Are You Wasting Your Amazon Ad Spend?

In the last quarter of 2017, online shoppers spent $103 million on Amazon. And that spend is increasing year on year. It’s no wonder Jeff Bezos is worth an estimated $157 billion, although that figure will probably fall in the wake of his divorce.

A quick glance at these figures indicates how powerful the Amazon marketplace is for e-commerce businesses. The massive global reach of Amazon allows small sellers to attract customers from all over the world. And thanks to seamless fulfillment programs, you don’t even need a big warehouse to store your products or worry about global shipping logistics.

However, the global nature of Amazon’s marketplace means it is hyper-competitive. This makes it very hard for smaller sellers to compete against the big brands. One way to level the playing field without slashing your profit margins to the bone is to implement an Amazon Ad campaign.

Amazon sponsored ads make it easier for smaller brands to place their products in front of customers. You can spend as much or as little as you want, so you stay in control at all times. But despite the level of control businesses have when they implement an ad campaign, it is very easy to waste money.

PPC agencies are extremely efficient at helping clients to maximize their Amazon ad spend, but it is important to recognize when your money is being wasted.

Work Out the ACoS

Firstly, work out your advertising cost of sale (ACoS).

Total Ads Spend ÷ Total sales x 100 = advertising cost of sale.
So, if you spent $40 of ads and you gained $80 in sales, the calculation would be: 40/80 x 100 = 50%.

Your aim is to reduce the ACoS as much as possible. A successful advertising campaign is one where your sales far exceed your ad expenditure. This leaves more money on the table so you can continue pumping it into advertising. For this reason, it is very important that you do the math before you begin an Amazon ad campaign.

Keep a close eye on your ACoS. If it is too high, then you are wasting your money. It’s normal for an ACoS to be higher in the first couple of weeks. Try not to panic, but monitor the situation closely. Unless you see clear signs that your ACoS is slowly falling, it’s time to tweak your Amazon advertising campaign.

Check Your Search Terms

Many inexperienced Amazon sellers waste time and money targeting generic search terms. This won’t yield you any success whatsoever, and worse still, you will end up spending more on a less successful ad campaign.

Be specific with your search terms. For example, if you are selling dog food, targeting ‘dog food’ is much too general. You need to drill down and use keywords that describe your product more accurately; for example, ‘dried dog food senior dogs’ or ‘wet puppy food pouches’. The more specific you are, the more likely it is that your traffic comes from shoppers searching for your specific product. This increases the likelihood they will buy what you are selling.

Optimize Your Listings

It is pointless spending money on an Amazon ad campaign if shoppers are turned off when they click on your listing. Optimize your listings so that they are compelling and attractive. Add high-quality new photos that show the product from every angle. Improve the text descriptions and optimize listing titles. Include keywords in text descriptions, but ensure they appear naturally. Make use of the bullet points to list your product’s key features.

Lastly, continue to refine your Amazon ad campaign. Check search terms as you go and remove the ones that don’t yield sales.