How do you set up a successful sponsored product campaign?
Many tutorials on the Internet recommend that you set up manual campaigns targeting a few keywords that fit your product. That's good practice, but we only recommend expert sellers, who have a thorough knowledge of their market and lots of experience launching new products, to go that route.
Moreover, a manual launch 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 have to have worked in the search marketing industry for decades to adjust your bids.
Below is the simple blueprint we use successfully with our clients.
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 targets keywords and products similar to the product in your ad. The m19 technology also uses these automated campaigns in its algorithms, as a source for keyword generation.
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 of Amazon Sponsored Product 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, yet detailed enough to manage product-level performance. Since you're launching new products, you shouldn't have hundreds or thousands of ASINs. So it's good practice to create one ad group per ASIN. It provides a good balance between bidding on keywords specific to each product and mutualizing keyword data. Your campaign structure will be quickly implemented and easy to maintain. And you'll make better decisions.
For sellers launching products with multiple variations (size and color in fashion, for example), just create one ad group per parent ASIN. You then get a campaign structure that remains manageable but granular enough to get good results.
How much should you offer 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. A knowledgeable seller with a thorough knowledge of their market and lots of experience launching new products would probably adjust their bids manually. BUT we have seen that automation produces good results at scale and saves tons of time. Therefore, we recommend starting with the bids that Amazon suggests for each targeting.
After reading these comments, you should have launched your Sponsored Product campaign, with one ad group per product. We hope you are using the automatic targeting and bids suggested by Amazon.
Read the next section to learn how to adjust your bids after launch.
Daily bid management in 5 minutes
How do you adjust the bids?
We recommend 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 do not enjoy 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, do you have ad sales! That's great. It's 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 profit 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 your traffic.
Your actual ACOS is below your profit expectations. Man, you are a king! But you need to increase your bids to get more traction. You're probably under-investing.
Your ad sales are smaller 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 advertising sales, don't worry.
It takes time to start a new product. Also consider additional means, such as increasing the number of reviews you get from organic sales. The next question for you: are your daily expenses above the budget you had in mind?
Your daily expenses are above your planned budget. It's time to start lowering your bids. A word of warning: if you stay in this situation for several weeks, you're probably not spending enough budget on your launch. Consider adjusting your launch strategy.
Your spending is below your planned budget. Next, check the number of impressions you're getting from your ads. Are you getting enough impressions? This is a more difficult question because the threshold is specific to each vendor. Compare your numbers to existing products. To give you an idea: with a 0.1% click-through rate and a 2% conversion rate, you need 50,000 impressions for a 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 not related to advertising. Lower your bids and try to understand what affects your conversion rate. Check your availability, check your price competition, check your detail page content, check your reviews.
Bid adjustments in a chart (for those who don't like to read)
How often should you refresh the bids ?
In the beginning you should do it every day. After a week or two, and if your performance was good enough in the past few days, you can delay the adjustments. Check your results every two or three days and adjust the bids accordingly.
How much should you increase or decrease bids ?
First of all, you should make bid adjustments gradually. You really want to avoid big swings that destroy the work you've already done. Don't forget that your auto campaigns also build an asset: the list of keywords and product pages that drive conversions to your products. This data will come in handy for you 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 you spent $30 yesterday and your daily budget is about $10. You want to lower your bids. You have spent three times more (3x) than what you planned to spend. I recommend that you lower (divide) your bids by a factor of 3x. If you bid $1, lower your bid to $0.33 ($1 / 3 = $0.33). Be careful, that's a big swing. All things being equal, you should still be close to your planned budget.
Your spending is greater than the amount of ad sales you get. Let's assume you spent $25 and got $10 in ad sales. You spend two times and a half more (2.5x) than what you get in terms of ad sales. The same logic, you can divide your bids by 2.5, to try to achieve an actual ACOS of 100%. If you bid $1.5, you can adjust your bid to $0.6. Again, that's a big swing. If you can bear the cost, it is better to lower your bids gradually. Go down to $1 for one or two days and see what the results are before you decide to bid $0.6.
Your actual ACOS is above your earnings expectations. Let's assume your actual ACOS is 90% and your profit expectations are about 45%. You want to lower your bids. In this example, your actual ACOS is twice as large (2x) as your expected profit. So when you lower your bids, you don't want to go below half the current value. I recommend you lower your bids (divide) by a factor of 1.5x. If you bid $0.75, adjust to $0.5.
