How to Optimize Keywords with 0 Sales in Amazon PPC

September 24, 2020
By The Badger

We’re big fans of the 80/20 rule. Essentially, the rule says that 80% of your conversions will come from 20% of your keywords. What does that mean for most sellers? They have keywords with zero conversions, and most don’t know what to do about it.

There’s plenty of confusion surrounding this topic, and even experienced sellers are left scratching their heads when they see a keyword that just isn’t getting conversions.

So what should you do about it?

Search Terms vs. Keywords

An important distinction to make is the difference between search terms and keywords. In Amazon PPC, the search terms you appear for aren’t always the keywords you’re bidding on.

If you have a broad-match keyword, let’s use “coffee mug” as an example, you could show up for a wide variety of search terms. “Coffee mugs for dads,” “Coffee mugs for Father’s Day,” and “Black coffee mugs,” could all show up on your search term report. Did you bid on these specific variations? No. But, a broad match keyword can result in your product appearing for quite a few different search terms that contain your keyword.

For this post, we’re going to focus on exact-match keywords. For a quick rundown on match types, an exact-match keyword only allows your product to show up when that exact keyword is typed into the search bar (plurals and misspellings included). Your product won’t show up for searches that simply contain your keyword, only a search for that keyword alone.

Optimizing Keywords with Zero Sales

We recently sat down with one of our Managed Services clients and made a shocking discovery. This seller had a relevant exact-match keyword that had $100 in spend and 0 conversions. At face value, that seems like a complete waste of money, right? Not quite.

For most sellers, spending $100 to get 0 conversions is bad news. However, this seller has single product ad groups, and the product tied to this keyword sells for over $7,000. This seller has a target ACOS of 20%, which means they should be willing to spend approximately $1500 before getting a sale.

While this is a very unique scenario, it illustrates the importance of making decisions based on your keyword data not on your first impression of the situation. Had this seller gone with their gut and paused the keyword, they would have trashed a relevant keyword before it had a chance to get going.

Setting Thresholds to Pause Keywords

We can’t use an arbitrary number to decide whether or not a keyword needs to be paused. If you set a benchmark for pausing keywords at 10, 20, or even 1,000 clicks before making a conversion, you’re likely either wasting ad spend or pausing perfectly good keywords.

Instead of arbitrarily setting a limit on the number of clicks before getting one conversion, use a ratio that serves as your threshold for pausing keywords. We recommend looking at the average conversion rate for your other keywords (for the product) and then setting your threshold at two or three times your average.

Let’s say you have a normal 10% conversion rate. After the first 10 clicks, if you don’t have a conversion yet don’t freak out. Wait until that keyword gets to 30-35 clicks without a conversion before you think about pausing the keyword.

Another strategy you can deploy when your keyword is approaching that upper threshold is lowering your bids. Reducing your bids lowers your risk because you’re limiting the potential loss in ad spend from another click that doesn’t result in a conversion. If you are very hands-on with your PPC, you can lower your bid a small amount after each click that doesn’t convert.

Measuring Keywords Across Every Metric

While conversion rate is the primary metric to look at when judging your keywords, you can also get great insights from other metrics.

What metrics can help you determine if a keyword should be paused?

Spend
Cost per Click (CPC)
Click Through Rate (CTR)

When you look at the averages for each of these metrics, you create the most complete picture of how your keyword’s performance. While a keyword may have a very low conversion rate, if it’s below your spend or CPC averages there’s no harm in keeping the keyword and gathering more data.

A Nightmare Scenario for Non-Converting Keywords

You’ve just launched a few campaigns for one product, and you have multiple keywords in each campaign. Your product sells for $100 and your target ACOS is 20%. That means you’re willing to spend $20 for every sale.

You’re bidding $1 for each keyword and your conversion rate is hovering around 10%.

You have 10 keywords and each keyword has a bid of $1.

Now, with the parameters set, let’s say you’re looking at your campaigns one day and see that you have gotten 10 clicks for each keyword. From these 100 clicks, you only have one sale. Time to panic, right? An ACOS of 100% must mean that something has gone horribly wrong.

While most sellers would freak out in this situation, by analyzing your keyword data you can get a better understanding of what’s going on. It’s very rare for sellers to reach their ACOS targets when they launch new campaigns.

If you look at this scenario through the lens of the entire campaign, you might see 100 clicks and only one conversion and decide to shut it all down. However, if you look at each individual keyword there’s simply not enough data to pause any of the keywords.

Don’t panic if you’re just getting started and your campaign-level metrics aren’t where you want them to be. Analyze each keyword individually and use the thresholds we outlined earlier to make decisions on how to optimize them.

Practical Solutions to this Keyword Conundrum

We now know how to properly gauge keyword performance, but how can you set yourself up for success when launching ad groups? We’ve come up with three solutions that will put you in the best position to properly optimize your keywords.

Solution #1: Starting with Fewer Keywords

As we saw in our “nightmare scenario” above, sellers can be tempted to make snap decisions based on ad group-level metrics. In the early days of an ad group, your data is spread out thin across your keywords.

To consolidate your data, use fewer keywords. Sure, the scope of your keywords may be smaller, but by using fewer keywords you’ll have fewer keywords that have zero sales.

Solution #2: Use Relevant Keywords

It may seem obvious, but you’d be surprised how many sellers think every keyword is created equally. That just isn’t the case. Some keywords are more relevant to your product than others.

The quickest way to get a bunch of non-converting keywords is to use keywords that aren’t relevant to your product.

Some keywords may be relevant, but that doesn’t mean they are the best fit either. If you’re selling large, concert-quality speakers, then the keyword “speakers” on Amazon will probably result in very few conversions because the category is so broad.

Solution #3: Limit Your CPCs

As we said before, combining your metrics gives you the best chance of making the right decisions about your keywords. While these thresholds are incredibly useful, that doesn’t always mean you’re comfortable with them.

If you want to limit your CPC during a certain stage of a keyword’s maturation, you can certainly do that. We recommend starting with only a conversion rate threshold and then moving into spend or CPC thresholds down the line. This ensures that you’re still collecting data, but you’re also able to limit your spend.

Be Patient

The metric we swear by, ACOS, can actually lead you astray when looking at individual keyword performance. Let’s say you expect one conversion from 100 clicks on a keyword for a very expensive product. The first 100 clicks come in, and you get one sale. You’re on track. Now, if the next 70 clicks don’t result in a sale, you’re ACOS is going to rise dramatically.

This rise in ACOS can cause sellers to panic and only focus on that metric. Don’t be fooled. Your keyword performance hasn’t changed. You’re simply waiting for that next conversion from the next 100 clicks. It may not show up, but you have to at least give it a chance.

Patience is essential when it comes to selling expensive items on Amazon, and if you don’t let that cycle of having one conversion for every 100 clicks (on average) run a few times, you can’t make a decision about that keyword.

Key Takeaways

Seeing a bunch of keywords that have zero conversions can be concerning, but that doesn’t mean they aren’t good keywords.

Set thresholds based on your average conversion rate and other metrics and base your decisions around those limits. If you have a keyword that is approaching the threshold to be paused, lower the bid so you can minimize the loss in ad spend.

Don’t make decisions about keywords based on campaign or ad group level data. Even if things look awful, judge each keyword individually.

Finally, be patient. Data doesn’t just show up out of thin air, and no one can tell you which keywords are working and which ones should be paused in the early stages of data collection.