The maximum bid in the Pay-per-order advertising model on Ozon will increase to 28%. The change will affect sellers who use this format as their main card promotion tool.
The "Pay per order" model assumes that the advertising budget is deducted only when the order is actually completed, and not for impressions or clicks. That is why it is popular with sellers who seek to control the cost of attracting a buyer. Raising the ceiling to 28% means that competition in the auction may shift upward: large sellers with high margins will have the opportunity to aggressively outbid bids, squeezing less profitable participants out of visible positions.
For importers selling goods through Ozon, the increase in advertising costs is superimposed on the existing burden: customs duties, logistics, site commission and possible exchange costs. At a rate close to 28%, advertising costs can match margins for a number of product groups, primarily in electronics, household appliances and other categories with historically low margins from importers.
This is not the first time that the site has raised the stakes. Each cycle of rising advertising costs forces sellers to either raise the price of the product or reduce their advertising reach. Both scenarios lead to a decrease in the volume of orders or to a compression of profits, depending on the elasticity of demand in a particular niche.
For sellers working with an imported assortment, it makes sense to recalculate the unit economy in advance, taking into account the new maximum bid, and determine at what value advertising ceases to pay off. Setting a hard ceiling on the bid in the advertising account and regularly checking the actual cost of the order against the planned one is the minimum step before the changes take effect.
Related materials:
- Ozon has launched a "Target expense" — advertising is now under control — how to limit the share of advertising expenses in a campaign
- Sellers' expenses on marketplaces have reached 47.8% of the product price. How much of the price is already being consumed by advertising and commissions
- Ozon has raised the FBO insurance rate to 0.0838% per day, which has become even more expensive for Ozon sellers this week
