Amazon PPC vs. Total Conversion Rate: What's the relation?

Hello advertisers, probably one of the questions you might have asked yourself is - “Is there any relationship between PPC Conversion Rate (Let’s call it CR) and Total Conversion Rate (Again, let’s call it TCR) or if I somehow increase my CR, will it also increase my TCR ?”

Are you willing to know the answer? Let’s find it out together with the following analysis.

But before that, let’s just go through the basic definitions of these terms quickly -

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Amazon PPC Conversion Rate

PPC Conversion Rate (or CR): it is the ratio between the total sponsored orders and the total number of sponsored clicks. It just portrays how many orders were made through the total clicks on the advertisements.

PPC Conversion Rate = Sponsored Orders / Sponsored Clicks

You can find these metrics easily on your advertising console.

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Total Conversion Rate

Total Conversion Rate (or TCR): To be transparent, it is not possible to get the TCR using Amazon report metrics. Because there is no record of the total clicks on the product in seller central, Amazon doesn’t share the number of organic clicks, they only share the number of sponsored clicks. But fortunately, m19 offers a feature on its dashboard where it displays the TCR explicitly. We assume the TCR to be the ratio between total orders (sponsored + organic) and the total number of sessions provided by Amazon.  

Total Conversion Rate = Total Orders (Sponsored + Organic) / Total Sessions

Okay, so what’s a session??

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Session on Amazon

According to Amazon, a session is when a unique visitor visits your page within a certain time period. And since, it can also happen because of the advertisements, the sessions also contain sponsored clicks.

So now that you are clear with the terms, let’s move to the analysis. We started by selecting the three biggest accounts from our valuable clients and recorded the CR, TCR, and ACOS for thousands of ASINs they advertise on Amazon for the last 90 days globally. Then we divided the data into 5 groups according to the ACOS intervals of 20% (0-20%, 20-40%, 40-60%, 60-80%, 80-100%) just to check if the conversion rates vary with respect to the ACOS too. At last, we plotted a scatter graph for each of the groups, where the ACOS ranged from 0% to 100% within an interval of 20% as explained above.

Let’s see how the CR v/s TCR scatter plots look for all the ASINs-

Here, each dot represents one ASIN. The x-axis is the CR and the y-axis is TCR. We can observe here that the ASINs with higher observed ACOS are conserved to low conversion rates (CR and TCR both). Also, the ASINs with lower ACOS seem to have higher CR than the TCR and vice versa. Still, we can’t see any promising relationship between the CR and TCR.

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10 Best ASIN

Now, let’s have a look at the performance of the 10 best ASINs -

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Ahh!! we know, it is not very visible from the graphical representation of how these two parameters are related, so we dived a little deeper and calculated the linear bivariate correlation between them.

Yes, of course, we are not going to share the methodology and the process, we don’t want to make it a statistics lecture (boorrriinnggg). But the conclusion says that these two parameters are positively correlated, but the strength of the correlation is very weak. Hence, we can’t really assume that they depend on each other very much.

But still, there are some vital points that one should keep in mind while checking these conversion rates as it vastly affects your Amazon PPC advertisement performance.

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Conclusion

In a simpler (and less complicated) way, you may think that the TCR is basically a mixture of CR and Organic Conversion Rate (Organic orders/ Organic clicks, let’s call it OCR). So, when TCR > CR, it implies that the OCR > CR. Which is a signal for an optimum condition for the Amazon PPC advertisements. Because it depicts that your Brand, products, product pages, or presentation are already eye-catching and fascinating to the customers. So, now you can make use of Amazon PPC advertisements to increase the traffic to your products, thus increasing the overall sales and performance.

But, if TCR < CR, it implies that the OCR < CR, which depicts that there is still scope for improvement in your product pages, presentations, etc. So, the first step would be to accomplish a product page with perfect description, alluring pictures, and best reviews and recommendations. and then increase the traffic via Amazon PPC advertisements.

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m19 as a PPC Tool

We at m19, take care of these things on a regular basis. Our customer support and analytics team keeps an eye on your brand performance and brand popularity to make the most for you. And, no doubt our AI-driven tool keeps optimizing your campaigns every day, making you save efforts and increase your productivity .