New Year’s Resolutions for Your Amazon Sponsored Products

It’s the new year and you have some account cleaning to do. In order to maximize sales in 2018, you need to keep your account healthy. Just like your body, there can be leftover junk from the holidays that you need to get rid of. I’ve seen great holiday campaigns go bad after the Christmas decorations come down. I know it’s hard to accept the holidays are over, but you need to revamp your campaigns to stay competitive. Last week, we posted about Ad Badger’s resolutions, but this one’s for the sellers. Here are some resolutions for your Amazon Sponsored Products. 

Know Your Goals

You’ve been hearing it all your life: Write down a list of goals for your year. Well, while I do advise this, try to write down an account checklist for your Amazon account. They are business and monetary goals after all.

I typically don’t get along with other animals besides the occasional badger, but I thought this be a great addition to your 2018 goals: Make it rain money on your dog with the cash you make from selling on Amazon. GIF courtesy of GIPHY.

Everything centers around your ACoS. In the Badger’s Den, our Amazon PPC Facebook group, users voted hitting your target ACoS should be the top priority for keeping your account fit in 2018. Good ACoS doesn’t really exist unless you know what you’re goals are. Meaning, ACoS is just a percentage if you don’t know what your target ACoS is. I want to help you find your compass.

There are typically 3 ACoS goals sellers go for:

  • Balancing Profit and Revenue
  • Keeping ACoS Ultra Low
  • Raising your ACoS to boost organic ranking

Balancing Profit and Revenue

To truly know if you’re getting the most profit you can, you need to look at the total spend and revenue of your account.

Usually, sellers target between 20 to 30%, which is usually optimal for balancing ad spend a profit. After all the Amazon fees, sales tax, production, COGS and overhead costs, if you’re making 28% profit, then you’ll know you need to spend less than 28% on ads to make a profit. This is the kind of balance an Amazon seller searches for when deciding on a target ACoS.

Keeping ACoS Ultra Low to Increase Profit

Sellers who try to keep their ACoS lower than 10% are usually comfortable with having a smaller account with a higher profit percentage than a larger account with lower profit percentage. This works well for high-volume industries where the seller has an advantage of extremely high revenue per visitor. However, for most sellers, bidding ultra-low with an “average” conversion rate (around 10%) will result in a micro-sized account with a lowered amount of sales than in the first situation we described.

An image inside Seller Central showing an account's low ACoS
Here we see an ultra-low ACoS and very high sales on one of our user’s accounts. Yes, this insane and discovering how to do this doesn’t happen overnight. This user is selling a very popular product with high brand recognition and/or not have that many competitors in his niche.

If you don’t put that much money towards ad spend, then your ads probably won’t be seen and in turn, hurt your revenue. This method sounds good in theory but is applicable to the age-old saying: You have to spend money to make money.

Raising your ACoS to Boost Organic Ranking

With an increase in ad spend, you will be more likely to win bids on keywords and increase traffic to your product pages. Increasing in impressions could potentially increase sales. Acquiring more sales, you can increase ratings and appeal to the Amazon A9 algorithm and increase your organic ranking. Increasing your organic ranking can lead to even more sales and repeat the cycle. Whew! I have dollar signs in my eyes.

However, this theory has yet to be proven–and may never be. Amazon has historically been secretive about how they rank ads and what factors they use to reward the ads they like to see. I have written about this topic in the past and speculated how Amazon ticks. Bottom line: Amazon wants to advertise products that sell, therefore you should focus on conversion rate and doing everything in your power to get those conversions. This includes optimizing product pages, setting a competitive price, etc..

Ad Badger is prioritizing an Organic Boost Correlation tool this year to test the theory that PPC conversion rate is not an organic factor. 

Stay tuned, we’ll be releasing data when we analyze.

GIF of Survivor contestant telling audiences to stay tuned
We want hard data around this debate. If you increase your ACoS, does a corresponding organic revenue boost occur? Does the increased amount of sales coming through on paid cause an increase in organic conversion rate, rankings, and revenue? Thanks for the GIF, GIPHY.

Your Campaign Groupings and Bids Shouldn’t Be The Same After the Holidays

As the times change, so do the behavior of the customers. Your snowglobes that were a hit in December, might not be so hot in January. To catch up on Amazon Sponsored Products, read this previous post.

Update Your Campaign Groupings

Your campaign groupings should be different than they were during the holidays. You may have separated your products because you had different expectations for them. For example, you may have separated your candy cane colored socks apart from your plain white socks because they were more popular during the holidays. Now it’s time to change them back.

It Might Be Time for Lower Bidding

Amazon hit over 3 billion visitors in December, higher than the past six months in 2017. This increase in traffic is obviously due to the holiday season, accompanied by big sales. January will naturally experience less demand and fewer sales than the holiday season, making the keywords less competitive. You might be wasting money if you are bidding the same amount on keywords as you were in December and November.

Your Keywords Probably Need an Update

People likely aren’t shopping for “Decorative Christmas Lights” as much, they’re probably shopping for “Decorative String Lights” instead. While it doesn’t cost you anything to keep holiday terms, people may be in research mode instead of buying mode and click on a lot of products, causing you to pay per click and hurting your conversion rate. They could also be eating up your daily budget while not even converting.

I searched for “Christmas Lights” and this Headline Search Ad came up. This means “Durable and Reliable Lamps for the DIYer” is still holding on to a Christmas keyword. Chances are this is an expensive keyword, yet it doesn’t really have anything to do with their product. They might want to get rid of this keyword and bid on something more relevant. A smart seller would take advantage and update their ad copy with “Save big by buying Christmas lights in the off-season. This isn’t bitcoin, you don’t need to hold on for dear life to keywords.

Be aware of this and when in doubt, monitor your account. Let ACoS and conversion rate be your guide to measuring a successful campaign.

Become a Badger

I’m not talking about the recent podcast by This American Life, I’m talking about taking a walk into the Badger’s Den to see what we’re up to and discuss all things Amazon PPC, Amazon news, pop culture, technology–or whatever you decide to share. It’s a really quick way to meet the Ad Badger team and to learn tips on Amazon PPC strategy.

See you there!

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