Learning how to optimize your Amazon PPC campaigns can be stressful but once you understand the metrics you’re looking at, you can easily optimize your Amazon PPC campaigns. With some simple math, you can make changes to bring your least efficient keywords up to par and reach or surpass your goals within your advertising budget.
Got a few minutes on a coffee break? That’s all it takes. Let’s break it down.
How To Optimize Amazon PPC Campaigns: Find your Ad Groups
Open your PPC campaign dashboard. Find the campaigns you can make the most impactful changes to by sorting by spend, from most expensive to least expensive. High spend campaigns are typically the campaigns that have run the longest, generated the most data, and have the most room for improvement. They also represent your overall ACOS better than smaller campaigns. These Amazon PPC optimization tips will help campaigns of any length but having at least a month of data will make your decisions much easier.
Open your highest spending campaign. Skip campaigns that are already at or below your target ACOS. If you don’t have a target ACOS, use 30%. ACOS is Advertising Cost of Sale, which is how much money you’ve spent to achieve the sales of a given campaign or keyword. Since this is represented as a percentage, you can quickly see the effects of your PPC optimization by comparing ACOS from week to week.
Check the placements tab to see if you have any modifiers that would affect your data. These Amazon PPC optimization tips are most reliable for campaigns without placement modifiers. Sort your ad groups by spend as well and open the highest spending groups in separate tabs. Go to the targeting section and set the date range to the last 30 days for each group. Use a shorter time period if you expect your conversion rates to change rapidly, such as during a relevant holiday season or after a recent ad campaign on another platform.
Organize your Data
Make sure you can see the following columns:
- Cost-per-click (CPC)
- Advertising cost of sales (ACOS)
Add any missing columns from the dropdown menu at the top of the table. You’ll use this information to lower each keyword’s ACOS by lowering the bid.
Once again, filter the keyword list by spend to see the highest spending keywords first. Find keywords with high spend and high ACOS. Ignore keywords with low spend, and especially keywords with low clicks – they lack enough data to make meaningful decisions based on their ACOS.
Amazon PPC Optimization Tips
Follow these steps to optimize each keyword:
- Multiply the sales column by your target ACOS. This gives you the maximum spend for that keyword, which is how much money you should have spent during the chosen time period to achieve the ACOS that you want.
- Divide that keyword’s maximum spend by the number of clicks it received. The resulting number is how much each click should have cost to reach your ACOS during the chosen time period – the cost-per-click (CPC).
- Set your new CPC as your bid for that keyword.
This approach uses historical data to inform the bid for each keyword under the assumption that each keyword will continue to perform roughly the same in the following weeks or months. Your ACOS should move toward your target as a result. It may fall a little short, requiring further optimization, or overshoot the target, yielding greater results than expected.
Note that CPC and Bid are not the same. Your bid is the maximum amount that you’re willing to pay for a click, and your CPC is your average winning bid for that keyword. Your CPC will not change if the competition for that keyword doesn’t change. This is important to understand because dropping a bid from $10 to $3 will have absolutely no effect on your ACOS if the CPC for that keyword is $2.50. On the other hand, having a bid that is much higher than your CPC will occasionally result in very high short-term ACOS if a competitor decides to increase their spend for a short period of time, such as a product launch or PR push. In the long run, you won’t gain much by fighting for the highest bid in these situations.
Keep in mind that any change you make to your bid also affects other aspects of your sales funnel. Lowering your bid changes your PPC advertisement’s placement. Your product may show up on later pages or on product pages instead of being at the top of the list. This can affect brand awareness and may change the relationship that your PPC ad has with the products surrounding it. Receiving fewer total conversions at a lower ACOS may not always give you a net gain in profits if your ACOS is hovering around your target. Remember that customers are at the other end of the equation and be open to ongoing optimization for the best results.
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