Amazon has always been focused on growth, and they take opportunities everywhere they can. This means that you, as a seller, should be riding that wave alongside them. They have the advantage of big data, which means they will always steer toward customers and revenues. In short, because Amazon is pushing hard for advertising, it’s a sure sign that your Amazon advertising needs to be scaled.
In the Amazon universe, expansion feeds growth, and the bigger you are, the easier it is to obtain more customers and sales. As you advance through the rankings, you may even pose a real threat to the top competitors in your category.
The majority of businesses tailor their advertising methods to the Amazon customer. There are a lot of them, and more are being added all the time, so it’s a solid start. However, putting sponsored advertising on the platform is no longer the only option, and honestly, it is no longer sufficient. The level of competition on Amazon, as well as the rate at which it is growing, necessitates a more effective strategy for sellers who want to rise to the top and stay there.
Have some excess ad spend burning a hole in your wallet and aren’t sure what to do with it? Not to worry, we’re here to show you how to expand your Amazon PPC account regardless of the health of your Amazon campaigns. There are numerous scaling options available, and the one you should choose depends on the success of your efforts.
However, before reworking any of your processes, brands and sellers must first examine their current strategies and product performance in order to develop clear, targeted goals guided by deep data insights.
Ask the Right Questions
Before you begin, determine your current advertising goals and where you want your company to be in a few years by asking yourself the following questions
- What do you think increasing your Amazon advertising will do for your company? (increased revenue, first-place organic ranking, brand recognition…)
- What are your ACoS, RoAS, daily spend, and profit margins for the products you promote?
- What is your organic traffic to paid traffic ratio?
- How much time are you now investing in advertising, and how much more time of yours are you willing to invest?
- Are you familiar enough with Amazon Advertising to spearhead growth? Are you willing to hire someone who is if you aren’t?
- What is the state of your current campaigns? Are there any goods you should add or campaigns you should pause, reevaluate, or discontinue?
- Are your existing campaigns succeeding? What areas require attention? Do you require the services of a professional to review your ad account?
After answering these questions, you should be able to determine whether you are ready to scale your Amazon advertising.
Determining your ACoS
ACoS (Advertising Cost of Sale) is a ratio of total ad spend to targeted sales. The formula to calculate it is as follows:
ACoS = Ad Spend ÷ Ad Revenue * 100
Let’s also go over some general guidelines for ACoS in terms of sales and exposure:
The greater the ACoS, the greater the exposure.
The larger the sales, the lower the ACoS.
If you want to market your product, you must raise your ACoS target in accordance with these two principles. This boosts your ad spend budget, allowing Amazon to show your advertisements to a larger number of potential purchasers.
To be clear, decreasing the ACoS target does not ensure increased conversions and revenues. However, selecting a low ACoS target might still assist your campaign because it keeps you from overspending on ads and beyond your break-even point.
How to Scale Campaigns to Match or Exceed Your Target ACOS
Give yourself a pat on the back if your campaigns are equal to or better than your goal Amazon ACOS. It’s difficult to get your ad spend exactly where you want it, if not better. You’re in an excellent position to scale because campaigns at or below your goal ACOS are by far the most easily scaled. If you wanted to, you could scale it up by adding an extra zero to your ad spend.
Examine your budget carefully. Campaigns at or below your goal ACOS should never be budget-restricted unless there is a very strong reason, such as very limited inventory or supply chain constraints.
Examine your Search Term data for Sponsored Products and Sponsored Brands as well. These should inform you of your search term impression rank and whether you can enhance it by bidding more aggressively.
As you scale these initiatives, you should also be optimizing your bids. Just because they’re doing well doesn’t imply you can spend your extra advertising dollars everywhere. If you’re not attentive, your campaigns may conceal some keywords that are worse than your goal ACOS and may run away with your ad expenditure. Keep an eye on such keywords and be prepared to lower your bids if required.
When it comes to growing your campaign budget, if the campaign is performing effectively, you can do so quickly. If everything goes perfectly, you can spread the ramp-up out over a week, increasing the budget by 25% at a time. In any case, while ramping up your campaign spend, slower is preferable. Increasing your budget by a factor of two overnight can result in runaway ACOS.
The final step is to keep doing additional keyword research and graduating your search terms. Don’t forget about product targeting at the same time. Many Amazon sellers focus simply on keywords and search terms, but you also want to take on winning products. This is where auto-targeting can help.
How to Scale Campaigns That Perform Worse Than Your Target ACOS
Scaling is a lot more difficult with these campaigns. With these campaigns, just increasing your budget without any prior campaign preparation will result in an increase in ACOS.
Control is the most critical characteristic of scaling in this context. You definitely need to use bid optimization to keep the ACOS in check. Don’t completely pause your high-ACOS keywords because chances are they’re still generating orders and your bids are simply greater than the keyword’s value. Multiplying your revenue per click (RPC) by your goal ACOS is a useful technique to determine what a good bid is for your keyword. Bidding down is the key to unlocking the profit potential of many of your keywords.
Continue to optimize your bids and look for low-order frequency keywords that are receiving more ad spend than they are worth. At the same time, you may scale by targeting small long-tail keywords and bidding on them appropriately. Over the course of several months of bid optimization and locating long-tail keywords, you may discover that you’ve reduced your ACOS while also doubling your ad spend.
However, every once in a while, you can unintentionally find yourself sitting on a one-in-a-million term. Some keywords have a high ACOS not because of an excessive ad spend, but because they lack the ad expenditure to secure the positions that allow them to shine.
If you suspect that one of these keywords is lurking in your underperforming campaign, consider gradually increasing the bid on it to see what changes. Keep in mind that this is not something you should do in bulk, and it is not something you should do early in your quest to optimize and scale your campaign.
While all of this is beneficial to your efforts, you may be shocked to learn that the best thing you can do to assist scale your above-target-ACOS campaigns has nothing to do with them at all.
Effective Strategies to Scale your Campaigns as a whole
Product Page Enhancements
Examine your Amazon product pages quickly. How do they appear now? Are they optimally optimized? If your campaigns aren’t doing as well as you’d planned, it may be time to revamp your product pages.
Price variations should be tested on your product pages. Check to see if you get more or fewer orders at different pricing points, then choose the one that gives you the most bang for your dollars.
Make certain that your product images are of excellent quality and professional. Lifestyle photographs of your ideal consumer using your product are a great addition to your listings. Make sure to mention measurements as well.
If a picture is worth a thousand words, then a video is worth a million. A video on your product page can convey a lot of information to customers while also increasing your reputation.
Finally, develop an Amazon review strategy for your product pages, and if you already have one, check it to see if it can be enhanced. Positive feedback on your products can assist boost your sales. Make careful to double-check your star ratings. If the bulk of your products have an average rating of 3.5 stars, it’s possible that scaling your campaigns isn’t the best time.
Streamline Your Fulfillment Procedure
Aside from reviewing product performance, it is critical to examine your present fulfillment method to verify that it can support your business as it grows. Several aspects must be considered, ranging from expanding operational needs to the product categories you sell in.
If you haven’t already, you should consider using Fulfillment by Amazon (FBA) as your primary fulfillment method as your business grows. FBA simplifies the process by having merchants submit their products to Amazon fulfillment centers, which handle the packing and delivery of things when client orders arrive.
If you maintain high-performing metrics with FBA, you will be able to showcase products in front of high-value customers by becoming Prime eligible. Having the ability to contact Prime members is a major growth opportunity that will help you scale even faster.
Creating New Amazon Campaigns to scale your Business
Creating new campaigns may be the simplest approach to increasing your Amazon account. Of course, we’re not advocating a start-from-scratch strategy; there’s plenty of raw potential in your old ads as well.
Good news: just as when you shop on Amazon, there are a plethora of new methods to spend your money in Amazon Advertising. If you have extra ad spend, consider dabbling in Sponsored Brands and Sponsored Display if you haven’t already. Then, choose your top keywords and place them in those new ad types, and your account will increase by 20% to 30% straight away.
Breaking into new targeting types is another approach to scale your Amazon account with new ads. The first to consider is brand defense. Never be scared to bid on your own brand in Sponsored Products or to use it as a targeting type in Sponsored Brands or Sponsored Display. Your competitors are most likely already bidding on it, so brand defense is an excellent method to keep them from taking their shot.
There are numerous additional techniques to flesh out your new ads, such as using reverse ASIN to uncover new keywords, cross-selling comparable products, integrating strategies across different ad kinds, and more. The options are limitless!
Conclusion
Scaling your business on Amazon is a difficult undertaking, and how you go about it is heavily dependent on the health of your campaigns.
If your campaigns are at or over your goal ACOS, scaling your account will be significantly easier. Raising your budget caps will give these initiatives more room to expand unless you have compelling reasons to retain them where they are. Keep an eye out for high-ACOS keywords and gradually increase your budget to ensure that nothing goes wrong.
Slow down your scaling for campaigns that have a lower ACOS than your aim. Maintain your emphasis on optimizing your bids and scaling by gradually introducing long-tail keywords over time. Another technique to ensure that your campaigns are scalable is to look at your product pages and see if you can improve your pricing strategy or the content of your product listings.
Creating new campaigns, experimenting with new ad types, targeting types, or both is the simplest method to increase your Amazon Advertising account. It’s a quick way to expand your account while reaching out to customers in new ways and making the most of the Advertising console’s features.
