Keep Your Amazon PPC Campaigns Healthy During the Coronavirus Pandemic

April 1, 2020
By The Badger

We are in unpredictable times with the sudden rise of COVID-19. With changes in almost every aspect of daily life, it only makes sense that your Amazon PPC campaigns will change as well.

Obviously, almost every company has released information on how they and their customers should go about conducting business during this time. We don’t want to bore you with another generic statement, but there have been quite a few questions regarding coronavirus on our forums and we want to help.

We’ve built a toolkit to help you make the most informed decisions for your campaigns based on five key metrics:

ACOS
Conversion Rates
Cost per Click
Revenue
Revenue per Click

Timeframe

Before diving into these five metrics, we need to know how to analyze them. This starts with the timeframe we look at.

If you’ve been keeping up with your campaigns, it’s very likely that you saw things get unpredictable around the 7th of March. With March 7th being less than 30 days ago, using “Month to Yesterday” as your timeframe makes the most sense right now.

ACOS

Our first piece of advice, and perhaps the most important, is don’t freak out over high ACOS!

Longevity matters in campaigns. The only times we recommend pausing campaigns is if the campaign isn’t performing well under normal circumstances, which we clearly aren’t experiencing right now.

Instead of pausing your campaigns, optimize your campaigns.

An important thing to remember is that campaigns don’t spend money, keywords spend money.

At the end of the day, your keywords and bids are what determine your ACOS. If a campaign has a high ACOS, take your best performing keywords in the campaign and set your focus on them.

Speaking of checking out keywords and bids, you should be adjusting your bids daily. This is an unpredictable time and there isn’t any reliable data to make decisions from. If you’ve been the kind of person who only adjusts bids every week, it’s time to pay more attention.

Conversion Rate

Conversion rates are the percentage of clicks that result in sales. Some keywords will have high conversion rates and some will be lower, but this rate is time relative.

Conversion Rates also dictate CPCs (cost per click). Higher conversion rates mean higher bids and lower conversion rates result in lower CPCs. As you drill down from ACOS and look at Conversion Rates, it becomes more clear where optimization can occur.

What separates a strong marketer from a weak marketer during an unpredictable time is how they handle ACOS and Conversion Rates.

Weak marketers will see a campaign with high ACOS for keywords and scrap it.

Strong marketers will look at the Conversion Rates historically, the Conversion Rate currently, and judge what the current value of the keyword is and adjust the bid accordingly.

Essentially, Conversion Rates are fluid, and basing the level of success for a keyword off of one glance at a Conversion Rate would be an uninformed decision.

Are You in a Position to Thrive or Dive?

During this epidemic, we’ve seen a split between the average conversion rate among industries. With quarantines and shelter-in-place policies in many areas, people are turning to e-commerce to make purchases, and this is benefitting sellers in some niches while others are getting hammered.

Which niches are thriving and seeing boosts in revenue?

Household products
Supplements
Health items (thermometers, medical devices for seniors)
Essentials for students and home-workers
Home improvement and decor items

Which niches are struggling?

Luxury items
Cosmetics (we’re not going out, right?)
Disposable income products (hobbies, etc.)

Keep in mind that this situation is fluid. We’re fixing to head into summer, and no one knows when this situation will end, so it’s important to keep your ear to the ground in case your niche starts to thrive or dive.

A great example of this is the stimulus checks people will be receiving soon. While some people will spend this on essential items and necessities, others may splurge and buy that item they’ve just been dying to have now that they $1,200 that’s burning a hole in their pocket.

Cost per Click

The great thing about Amazon PPC is that in some way all of these metrics are linked together. Cost per Click (CPC) is directly related to Conversion Rate and tied to ACOS. If you have high converting keywords, a higher CPC is fine. However, you don’t want too high of a CPC and you can measure that by looking at your ACOS.

During this tumultuous time, however, many sellers aren’t seeing high conversion rates, and they’re looking at their ACOS and wondering why it doubled. This is most likely due to a falling conversion rate. If you’re in this situation, you’ll want to lower your bid.

If you are seeing an ACOS spike in a good keyword, optimize your bid. Find out what that keyword is worth and scale down the bid in the same way that your ACOS is spiking. If your ACOS doubled, cut your bid in half.

One reason you might see your ACOS go up, while having a static conversion rate and revenue, is that your CPC went up. Why? If you fall into one of the “thrive” niches, it’s likely that your competition is bidding more aggressively forcing your bid to get closer to your max bid.

If you’re in a “dive” niche, you might be having the same problem. Why? Some competitors may lower their bids for Top of Search placements or scrap their campaigns altogether. Now you are the highest bidder for Top of Search placements and your CPC is higher. Don’t freak out. Just look at your keywords and adjust your bids.

To find the perfect placement bids, check out this free tool.

Revenue

Let’s take a look at the top line. As with the previous metrics, for some sellers revenue is increasing and for others it’s taking a hit.

Revenue determines inventory, ordering, and a host of other decisions for sellers.

The first thing to think about when looking at revenue is how much is your revenue costing you? If your cost of acquisition is higher and your revenue is stable right now, you’re losing money.

Don’t be too hard on yourself if your revenue is dropping. Maybe look into a different market or tap into retargeting ads and different campaign strategies.

While the demand on Amazon is increasing from the 2019 statistics, sellers in “dive” niches should hold on. People are looking for very specific items and essentials. When the seas get calmer and people adjust to quarantine life, your revenue should get closer to normal.

Revenue per Click

Revenue per Click (RPC) fluctuates at all times, so it’s a good idea to always keep an eye on it. However, it’s imperative that you are on top of it during times like these. If you are unfamiliar with Revenue per Click, it’s simply Total Revenue divided by Total Clicks.

Why is it so important right now?

If you don’t know where your revenue is coming from, it’s impossible to fully optimize your bids. Top-of-Funnel clicks have a low conversion rate, and probably aren’t doing too hot right now. Lower their bids to get to your Target ACOS. On the flip side of the coin, a Bottom-of-Funnel click, say on a branded term, will most likely still have a high Revenue per Click so you should maximize the amount of revenue that comes in from that keyword.

It’s also a good idea to pause your research campaigns. Focus on exact match keywords and get back to research campaigns when things get a little better.

In short, trim the fat and it will help your bottom line.

Key Takeaways

A calm sea never made a skillful sailor. Stay resilient during this time.

Looking at these five metrics on a daily basis, through the right lens (timeframe), should give you a good idea of where you stand. If you stay on top of your metrics and make the necessary changes to optimize, you’ll put yourself in the best position possible.

Stay safe and be a good neighbor during these tough times.