Most common Amazon advertising mistakes and how to avoid them
Advertising on Amazon helps your business grow!
Selling on Amazon in 2019 may be the best way to improve your profits for your online business, but regardless of the products you have for sale, smart advertising is a must if you actually want to make money. Advertising on Amazon is not the same as on other platforms and it’s really easy to make very common mistakes that could cost you hundreds or even thousands of pounds or dollars.
We are here to help you avoid those mistakes and help your business thrive so let’s check on them, shall we? First of all, don’t be afraid to spend enough money to make more money. It’s as simple as that. As long as you invest in marketed ads on Amazon, chances are you will boost your sales. So try to establish a monthly budget for your ads, first and foremost.
Keep an eye on your ads
Once your ads are launched, keep a close eye on your conversion rate. Amazon heavily weighs conversion rate probability when determining whether or not you win the bidding auction. To see if a keyword has a good conversion rate or not, find the average conversion rate for keywords in a given ad group. Then, rank your conversion rate against that. Consider pausing a keyword when its conversion rate is much lower than average, as long as the impact on your ad sales isn’t drastically changed. But don’t hurry into replacing an ad that hasn’t yet finished his life cycle just because the conversion rate is not satisfactory after just a few days.
Amazon’s algorithms care about historical data. You are more likely to see results the longer an ad runs and the more data gets collected. Also, Amazon has a three-day attribution window. This means that a click may not be attributed to a sale for up to three days in Amazon’s system. This is why you always want to look at performance over a longer period of time. We recommend you to compare week over week changes and gathering 14 to 30 days of data to make relevant comparisons.
When advertising on Amazon, keyword selection is essential
Keyword selection is the soul of any Amazon ad campaign, and choosing the wrong ones can lead to a variety of issues. For example, if you target keywords in your ads that don’t match what your audience is searching for, your ads won’t show up.
Having bad keywords can lead to wasted time and money. It can also cause clicks on your ads that don’t lead to purchases, hurting your conversion rate. The solution, in this case, would be to just focus solely on keywords that are relevant to your product in a given ad group, have proven to convert for your products, and have more than one match type.
Another mistake sellers make when advertising on Amazon is relying way too much on Automatic Advertising. The point of PPC ads (Pay-Per-Click) is to get you sales while still profiting. In order to do that you will eventually need to be moving to manual campaigns because auto campaigns should only be used for research.
A combination of manual and automatic campaigns will optimize keyword harvesting for sellers’ ads and ensure comprehensive coverage on relevant search queries. Sellers are more likely to discover keywords that are converting, as well as keywords that should be marked as negative by using both types of campaigns – because they are either underperforming or irrelevant to their product and are generating unnecessary PPC costs.
Have a clear ACoS Goal
Our next advice for today is to always keep a clear ACoS goal for your ad campaigns. Advertising cost of sales (ACOS) is the percentage of direct sales you made from Sponsored Products ads or the overall brand sales you made from Sponsored Brands that resulted from your advertising campaign. This is calculated by dividing total ad spend by total sales from advertising.
AC0S = total ad spend / total ad sales x 100
For example, if you spent $5 on advertising and those ads resulted in sales of $50, your ACoS would be 10%.
ACOS helps you measure the effectiveness of your campaigns relative to your advertising spend. A lower ACOS means your spending a lower percentage of sales on advertising. To minimize your spend on advertising, you’ll want to lower your ACoS. If your goal is to increase the exposure of a new or existing ASIN, you might be okay with a higher ACoS for a set period of time. But sellers, please keep in mind to set a goal!
Having an objective in mind should align with the max ad cost per sale you are willing to accept for a given campaign. Your goals will vary based on the stage of the product life cycle. For example, if you’re launching a product, you will likely be willing to take a higher ACoS and potentially lose money. On the other hand, for your bestselling product, you likely want to make money on every single ad sale. Consider your goals and then calculate your required ACoS. For instance, if your goal is profit, and your margin before ad spend is 30%, you’d want your ACoS target to be beneath 30%. This way, you know you’re making money on every single ad sale.
Once you learn to play with Amazon selling rules and strategies, you will certainly improve your sales margin and become more profitable and popular on the world’s leading selling platform. And seeing how complex selling on Amazon is, you will need a little help from Ad-Lister to organize your sale activity better.
You can use Ad-Lister to list your existing inventory on Amazon without too much effort. To see how easy it is to list items on Amazon using Ad-Lister, check out our guide here. Our listing tool also allows you to add keywords and platinum keywords to your listings to help you with advertising on Amazon.