Measuring profitability by only looking at return on ad spend (ROAS) doesn't provide a holistic view of your Amazon business. In order to accurately measure the profitability of your advertising and Amazon business, you need to understand how much it costs to acquire new customers and how they interact with and purchase from your brand long term. That's where Amazon Marketing Cloud (AMC) comes in.
In this episode, Gloria Steiner and Andrew Fox discuss the importance of understanding your customer acquisition costs (CAC) and their longterm value (LTV) and how to calculate your LTV:CAC ratio and measure profitability.
With these insights, you can review your ad strategy to better understand what's impacting your profitability and shift your advertising efforts towards the audiences that are going to drive the most growth in the long run.
