80/20 Your Amazon Advertising

You do this for 2 reasons:

1.) Cutting waste increases your profits, both short-term and ongoing

2.) You can add your known non-performers to your negative keyword list, so that you don’t waste money on them when researching new keywords.

You do it repeatedly because:

1.) Things change. Just because a keyword is profitable now it doesn’t mean it always will be (product life-cycles, seasonality, competitor changes, etc.)

2.) Your PPC account will have 100’s, if not 1000’s of “sneaky leakers” - low volume search terms which generate clicks (and therefore cost) but don’t create sales. In a typical 60 day Amazon PPC report these generally go under the radar - there’s not enough data to make a decision. But as your advertising history grows more and more “sneaky leakers” will trigger the criteria for being added to the negative keywords list.

This is a secret weapon in gaining advantages over your competitors… to find places to advertise that they haven’t even thought of… and most likely couldn’t afford to find.

Once you know you can minimise waste spend from the get-go (using your negative keywords list) you can be more aggressive with your auto-targeting or broad match ads.

These are like massive trawling fishing nets, harvesting volumes of potential keyword winners. Let them run, ruthlessly and repeatedly minimise the waste spend… and discover profitable keywords that you haven’t even considered before.

It almost certainly isn’t how you think it works.

And certainly not how 99% of what you read online leads you to believe.

How can we be so certain?

1.) We’ve advertised on Amazon since 2012 and we spent years testing theories until we made the discovery that explained why our previous optimisations, which were made on 100% solid logic, failed miserably and expensively.

2.) If you read Amazon’s own documentation carefully you can see that they actually hint at how Amazon PPC works. But it’s hidden in plain sight. You have to read between the lines. And even then it’s not immediately obvious.

3.) If you know where to look your data confirms it.

2.) It’s based on outdated information and a fundamental misunderstanding of how Amazon works.

ACoS is a false friend.

It’s a useful metric but it’s not the goal - maximising profit is.

The obsession with ACoS reduction leads to lost profits. After all, if an ad is profitable then you want to run it as much as possible… regardless of whether it increases your overall ACoS.

So you need to know your break-even ACoS - that’s your target maximum. Anything above that and you’re losing money, so you need to refine your ads to hit that level or better.

If your PPC account is structured with 1 product per AdGroup then you can optimise at the product level. It’s the most profitable.

Dayparting is a powerful tool for optimising your Amazon PPC strategy

• if your products get a lot of traffic
• if customers behave differently at different times of the day
• if that behaviour is consistent e.g. it doesn’t change seasonally

If a search term does not get enough traffic for dayparting then the temptation is to work at the AdGroup or even the Campaign level.

But any combining of data muddies the waters and leads to sub-optimal results, because you can’t know if the results are consistent across all of the search terms. So you may well sacrifice profitable sales in your quest for optimisation.

Dayparting is useful when used with the right product and market but it isn’t a cure-all.

It’s tempting to tweak your bids to try to save pennies per click to reduce your ACoS and increase your profits.

And it can work, although isolating the effect of the bid change from the numerous other factors is extremely difficult.

After all, even if you keep bids the same the daily statistics (eg number of sales, clicks, ACoS etc) can vary significantly.

So how can you tell what extra effect a small change in bid has?