We’re big fans of the 80/20 rule. Essentially, the rule says that 80% of your conversions will come from 20% of your keywords. What does that mean for most sellers? They have keywords with zero conversions, and most don’t know what to do about it.
There’s plenty of confusion surrounding this topic, and even experienced sellers are left scratching their heads when they see a keyword that just isn’t getting conversions.
So what should you do about it?
Search Terms vs. Keywords
An important distinction to make is the difference between search terms and keywords. In Amazon PPC, the search terms you appear for aren’t always the keywords you’re bidding on.
If you have a broad-match keyword, let’s use “coffee mug” as an example, you could show up for a wide variety of search terms. “Coffee mugs for dads,” “Coffee mugs for Father’s Day,” and “Black coffee mugs,” could all show up on your search term report. Did you bid on these specific variations? No. But, a broad match keyword can result in your product appearing for quite a few different search terms that contain your keyword.
For this post, we’re going to focus on exact-match keywords. For a quick rundown on match types, an exact-match keyword only allows your product to show up when that exact keyword is typed into the search bar (plurals and misspellings included). Your product won’t show up for searches that simply contain your keyword, only a search for that keyword alone.
Optimizing Keywords with Zero Sales
We recently sat down with one of our Managed Services clients and made a shocking discovery. This seller had a relevant exact-match keyword that had $100 in spend and 0 conversions. At face value, that seems like a complete waste of money, right? Not quite.
For most sellers, spending $100 to get 0 conversions is bad news. However, this seller has single product ad groups, and the product tied to this keyword sells for over $7,000. This seller has a target ACOS of 20%, which means they should be willing to spend approximately $1500 before getting a sale.
While this is a very unique scenario, it illustrates the importance of making decisions based on your keyword data not on your first impression of the situation. Had this seller gone with their gut and paused the keyword, they would have trashed a relevant keyword before it had a chance to get going.
Setting Thresholds to Pause Keywords
We can’t use an arbitrary number to decide whether or not a keyword needs to be paused. If you set a benchmark for pausing keywords at 10, 20, or even 1,000 clicks before making a conversion, you’re likely either wasting ad spend or pausing perfectly good keywords.
Instead of arbitrarily setting a limit on the number of clicks before getting one conversion, use a ratio that serves as your threshold for pausing keywords. We recommend looking at the average conversion rate for your other keywords (for the product) and then setting your threshold at two or three times your average.
Let’s say you have a normal 10% conversion rate. After the first 10 clicks, if you don’t have a conversion yet don’t freak out. Wait until that keyword gets to 30-35 clicks without a conversion before you think about pausing the keyword.
Another strategy you can deploy when your keyword is approaching that upper threshold is lowering your bids. Reducing your bids lowers your risk because you’re limiting the potential loss in ad spend from another click that doesn’t result in a conversion. If you are very hands-on with your PPC, you can lower your bid a small amount after each click that doesn’t convert.
Measuring Keywords Across Every Metric
While conversion rate is the primary metric to look at when judging your keywords, you can also get great insights from other metrics.
What metrics can help you determine if a keyword should be paused?
- Cost per Click (CPC)
- Click Through Rate (CTR)
When you look at the averages for each of these metrics, you create the most complete picture of how your keyword’s performance. While a keyword may have a very low conversion rate, if it’s below your spend or CPC averages there’s no harm in keeping the keyword and gathering more data.
A Nightmare Scenario for Non-Converting Keywords
You’ve just launched a few campaigns for one product, and you have multiple keywords in each campaign. Your product sells for $100 and your target ACOS is 20%. That means you’re willing to spend $20 for every sale.
You’re bidding $1 for each keyword and your conversion rate is hovering around 10%.
You have 10 keywords and each keyword has a bid of $1.
Now, with the parameters set, let’s say you’re looking at your campaigns one day and see that you have gotten 10 clicks for each keyword. From these 100 clicks, you only have one sale. Time to panic, right? An ACOS of 100% must mean that something has gone horribly wrong.
While most sellers would freak out in this situation, by analyzing your keyword data you can get a better understanding of what’s going on. It’s very rare for sellers to reach their ACOS targets when they launch new campaigns.
If you look at this scenario through the lens of the entire campaign, you might see 100 clicks and only one conversion and decide to shut it all down. However, if you look at each individual keyword there’s simply not enough data to pause any of the keywords.
Don’t panic if you’re just getting started and your campaign-level metrics aren’t where you want them to be. Analyze each keyword individually and use the thresholds we outlined earlier to make decisions on how to optimize them.
Practical Solutions to this Keyword Conundrum
We now know how to properly gauge keyword performance, but how can you set yourself up for success when launching ad groups? We’ve come up with three solutions that will put you in the best position to properly optimize your keywords.
Solution #1: Starting with Fewer Keywords
As we saw in our “nightmare scenario” above, sellers can be tempted to make snap decisions based on ad group-level metrics. In the early days of an ad group, your data is spread out thin across your keywords.
To consolidate your data, use fewer keywords. Sure, the scope of your keywords may be smaller, but by using fewer keywords you’ll have fewer keywords that have zero sales.
Solution #2: Use Relevant Keywords
It may seem obvious, but you’d be surprised how many sellers think every keyword is created equally. That just isn’t the case. Some keywords are more relevant to your product than others.
The quickest way to get a bunch of non-converting keywords is to use keywords that aren’t relevant to your product.
Some keywords may be relevant, but that doesn’t mean they are the best fit either. If you’re selling large, concert-quality speakers, then the keyword “speakers” on Amazon will probably result in very few conversions because the category is so broad.
Solution #3: Limit Your CPCs
As we said before, combining your metrics gives you the best chance of making the right decisions about your keywords. While these thresholds are incredibly useful, that doesn’t always mean you’re comfortable with them.
If you want to limit your CPC during a certain stage of a keyword’s maturation, you can certainly do that. We recommend starting with only a conversion rate threshold and then moving into spend or CPC thresholds down the line. This ensures that you’re still collecting data, but you’re also able to limit your spend.
The metric we swear by, ACOS, can actually lead you astray when looking at individual keyword performance. Let’s say you expect one conversion from 100 clicks on a keyword for a very expensive product. The first 100 clicks come in, and you get one sale. You’re on track. Now, if the next 70 clicks don’t result in a sale, you’re ACOS is going to rise dramatically.
This rise in ACOS can cause sellers to panic and only focus on that metric. Don’t be fooled. Your keyword performance hasn’t changed. You’re simply waiting for that next conversion from the next 100 clicks. It may not show up, but you have to at least give it a chance.
Patience is essential when it comes to selling expensive items on Amazon, and if you don’t let that cycle of having one conversion for every 100 clicks (on average) run a few times, you can’t make a decision about that keyword.
Seeing a bunch of keywords that have zero conversions can be concerning, but that doesn’t mean they aren’t good keywords.
Set thresholds based on your average conversion rate and other metrics and base your decisions around those limits. If you have a keyword that is approaching the threshold to be paused, lower the bid so you can minimize the loss in ad spend.
Don’t make decisions about keywords based on campaign or ad group level data. Even if things look awful, judge each keyword individually.
Finally, be patient. Data doesn’t just show up out of thin air, and no one can tell you which keywords are working and which ones should be paused in the early stages of data collection.
Discover Us on our PPC Den Podcast
If you enjoy supplementing your long reads with audio, we cover this topic on our podcast as well.
Listen to it in the episode below or find us on your favorite streaming platform, like Apple, Google, Spotify, and more!
- 1:10 Intro
- 3:00 What to do with keywords that have zero sales
- 4:20 Search terms vs. Keywords
- 8:25 Keyword case study
- 10:20 When should you pause a keyword?
- 17:43 Keyword management in practice
- 23:28 How to interpret and act on your keyword data
- 37:00 Managing converting keywords
- 40:30 Closing thoughts
- Keyword Cannibalization: Good or Bad?
- How One Keyword Can Apply to Multiple Products
- Ad Badger & TurnKey: Amazon Product Listing Optimization
- Seven Habits of Highly Effective Amazon PPC-ers
- Ad Badger and ZonGuru: Boost Your SEO with High Value Keywords
- Answered Prayers: Negative ASIN Targeting Comes to Auto Campaigns
- Much Ado About Budgets
- How to Get Over 100% Conversion Rates on Sponsored Display Ads
- New Launch Strategy for New Products: Skip the Auto?
- Amazon PPC Data Trends to Shape Your 2020 Strategy
- How Does Amazon PPC Work With Misspellings?
- Following Amazon’s Suggestions? The Mysterious “Suggested Bid”
- Negative ASIN in Amazon PPC Auto Campaigns: Is it Possible (Part 2)
- Negative ASIN in Amazon PPC Auto Campaigns: Is it Possible (Part 1)
- When You Should DIY Your PPC (and When You Shouldn’t)
- An Introduction to Targeting Options on the Amazon DSP
- Optimizing on a Hunch
- 5 Things You Don’t Know About Product Targeting
- Amazon PPC Stats During COVID-19| April 2020
- Sponsored Brand Ads Update: Now You Can Edit Creatives
- Amazon PPC Stats During COVID-19
- Seller Central Campaign Manager is Moving to Amazon Ad Console in 2020
- Taking Your Amazon Products & Campaigns Global: A Primer
- Best Practices for Selling on Amazon During COVID-19
- Principles and Mindset for Amazon Marketers During Coronavirus
- Coronavirus (Covid-19) and Your Amazon PPC Campaigns
- Incorporate “Adjust Bids by Placement” into Your Keyword Bids (Part 2): Multi-Keyword Campaigns
- Incorporate “Adjust Bids by Placement” into Your Keyword Bids (Part 1): Single Keyword Campaigns
- Grow Your Amazon Campaigns with Demographics Data
- What Consumer Behavior Says About You: Amazon Brand Analytics
- How to Raise Lifetime Value with Market Basket Report
- Search Frequency Rank: How to Identify Most Important Keywords
- Long Tail Search Terms: Amazon PPC Silent Killer
- 7 Tips to Get More Clicks on Amazon Ads
- LIVE Amazon PPC Campaign Audit
- Amazon PPC Keyword Research in 2020: RPSB Revisited
- Our Top Predictions for Amazon PPC in 2020
- 7 Bad PPC Habits to Kick in 2020 (And 3 Good Ones to Start)
- The PPC Tasks We Put on Our Project Management Tools
- A Data- Oriented Approach to Advertising in December
- The Wait is Over… Search Term Reports for Sponsored Brand Ads are Here
- What to Do When It’s Time to Sell Your Amazon Business with Coran Woodmass
- Ramping Up for Cyber Monday and Black Friday with Data-Driven PPC Strategies
- Amazon PPC Campaign Structure: 6 Layers of Complexity
- Amazon PPC Today vs. Yesterday: What’s Changed, What Hasn’t
- Make Your Best Keywords Better with Single Keyword Campaigns
- 6 Levels of Amazon PPC Mastery
- How to Advertise Commodity and Unique Products with Lukas Matthews
- Amazon SEO – Bridging the Gap with PPC
- Amazon’s New Sponsored Display Ads (Beta)
- Listener Q&A: Optimizing Placement Settings
- The Problem With Optimizing Low-Converting Products (And How to Solve It)
- 4 Reasons Why Lowering Your Bids Won’t Always Lower your ACOS
- What to Expect From 30 Days of Running Amazon Ads
- Should You Segment Your Branded Keywords in Amazon Ads?
- Promoting your Products with Amazon Coupons
- Three Effective Ways to Optimize Amazon PPC Bids
- 4 Things Amazon Does Better than Google and Facebook
- Amazon DSP with Kiri Masters
- Increase Conversion Rates for Sponsored Brand Ads
- Clickfraud, Who to Hire, and More Common Amazon PPC Questions
- A Data-Driven Approach to Prime Day PPC
- Improving Your Account With Amazon Reports
- The Complete Guide to Self-Auditing Your Campaigns
- A Round-Table Discussion About Placement Settings
- My 5 Predictions for the Future of Amazon PPC
- The Importance of Indexation for Amazon PPC
- Click Through Rate (CTR) Rundown
- An Introduction To Bulk File Operations
- The Latest Sponsored Brand Ad Updates
- Defining Your PPC Goals & Setting ACOS Targets
- Making Sense of New to Brand Metrics
- Should You Bid on Competitors’ Branded Keywords
- Our Gripes About Amazon Sponsored Brand Ads
- Amazon Advertising Launch Strategy for New Products
- The Ultimate Amazon PPC Roadmap
- How to Scale Using PPC – A Case Study
- The Star-Crossed Lovers (Organic & Paid Traffic)
- Cranking Up Conversion Rates
- All Things Negative Keywords
- The Dreaded Amazon Data Reporting Delay
- What We Love About Amazon PPC
- First Look on New Bid Options in Amazon
- Dissenting Thoughts on PPC Budgets
- The Strangest, Most Popular PPC Strategy: The Keyword Dump
- Product Targeting – Into the Great Unknown
- Campaign Naming Systems
- Hitchhiker’s Guide to Sponsored Products (Part 2)
- Hitchhiker’s Guide to Sponsored Products (Part 1)
- Amazon PPC Advertising Stats
- The Advanced Basics of Amazon PPC
- Amazon’s New Product Targeting Features
- The Bid+ Conundrum
- Why We’re Living In The Golden Age of Amazon PPC
Watch Mike & Stephen on YouTube
If you enjoy supplementing your long reads with video, well, hot diggity dog, you’re in luck! We cover this topic on our YouTube channel too.
Watch it below and please don’t forget to ‘like’ and subscribe.