How do you set up a successful sponsored product campaign?
Many tutorials on the internet recommend setting up manual campaigns targeting a few keywords that match your product. This is good practice, but we only advise expert sellers who have a thorough knowledge of their market and extensive experience in launching new products to take this route.
Furthermore, a manual setup requires thorough keyword-level analysis, market expertise, and surgical bid management. This manual launch can be much more time-consuming than what we describe in this post.
Our method proved easy to implement. It takes less than five minutes to set up. It works for most categories on Amazon. And you don't need to have worked in the search marketing industry for decades to adjust your bids.
Below you will find the simple blueprint that we use successfully with our customers.
Set up your PPC campaign in 5 minutes
What type of PPC campaign should you use?
Without a doubt, you should go for Sponsored Products campaigns with automatic targeting. Automatic targeting is great because you benefit from Amazon's market expertise. These guys have done the research for you, and their automated logic focuses on keywords and products that are similar to the product in your ad. The m19 technology also uses these automatic campaigns in its algorithms as a source for generating keywords.
And these campaigns have proven to have a great time/efficiency ratio.
Which bidding strategy?
We recommend using "Dynamic bidding – down only," which is the default setting for Amazon Sponsored Products campaigns. You limit your maximum bid, which makes sense in a general second-price auction market. It minimizes your risk of overspending.
What is the best campaign structure?
We recommend keeping things simple, but still detailed enough to manage performance at the product level. Since you are launching new products, you should not have hundreds or thousands of ASINs. It is therefore good practice to create one ad group per ASIN. This provides a good balance between bidding on keywords specific to each product and mutualizing search term data. Your campaign structure will be implemented quickly and is easy to maintain. And you will make better decisions.
For sellers who launch products with multiple variations (size and color in fashion, for example), simply create one ad group per parent ASIN. This will give you a campaign structure that remains manageable but is granular enough to achieve good results.
How much should you bid at launch?
Again, we offer a blueprint for people launching a new business or product. They are looking for efficiency and tend to minimize their financial risks. An expert seller with a thorough knowledge of their market and extensive experience in launching new products would probably adjust their bids manually. BUT we have seen that automation delivers good results at scale and saves tons of time. That's why we recommend starting with the bids that Amazon suggests for each targeting.
After reading these comments, you should have launched your Sponsored Products campaign, with one ad group per product. We hope you are using automatic targeting and Amazon's suggested bids.
Read the next section to learn how to adjust your bids after launch.
Daily bid management in 5 minutes
How do you adjust bids?
We recommend that you go through this routine for each of your products. It may seem a little cumbersome the first time you read it. But once you've done it twice, you'll probably find it easy and logical!
For those who don't like reading, we have created a chart at the end of this chapter that summarizes everything.
First question for you: do you have ad sales?
YES, you have ad sales! That's great. Things are starting to pick up. Now, is the amount of your ad sales greater than your expenses?
If so, again, that's cool. You'll get there. Check how far your actual ACOS is from the level of profitability you expect from your products. Keep in mind that you are launching new products, so your profits will be lower than what you get from mature products.
Your actual ACOS is above your profit expectations (90% vs. 50%, for example). You may want to lower your bids. Be careful, do it gradually. You don't want to cut into your traffic.
Your actual ACOS is below your profit expectations. Man, you're a king! But you need to increase your bids to gain more traction. You're probably underinvesting.
Your ad sales are less than your expenses. You may want to consider lowering your bids. It really depends on how far you are from 100% ACOS. Keep in mind that at launch, it makes sense to invest more than your ad sales to support your products.
If you didn't get any advertising sales, don't worry.
It takes time to launch a new product. Also consider additional resources, such as increasing the number of reviews you receive from organic sales. The next question for you: are your daily expenses above the budget you had in mind?
Your daily spending is above your planned budget. It's time to start lowering your bids. A word of caution: if you remain in this situation for several weeks, you are probably not spending enough of your budget on your launch. Consider adjusting your launch strategy.
Your spending is below your planned budget. Next, check the number of impressions you are getting from your ads. Are you getting enough impressions? This is a more difficult question, because the threshold is specific to each seller. Compare your numbers with existing products. To give you an idea: with a click-through rate of 0.1% and a conversion rate of 2%, you need 50,000 impressions for one conversion.
If you're not getting enough impressions, it's time to increase your bids. You need to generate more traffic to get your first conversions.
If you are getting a lot of impressions, you probably have a conversion problem that is not related to advertising. Lower your bids and try to understand what is affecting your conversion rate. Check your availability, check your price competition, check the content of your detail page, check your reviews.
Bid adjustments in a graph (for those who don't like reading)
How often should you refresh your bids?
In the beginning, you should do this every day. After a week or two, and if your performance has been good enough in recent days, you can postpone the adjustments. Check your results every two to three days and adjust your bids accordingly.
How much should you increase or decrease your bids?
First and foremost, you should make bid adjustments gradually. You want to avoid really big fluctuations that undo the work you've already done. Don't forget that your auto campaigns also build up an asset: the list of keywords and product pages that drive conversion to your products. This data will come in handy in the future.
When it comes to bid adjustments, the rule of thumb is to adjust your bids up or down in proportion to your goal. Let's go through a few examples.
Your spending is above your planned budget. Let's assume that you spent $30 yesterday and that your daily budget is approximately $10. You want to lower your bids. You have spent three times (3x) more than you planned to spend. I recommend that you lower your bids (divide them) by a factor of 3x. If you were bidding $1, lower your bid to $0.33 ($1 / 3 = $0.33). Be careful, that's a big swing. If everything else stays the same, you should still be close to your planned budget.
Your expenses exceed the amount of advertising sales you receive. Let's assume you spent $25 and received $10 in ad sales. You are spending two and a half times (2.5x) more than what you are getting in terms of ad sales. Using the same logic, you can divide your bids by 2.5 to try to achieve a true ACOS of 100%. If you were bidding $1.50, you could adjust your bid to $0.60. Again, that's a big swing. If you can bear the cost, it's better to gradually lower your bids. Go down to $1 for a day or two and see what the results are before you decide to bid $0.60.
Your actual ACOS is above your profit expectations. Let's assume that your actual ACOS is 90% and your profit expectation is around 45%. You want to lower your bids. In this example, your actual ACOS is twice (2x) as high as your expected profit. When you lower your bids, you don't want to go below half of the current value. I recommend lowering (dividing) your bids by a factor of 1.5x. If you were bidding $0.75, adjust to $0.5.
