When ACOS rises, the first instinct is to cut bids. Sometimes that is right. But if your cost per click hasn’t gone up, bids are not the problem.
Split ACOS into its two parts
ACOS depends on two things: what you pay per click and how many clicks turn into sales. If CPC is flat or falling and ACOS is still rising, your conversion rate is dropping.
In one account we audited, US ACOS drifted from 36% to 48% over two months. CPCs actually fell 7%. Conversion rate fell 28%, from 12.0% to 8.6%. Cutting bids would not have fixed that.
Where conversion usually leaks
- Match type drift. Phrase and broad match pick up looser searches over time. In that account phrase clicks jumped 156% in a month while conversion halved.
- Zero-order search terms. We found 1,267 search terms spending without a single order, worth about $1,262 a month.
- The listing itself. Lost Buy Box, low stock, a price change, new negative reviews or a competitor’s coupon all cut conversion.
- Wrong product for the search. Some terms send shoppers who want something slightly different. They click and leave.
What to do
- Compare CPC and conversion rate month by month before touching bids.
- Pull the search term report and add negatives for terms with clicks and no orders.
- Move proven terms into exact match campaigns where you control the bid.
- Check the listing for anything that changed around the date conversion fell.
If your ACOS is climbing and you are not sure why, a free audit will show you which of these is happening.