Are You Overspending on Amazon Ads?

Written by: Ryan Flannagan
Home 9 Nuanced Thoughts 9 Are You Overspending on Amazon Ads?

There are various ways to promote your products on Amazon effectively: acquiring positive reviews, keyword implementation, product description optimization, and the list goes on and on. However, when it comes to instant results, nothing else matches up to Amazon ads.

As soon as Amazon ad campaigns are launched, they are seen by customers and generate clicks – and there’s no waiting around for your Amazon SEO efforts to pay off. Immediately, your products are being seen and hopefully generating conversions.

There’s just one issue though: it can be all too easy to get it wrong with your advertising efforts. If this happens, not only will your ads be ineffective in producing sales, but it will also cause you to overspend on ads – and the last thing you want to do is throw your precious marketing funds away needlessly.

To help you prevent any of the above from happening, this guide will answer this burning question: Are you overspending on Amazon ads? 

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Setting a Budget

You know the budget options, yet the important point is the actual budget you set for your Amazon PPC campaigns. It goes without saying that the main goal is to achieve a profitable campaign. If you manage to accomplish this, selling products and making money despite your ad expenditure – run with it. You want to avoid capping your budget as it could lead to a loss in potential sales.

However, if your campaign is unprofitable, this is a clear sign that tweaks need to be made – but the solution isn’t necessarily just dropping your budget, either. You will want to analyze aspects like keyword targeting, ad placements, negative keywords, and PPC campaign structuring.

Ultimately, you’re searching for that perfect return on investment balance, so you don’t want to spend too much on your ads; otherwise, this will negatively influence your ROI. Instead, you need to strike a balance where you spend enough to generate leads but only pay enough before it ventures into overspending territory.

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    Budget Options

    Firstly, it’s important to analyze the budget options available for Amazon PPC campaigns. Below are the two choices to pick from:

    Positive Reviews

    Fixed Daily Account Budget

    This choice is ideal if you have a set budget in mind. Say you want to spend $100 on a sponsored products campaign. Once you have hit that limit of $100 for the day, the campaign will stop running and only start again the next day.

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    Average Daily Budget

    As the name suggests, this is the daily budget you’re willing to spend. Unlike the former option, the budget amount you set is for each ad campaign. Plus, you’ll also plan this over a set period of time, and the budget spent each day can vary.

    Build Your Ad Campaign Wisely

    If you put together an ad campaign on the fly, it’s unlikely to yield optimum results – and this means wasted dollars. Overall, there are various routes to take with an Amazon PPC campaign, and it’s up to you to put in the necessary research to decide which one is best for your cause.

    For Amazon sponsored products, there are two main campaign types available: Automatic Targeting and Manual Targeting. Confused? No worries, here’s a rundown of each:

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      Automatic Targeting

      An automatic campaign, as the name suggests, doesn’t involve much work on your part – in fact, Amazon does most of the heavy lifting. They look at the products you want to advertise and via their listing, identify the keywords used in the title, bullet points, description, etc. With these keywords, Amazon decides where and when to advertise your product ad on their website.

      This approach is particularly advantageous for beginners that want to get up and running straight away and haven’t done any keyword research. However, the lack of control can be troublesome when attempting to maximize your ad budget.

      While you can manage the amount you spend for the campaign, there is no control over your ad bids. The result: your bids will be spread out evenly across high converting, low converting, and even negative keywords – a collective that can potentially lead to wasted ad spend, causing causes your ACoS (Advertising Cost of Sale) to rise.

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      Manual Targeting

      On the other hand, manual campaigns supply you with a larger degree of control. You can select the keywords you want to target and the bid rates for each one. While this method involves more work, and you have to rely on your own research rather than Amazon’s, Manual Targeting is generally the path to take when maximizing your ad spend.

      When setting up a manual campaign, you have to create an ad group that incorporates your keyword match type of choice. In total, there are three match types for your keywords: broad match, exact match, and phrase match. With these options, you are given some degree of control in terms of what keywords to target; broad matches, for instance, will target a range of relevant search terms based on your inputted keyword.

      Another advantage for sponsored brands opting for Manual Targeting is that they can constantly react to trend changes. They can spot keywords that are rising in importance, select them while the cost per click (CPC) is low, and profit from enhanced visibility due to the trend shift.

      Optimize Your Product Listing

      With the above point in mind, it’s essential your product listing is optimized before you run an ad campaign. This is especially the case when using Automatic Targeting, as you want Amazon to focus on the correct keywords for the product you wish to promote.

      It’s also imperative for landing conversions; even if a shopper clicks on your ad, there’s still a lot of heavy lifting required to convince them to buy. As such, you need to make sure your listing is descriptive, visual, and creates an emotional connection with prospective customers.

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        Learn From the Experts

        You can go into Amazon’s Seller Central and view the stats. You can tweak and test. You can try everything from traditional ads to video ads. Yet, to truly learn if your Amazon ads are performing – and you’re not overspending – it is wise to receive assistance from the experts, which is where working with an Amazon consultant is recommended.

        With an Amazon consultant in your corner, they will be able to evaluate your campaigns, see what’s performing well, what’s letting the side down, and put together a strategy that optimizes your ad spend.

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          Ryan Flannagan

          Ryan Flannagan

          Ryan Flannagan is the Founder & CEO of Nuanced Media, an international eCommerce marketing agency specializing in Amazon. Nuanced has sold $100s of Millions online and Ryan has built a client base representing a total revenue of over 1.5 billion dollars. Ryan is a published author and has been quoted by a number of media sources such as BuzzFeed, CNBC, and Modern Retail.

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