Why You Should Be Conducting Self-Audits
Have you ever looked at your ad campaigns in Seller Central and scratched your head a little? Even the most experienced Amazon advertisers find themselves in this position.
Regardless of if your campaigns are performing well or not, staying on top of what exactly is happening with your ads is imperative for finding success and maintaining it. And what better way to learn exactly what’s going on than conducting a self-audit!
We’re here to walk you through your Amazon PPC audit, step-by-step!
Step #1: Taking the Temperature
The most important part of taking the temperature of your account is looking at your KPIs (Key Performance Indicators) to gauge your Amazon PPC performance.
Every account is going to have different KPIs. Some people might have different ACOS targets and thresholds and the CPC for each account is relative to other metrics. The main goal of taking the temperature is to see if by and large, your account is doing well.
One of the best ways to judge the performance of your account is to compare your KPIs with the Amazon averages.
CPC
The first thing we look at is CPC (Cost-Per-Click). What is the average CPC in your account? Where does it compare to the average CPC on Amazon? And most importantly, does the CPC for your account make sense?
There’s a lot of information that CPCs can tell you about your niche. For starters, CPCs can shed light on how competitive your niche is.
For example, if your CPCs are high (say around $5), then your competitors have similar bids. We know this because Amazon advertising works in an auction format, so that if the next closest bidder was only bidding $1, you would only need to pay $1.01 in order to win the Amazon ad.
A $5 CPC on a $5 bid means your competitors are bidding the same amount as you (and possibly even more).
If your CPCs are high and your conversion rate is low, that is one of the tell-tale signs of a weak product-market fit. In general, larger accounts have higher conversion rates and better product-market fit. Regardless of size, understanding the “backstory” of your CPC can give you an idea of how competitive your niche is and the correct strategy to make the best of your PPC account.
ACOS
Evaluating ACOS depends on your company’s goals.
There are a few factors that go into determining if your ACOS is on target:
- What do you want/need your ACOS to be?
- How challenging is your niche?
- Is your ACOS very low and you have room to scale your ACOS and bid more aggressively?
- Are you trying to scale down your ACOS because it’s currently unprofitable?
Some companies take aggressive approaches with ACOS over 100%, just to get reviews and drive traffic to their product. On the flip side, an ACOS of 10% can sometimes be a breakeven point for an Amazon product with small profit margins.
You also want to make sure you check your ACOS over multiple timeframes, such as YTD, last 90 days, last 60 days, last 30 days, and MTD to identify any rising or falling trends.
Spend Per Day
When the folks at Ad Badger open an account, we want to monitor spend per day. Does it have thousands of dollars being spent and month’s worth of data rolls in every single day? Or is it an account that spends $45 dollars in that same timeframe and gives us virtually no statistically significant data?
When you’re performing a PPC audit on your account, it’s important to be aware of the amount of data you have at your disposal. The last thing you want to do is draw conclusions from data that has no statistical relevance.
It’s helpful to look at spend per day over the course of different timeframes. Whether it’s 90 days or all the way down to a week’s worth of data, comparing the spend per day over these timeframes can show trends in your campaign.
Whether you’re a big spender on Amazon or just getting started with smaller campaigns, there are certain areas to look at when your account is trending downward.
- Compare your timeframes.
- Is the problem a drop in impressions?
- Is it a drop in conversion rates?
If your account has a drop in impressions or clicks, that could be due to poor keyword performance, being outbid by competitors, or an algorithm change from Amazon.
However, if your conversion rate is dropping, there’s a high likelihood that your niche is becoming more competitive. Competitors are placing ads on your product listings and targeting your ASINS. To combat this, you need to check out how to compete with your competitors by getting more reviews and optimizing your images.
Step #2: Audit Your Campaign Structure
It’s no secret. Struggling campaigns are almost always unorganized campaigns. Even the most veteran digital marketers struggle with setting up Amazon campaigns.
To optimize your campaign structure, it’s imperative to form a logical hierarchy of products into your campaigns, ad groups, and targeting types.
A properly structured campaign starts with properly naming your campaigns. If you have a good campaign and ad group naming systems, everything else falls into place very easily.
Things you should include in your campaign name:
- Product/Product category
- Target ACOS
- Targeting information (auto/manual/product or keyword targeting/etc)
Another facet of campaign structure is understanding the type of campaign you’re running! One of the best practices when trying to keep your campaigns organized is sorting every campaign into a portfolio.
Here’s an example of how easy this makes your life.
Want to only see your auto campaigns? Boom! They can all be accessed with a single click of the “Auto Campaigns” portfolio. Once these campaigns are in the portfolio, sort the campaigns by ACOS and Ad Spend. This ensures that any campaigns in desperate need of attention aren’t forgotten about.
On a final note for campaign structure, it’s imperative to understand intentional placements and unintentional placements. Unintentional placements are common in auto campaigns, while intentional campaigns utilize exact match keywords. A mix of the two is ideal.
Step #3: Targeting Management
Now, we can look at ad groups and the targeting of the product ads.
First and foremost, when talking about targeting management, keyword dumping is a deadly sin! Using a reverse ASIN lookup tool or a keyword finder almost always leads to failure.
Once an ad group gets over 25-50 keywords, Amazon will stop serving impressions to over half of those keywords.
By way of analogy, it’s as if all of these keywords are animals crowded around a watering hole. Once too many animals come, the situation isn’t ideal for anyone and some animals get kicked out.
Well, in the world of Amazon Ads, when the watering hole gets too crowded with keywords, Amazon throws some keywords out.
This phenomenon is also found in Facebook Ads, and it’s suspected that Amazon follows the same premises. Basically, the best performing ads will continue to get impressions, and the rest will never see the light of day again.
The next important piece of targeting management is negative keywords. To be clear, there are campaign-level negative keywords and ad group level negative keywords. They’re not the same. If you want help with negative keywords, do yourself a favor and check out the Ad Badger Negative Keyword Automation.
Step #4: Bidding Management
We have our targets. Now, all that’s left to do is bid!
It’s pretty easy to see when an account has poor bid management. Incredibly high bids, very low bids, and having every bid exactly the same almost always point to bid mismanagement.
Bid management can be boiled down to a very simple principle. If something isn’t converting, don’t throw more money at it. Money, my friends, doesn’t make up for your poorly organized or targeted campaign.
Every ad group and every keyword in your campaigns should have a bid based on performance. We wrote an entire blog post about how to calculate the perfect bid, check it out!
Step #5: Fine-Tuning Your Campaigns
This is where we squeeze the last little bit of money out of an account. The 80/20 principle applies to this list. So while following the first 4 steps will make the biggest impact, fixing the little things in your account can go a long way.
The small adjustments can be things like adjusting your Auto Targeting bids: close match, loose match, compliments, and substitutes. You can also adjust your placement settings to really maximize the performance of your PPC.
The Bottom Line
To recap, the first (and arguably the most important) step of a self-audit is taking the temperature of your account. In order to make any decision, you have to understand the information Amazon gives you and how you can use it.
After taking the temperature of the account, the importance of organized, structured ad campaigns cannot be understated. Being able to find the information you’re looking for makes it virtually impossible to overlook struggling campaigns.
Targeting and bid management play a key role in saving you money, and being cognizant of both will pay dividends down the road. Finally, utilizing new features to fine-tune your campaign can take a great account to the next level!