Assessing your Amazon Sponsored Ad Campaign
In this post I’m going to address how to determine if your Amazon sponsored ad campaign is working. Is it a worthy investment? This is a short but very important post for maintaining good profitability. At the end of the day, it’s all about the money money money…. You get what I mean!
Okay so now you’ve been selling for a few weeks and your product has slowly worked its way up in page count for your desired keyword’s search results. This is fantastic news because now more and more eyes are getting to your listing organically, without any paid advertising. So when is it okay to stop using the Amazon sponsored ad campaign? After all, these ads have drastically increased your page views. In my case, even once my product reached page 1 for my desired keyword, the sponsored ads increased eyes on my listing by about 150%. That is huge right… well that depends.
Testing The Amazon Sponsored Ad Campaign
See, In my case I noticed that I was spending a lot of money on sponsored ads with the cost accounting for about 21% of my sales (Refer to the ACoS figure on your ad campaign page). This was a big deal for me. It meant that this large chunk came straight out of my margin on each product. For a niche product, this basically cuts your margin in half… or more. In light of this, I decided to experiment with the ad campaign by narrowing down on key words that worked and did not work in generating sales. I slowly dropped unsuccessful key words based on the number of sales it resulted in. To find this statistic,
- click into your sponsored ad campaign,
- click on your ad group,
- then click on the keyword tab.
Keep in mind that I dropped keywords off the campaign over a period of a week each, to assess the performance properly. My benchmark was that if the keyword didn’t bring in sales and had an ACoS of over 10%, I would consider dropping it. At the end, it turned out that the only really effective keyword for advertising was my main desired keyword. Now that’s fantastic, only I was already on page 1 of this keyword search results! From here I decided to stop the advertising campaign to see what happened and as expected, sales were hardly touched. I may have lost about 2 or 3 sales a month, but retained profits.
Bottom Line on Amazon Sponsored Ad Campaigns
In summary, my advice on this one is that it is not worth advertising for any keyword with a ACoS over about 10%. More importantly, it is not worth advertising for keywords for which you already rank on the first page, as you will most likely get that customer viewing your listing without the ad anyway. So why pay for the view instead of getting it for free? Don’t answer that… it’s a rhetorical question! This analysis of your ad campaign can be super effective as you will get rid of your unprofitable sales. Now keep in mind that I do not recommend doing this until you’ve been selling consistently for about 2 months. The reason being that when you start out, volume of sales is more important that profitability for metrics such as search rankings, BSR and also helps with seller feedback and reviews as well.
Now go forth and multiply…profits that is!