Help Me Lower My TACoS: Understanding the Advertising and Organic Challenges on Amazon

March 4, 2024

One of the most common questions we receive is, “Help me lower my TACoS.” TACoS, or Total Advertising Cost of Sales, is a crucial metric that measures the effectiveness of your advertising campaigns on Amazon. However, before we can address the issue of lowering TACoS, we need to identify whether the problem lies in advertising or organic visibility. In this article, we will delve into the key factors that determine whether you have an advertising problem or an organic problem, and how to tackle each of them effectively.

Advertising vs. Organic: Identifying the Problem  

To determine whether you have an advertising problem or an organic problem, there are two important aspects to consider. First, you need to assess the percentage of your sales that come from ads. Second, you should evaluate your visibility on Amazon’s search results for your top keywords. Let’s explore these factors in detail. 

Percentage of Sales from Ads  

What is the percentage of your sales coming from ads? If over 50% of your sales are coming from ads, and you go and lower your spend, you’re just going to drop your total revenue, which is going to hurt.

– Destaney

Understanding the proportion of your sales generated through advertising is crucial in determining the impact of reducing your ad spend. If a significant portion of your revenue is derived from ads, lowering your advertising budget without addressing the underlying organic visibility issues may result in a decline in overall revenue. It is essential to strike a balance between organic and paid strategies to maximize your sales potential. 

Organic Visibility on Amazon  

Go to Amazon and type in your top five keywords and see if you’re on the top eight. If you’re not in the top eight, you’re probably having to rely on ads for visibility again, meaning your TACoS problem is more than likely an organic problem, not an advertising problem.

– Destaney 

Checking your ranking on Amazon’s search results for your top keywords provides valuable insights into your organic visibility. If your listings do not appear within the top eight results, it indicates that you heavily rely on ads to gain visibility. This suggests that your TACoS problem is primarily an organic problem, as you are not receiving enough organic traffic to drive sales. Addressing this issue requires optimizing your listings and improving your organic ranking.

Addressing Advertising Challenges  

If you have identified that your TACoS problem stems from an advertising issue, it is crucial to address it effectively. Let’s explore some strategies to optimize your advertising campaigns on Amazon. 

Targeted Advertising Campaigns  

“Am I spending too much money?”  

Evaluating your advertising spend is essential to ensure that you are not overspending on campaigns that do not yield significant results. By analyzing your advertising data, you can identify which campaigns are driving the most sales and focus your budget on those. Targeted advertising campaigns allow you to optimize your spend and maximize your return on investment. 

Keyword Research and Optimization  

Go to Amazon and type in your top five keywords.

Conducting thorough keyword research is crucial for effective advertising on Amazon. By identifying the most relevant and high-performing keywords for your products, you can optimize your campaigns to target the right audience. Additionally, optimizing your product listings with these keywords improves your organic visibility, reducing your reliance on ads for visibility.

Monitoring and Adjusting Campaign Performance

If over 50% of your sales are coming from ads, and you go and lower your spend, you’re just going to drop your total revenue, which is going to hurt.

– Destaney  

Regularly monitoring and analyzing the performance of your advertising campaigns is essential to make informed decisions. By tracking key metrics such as click-through rates, conversion rates, and cost per click, you can identify areas for improvement and make necessary adjustments. This iterative process allows you to optimize your campaigns over time and achieve better results. 

Overcoming Organic Visibility Challenges  

If your TACoS problem is primarily due to organic visibility issues, it is crucial to focus on improving your organic ranking and driving more traffic to your listings. Let’s explore some strategies to enhance your organic visibility on Amazon. 

Listing Optimization  

If you’re not in the top eight, you’re probably having to rely on ads for visibility again.

– Destaney  

Optimizing your product listings is key to improving your organic visibility on Amazon. This involves strategically incorporating relevant keywords in your titles, bullet points, and product descriptions. By aligning your listings with popular search terms, you increase the likelihood of appearing in the top search results organically, reducing your reliance on ads for visibility. 

Enhanced Brand Content and A+ Content  

Utilizing Enhanced Brand Content (EBC) and A+ Content can significantly enhance your product listings and improve your organic visibility. These features allow you to showcase additional product information, high-quality images, and engaging multimedia content. By leveraging these tools effectively, you can create a compelling and informative listing that stands out from the competition, increasing your chances of ranking higher organically.  

Customer Reviews and Ratings  

If you’re not in the top eight, you’re probably having to rely on ads for visibility again

– Destaney  

Positive customer reviews and ratings play a crucial role in improving your organic visibility on Amazon. Encouraging satisfied customers to leave reviews and ratings not only boosts your credibility but also signals to Amazon’s algorithm that your product is popular and relevant. This can lead to higher organic rankings and increased visibility, reducing your reliance on ads. 

Implications and Future Outlook  

Understanding the distinction between advertising and organic challenges on Amazon is vital for long-term success as a seller. By accurately identifying the root cause of your TACoS problem, you can implement targeted strategies to address the specific challenges you face. Balancing your advertising and organic efforts is crucial to maximize your sales potential and drive sustainable growth on the platform.  As Amazon continues to evolve and competition intensifies, sellers must stay vigilant and adapt their strategies accordingly. Regularly monitoring performance metrics, conducting thorough keyword research, and optimizing product listings are ongoing processes that require continuous attention. By staying proactive and responsive to changes in the marketplace, sellers can position themselves for success and overcome the challenges they face.  

In conclusion, lowering your TACoS requires a comprehensive approach that addresses both advertising and organic visibility challenges. By leveraging the insights shared in this article and implementing the strategies discussed, you can optimize your advertising campaigns, improve your organic visibility, and ultimately drive sales growth on Amazon.