or unite Ads data with Seller performance information like orders, returns, inventory, and fulfillment for a 360 view.

Openbridge offers a type of connector for various Seller services;

• Amazon Inventory: Get FBA Inventory Reports data for the listing, condition, disposition, and quantity to help with inventory.
• Amazon Fulfillment: Get complete, product-level detail on inbound shipments, shipped FBA orders, quantity, tracking, and shipping with FBA Fulfillment Reports and Inbound Fulfillment API.
• Amazon Orders: Order and item information for both FBA and seller-fulfilled orders, including order status, fulfillment and sales channel information, and item details with Order API and FBA Orders Reports.
• Amazon Finance: Balances, payouts, estimated and actual selling, storage, and fulfillment fee data with FBA Settlement Reports, FBA Fees, and Finance API
• Detail Sales & Traffic: Business-level Sales and Traffic reports offer performance metrics for product sales, revenue, units ordered, and page traffic metrics such as page views and buy box.
• Vendor Central: Manage retail business operations with automated integration so vendors can improve and maintain performance at scale while growing business.
• Retail Analytics: Vendor Retail Analytics delivers ordered revenue, glance views, conversion, replenishable out-of-stock, lost buy box, returns, replacements, and many more.
• Brand Analytics: Brand Analytics offers sellers and vendors market basket analysis, search terms, repeat purchases, alternate purchases, item comparisons, and more.

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