Campaign management is vital for any PPC campaign, it can, however, be a very time-consuming activity. Keywords need to be tracked and optimised at regular intervals to ensure campaigns are performing well while tweaking those that don’t seem to be reaching their potential.
Bid optimisation is a factor with a strong impact on the success of the campaign. Your Advertising Cost of Sales (ACoS) will slowly rise if you are not managing keywords. This will result in losing ad space and, in turn, sales to competitors.
For all your Ad Groups, you’ll need to create keyword bid rules to cover your campaign needs. There are 3 rules which are important to follow here. These are:
1. Pause keyword – when the keyword is unprofitable.
2. Decrease the keyword bid – when the ACoS is high.
3. Increase the keyword bid – when the ACoS is low
Establishing your target ACoS
The first thing we have to establish is a target ACoS. To calculate this you will need to establish your break-even ACoS – this is simply your profit margin percentage. If your profit margin is 35% and your target profit margin is 15%, your Target ACoS would be 20%. This is what you’ll be aiming to optimise your campaigns for.
For example, let’s say that you were selling a luxury pen for £10.00. Your profit for every pen sold is £3.50 and you are willing to take £1.50 profit if you factor the cost of adverting. This, then, leaves you with £2.00 which would be your ACoS of 20%.
1. When To Pause a Keyword
If a keyword has not generated any sales after X clicks, the keyword should be paused.
In order to establish the number of clicks generated without a sale, you need to look at how many clicks, on average, there are per sale. Here is an example:
Number of clicks = 100 ÷ organic conversion rate (CR %) of your product
Number of clicks = 100 ÷ 5
Number of clicks = 20.
With an organic conversion rate of 5%, you should be stopping keywords without sales at about 20 Clicks.
2. When To Decrease Keyword Bid
The rule here is: If ACoS > target ACoS after X clicks, lower the bid by 30%
Using our previous example, where the target ACoS is 20%, we need to optimise our campaigns to meet that 20% for optimum results. If the ACoS is higher than 20%, we need to adjust the bid as this will be cutting into your profit margin.
25% is a good rule of thumb, to begin with as it will allow you to see the impact the changes you make in bidding, have on the ACoS and on your sales.
3. When To Increase A Keyword Bid
The rule is: If ACoS< target ACoS (20%) after 20 clicks, increase bid by 30%.
If your ACoS is below your target ACoS, you should increase your CPC bid. This will ensure that you have increased ad visibility and therefore, increased sales potential.
Establishing the right balance to achieve optimum results is difficult and will take some trial and error. If you would like to ensure that you are getting the most out of your Amazon PPC campaign, why not leave it up to the pros? At Rt7 Digital, we manage and maintain a range of client’s Amazon paid campaigns and organic listings.
If you would like to get in touch with us, you can give us a call on 087 151 4637, email us on firstname.lastname@example.org or chat with us on live chat.