top of page
  • Writer's pictureHeath Thompson

How Do I Reduce My Amazon PPC ACoS? Part 2

Updated: Mar 27

Image by Ralfs Photos


Answer:


Building Campaign Structures that Won't Fight Against Your Goals


Let me begin by presenting you with the following scenarios:


  1. You have an ad campaign with a single keyword (or ASIN) in it

  2. You have an ad campaign with hundreds of keywords in it

  3. You have an ad campaign with 30-50 keywords

  4. You have multiple ad groups in your ad campaign

  5. You have multiple match types in your ad campaign


So, we'll look at the strengths and weaknesses of the above to help direct us to a great ad structure.



You have an ad campaign with a single keyword (or ASIN) in it


The main reason that people create single keyword ad campaigns is for ultimate control.


You have a single keyword to bid manage and you can also control its performance via the campaign budget. Sounds great, right? But I'm less sold on the idea. Having managed accounts with hundreds of single keyword campaigns, I often see that they have a high ACoS. I wondered why this was.


And what I realised is that a single keyword campaign must fend for itself. It lives or dies by its performance.


So, let's say I target the keyword "Silicone Dog Brush for Hairy Dogs". And it now sits alone in its campaign. It has a $1 bid and a $30 per day budget.


After a month or so, there's enough data to begin to bid manage it. Let's say it has had 10 orders at a 55% ACoS. And my target ACoS is 25%. We just lower the bid, right? Maybe.


The problem here is that I make my bid management decision on this keyword alone.


Imagine that I have this keyword in a campaign with nine other keyword targets. The campaign has a 30-day metric of 100 orders at 25% ACoS. Collectively, this campaign is performing exactly to my wishes. But the keyword "Silicone Dog Brush for Hairy Dogs" is performing as above.


The decisions that I make to bid manage this keyword are affected by the success of the other keywords within the campaign. For example, I can afford to give this keyword more time to succeed. I can make incremental bid changes to it over a longer period, than I might if it sat alone.


Wherever it sits, it is still not performing where I need it to be. Now, multiply this problem by a hundred (if you have a hundred single-keyword campaigns), and the issue is more obvious.


I might make a 10% bid reduction in the single-keyword campaign but only a 5% reduction in a campaign with multiple keywords. If I reduce a hundred campaigns by 10%, this could have a serious impact on my organic ranking.


So, should we put hundreds of keywords into a single campaign?



You have an ad campaign with 30 / 50 / 100s of keywords in it.


There are several clear problems with having too many keywords in an ad campaign.


Firstly, the ad budget is being split across too many keywords. There will likely be a small number of keywords that are eating the lion's share of the ad budget. This means that the remaining keywords are suffering because they never see enough cash.


We are making bid management decisions on keywords that can't perform effectively if they don't get enough money. This means that we are making decisions that are formed on partial information because their performance could be completely different if they had a bigger slice of the pie.


Secondly, when there are lots of keywords in a campaign we are giving unnecessary power to the algorithm which has too many choices to activate an ad. A hundred clicks over three keywords is easier to manage, than a hundred clicks over one hundred keywords.


Too many keyword targets will likely lead to a high ACoS, poor bid management decisions, and not making the most of the keywords that you are targeting.


The burning question is, how many keywords should I target in an ad campaign?


Answer - 3 to 8, and if possible, keywords that are closely related.


Family keywords that are similar to each other are likely to support one another via their performance. If one keyword has a bad month, then maybe another has a good month, and as they are very similar, the impact on organic rank is reduced. And when they all perform well for similar search terms, they can lift each other's organic rank systemically.




You have multiple ad groups in a campaign, and/or multiple match types


The ideal structure is to have one ad group per ad campaign, otherwise, you will at some point likely face a situation where one or more ad groups perform poorly and others perform well. Whatever changes you make to the ad campaign budget will affect each of the ad groups within it - so you therefore lose an aspect of control because you cannot determine which ad group will receive the ad budget cash.


With a single ad group, the campaign budget gives you a top-of-funnel adjustment to increase or decrease ad spend based on contribution.


Similarly, ad groups with multiple match types in them can be problematic. By match type, I mean Broad, Phrase, and Exact. Ideally, you want to keep them separate.


Therefore, a campaign with a single ad group targeting a single match type gives you greater control of your ad spend and how you can direct it.


As Broad, Phrase, and Exact keywords activate ads based partly on the algorithm's ability to read a buyer's intent to purchase, it makes sense to isolate the match types to target specific audience intent.



There's quite a lot to chew over here. It's important stuff. How you construct your ads can work for you or against you.


If you need more help, I have here a FREE Beginners PPC Course



Need help running your campaigns?


If you can't stand the stress of managing them anymore, or you simply wish you could get on and focus on what you love about your Amazon work, feel free to get in touch at heath AT amazonalchemist.com. I might be able to help.


If you want to do things yourself but need to understand PPC more then I have a number of courses available:  CLICK HERE it will open in a new tab - then click the course image that interests you for a free lesson and further details.


Tags - Amazon PPC Reducing ACoS - Amazon PPC Management - Amazon PPC Strategy - Amazon PPC Tutorial -








13 views0 comments

Recent Posts

See All

Comments

Rated 0 out of 5 stars.
No ratings yet

Add a rating
bottom of page