Ever felt like you're pouring money into online ads but not seeing the returns you expected? You're not alone if you have! In the world of Amazon pay-per-click (PPC) and online advertising, it's alarmingly common to watch your hard-earned dollars vanish into the ether with little to show.
Online advertising is a crucial component of a business's marketing strategy. Without proper management, however, advertising budgets can spiral out of control and lead to significant wasted ad spend. In 2023, digital ad spend wastage hit a record high of $6 billion, illustrating businesses' significant challenge in optimizing their online advertising strategies. This article outlines practical strategies to control waste in ad spending in online advertising campaigns, particularly when it comes to Amazon PPC advertising.
Understanding Wasted Ad Spend
Wasted ad spend refers to the portion of an advertising budget that does not contribute to campaign goals such as generating sales, increasing leads, or boosting brand awareness. This can occur due to poor targeting, ineffective ad copy, or bidding on irrelevant keywords, among other factors. Let’s explore some of these factors in detail.
Adding Negative Keywords
One of the most effective ways of rescuing wasted ad spend is by adding negative keywords, which let you exclude unwanted search terms from your campaign. The process involves identifying search terms that generate high impressions but low clicks, or good clicks but no sales. These search terms can drain your ad budget without contributing to your business goals. The process of effectively adding negative keywords includes:
Analyzing Campaigns: Regularly review your automatic and manual ad campaigns. Use the advertising report dashboard in your Amazon Advertising Account to analyze the last 30-60 days of search term reports.
Identifying Negative Keywords: Look for search terms with high impressions but no clicks or sales.
Optimizing Targeting: Find duplicate search terms across different targeting options (phrase match, broad match, and exact match) and keep only the most effective ones.
Calculating and Optimizing Target ACoS
The Advertising Cost of Sale (ACoS) is a critical metric in Amazon PPC campaigns. It represents the ratio of ad spend to targeted sales. For instance, consider a scenario where you invest $50 in an advertising campaign and generate $100 in revenue. In this case, your Amazon ACoS would be calculated as 50%. The steps necessary to calculate and optimize target ACoS include:
Determining Target ACoS: Calculate the target ACoS for each campaign based on your business objectives.
Comparing ACoS: Check if the current ACoS is above or below this target at both the campaign and keyword levels.
Adjusting Bids: If the ACoS exceeds your target, lower your bids on those keywords or pause the ads to bring the ACoS down.
Pausing Bleeder Campaigns: Identify and pause campaigns not generating an adequate return on investment (ROI).
Avoiding Broad-Match Keywords
Broad-match keywords can lead to your ads being shown for irrelevant searches, thus wasting your ad budget. The strategy to avoid broad-match keywords efficiently involves:
Using Negative Keywords: Implement negative keywords to prevent your ads from appearing in irrelevant searches.
Opting for Specific Targeting: Opt for more specific keyword matches to ensure better relevance and efficiency.
Utilizing Dayparting in Amazon PPC Campaigns
Dayparting involves adjusting your ad spend based on the time of day to align with customer buying behaviors. The approach to implementing dayparting in Amazon PPC campaigns involves:
Budget Adjustment: Decrease your ad spend during low-sales periods and increase it during high-converting hours.
Data Analysis: Regularly analyze your sales data to identify high and low-conversion periods.
Managing Auto Campaigns and Competitor Targeting
Auto campaigns on Amazon can be optimized by incorporating negative keywords and removing non-converting competitor Amazon Standard Identification Numbers (ASINs). Here’s how you can manage auto campaigns and competitor targeting effectively:
Negative Keywords in Auto Campaigns: Add negative exact keywords for non-converting competitor search terms and negative phrase keywords for broad, irrelevant terms.
Competitor ASIN Management: Regularly review and remove non-converting competitor ASINs from your campaigns.
Reassess Negative Keywords: After 30-60 days, review the performance of keywords previously marked as negative and consider retesting them.
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