= Actual Ad Spend - Ad Spend required to meet Target ACOS
Overspend & Underspend is a new metric created by Sellics to help analyze your campaigns more effectively.
It will show you by how much a campaign, adgroup or Keyword overspent in terms of surpassing (or ideally underpassing) your target acos.
Please note: You'll need to enter your Target ACOS to use the Overspend metric.
Campaign Revenue = $100
Campaign Ad Spend = $20
Campaign ACOS = 20%
Target ACOS = 15%
--> in order to reach a Target ACOS of 15% with $100 revenue, the ad spend would have had to be $15.
The Overspend is therefore $20 - $15 = $5.
Prioritze Optimization efforts based on Meaningful Data - Sort Table by Overspend
Although the ACOS remains a good metric to determine your ad efficiency, at the end of the day it is only a % figure, ie. a relative number between ad spend & ad revenue.
On the other hand, PPC Profit would not tell you how efficient your ads are, as this figure also highly depends on the product's general cost structure and break-even point.
Therefore, even if a campaign is making you spend far more than you'd like, its ACOS or Profit could still be favorable compared to another campaign's ACOS or Profit. This would have you mistakenly put your optimization focus on the campaign with the higher ACOS (/ lower Profit).
In the first example, the campaign overspent 5$ and is showing an ACOS of 20%.
However, there can be several scenarios where a campaign with a lower ACOS, eg. 10%, may have overspent far more money:
Campaign Revenue = $1000
Campaign Ad Spend = $100
Campaign ACOS = 10%
Target ACOS = 5%
--> in order to reach a Target ACOS of 5% with $1000 revenue, the ad spend would have had to be 50$.
In this second example, we overspent $50, compared to the $5 in the first example, even though the ACOS from the first example's campaign was twice as high.
Conclusion: As you begin your optimization efforts, Overspend represents the best KPI to sort your campaigns, adgroups or targets by and thus immediately identify the ones that most require your attention.