Question: You want to understand the cost of advertised products. The search term report indicates that the searches for "women perfumes" have a click-through rate of just 5%. Which of the following metrics should be looked at to help understand the advertising cost?
- Advertising cost of sales (ACOS)
- Budget
- Spend
Explanation
Advertising cost of sales helps evaluate advertising cost by showing ad spend as a percentage of attributed sales. It is calculated by dividing ad spend by attributed sales, then multiplying by 100. A low click-through rate can indicate weak engagement, but ACOS is needed to understand whether the ad spend is efficient against sales generated. This metric is more relevant for cost analysis than viewing spend alone because it connects advertising cost to revenue performance.
Why the other options are incorrect
Budget sets the amount available to spend, but it does not show cost efficiency against attributed sales.
Spend shows how much money was used, but it does not explain whether that cost produced efficient sales.
Source for verification
https://advertising.amazon.com/library/guides/acos-advertising-cost-of-sales
https://advertising.amazon.com/library/guides/advertising-budget
The answer(s) to the question is highlighted in the BOLD text above. You can also find more questions and answers related to the exams on the "Amazon Sponsored Ads Advanced Certification" page.