Simple Ways to Cut Non-Converting Ad Spend in Amazon PPC

September 26, 2024
By The Badger

Non-converting spend is the portion of your ad budget that doesn’t result in direct actions like purchases or sign-ups. But here’s the thing: labeling all non-converting spend as “wasted” is inaccurate. Just because a click doesn’t lead to an immediate conversion doesn’t mean it has no value. Some of this spend is part of the buyer’s journey. The goal isn’t to eliminate non-converting spend entirely but to minimize the irrelevant spending that’s genuinely wasted.

Today, we’re diving into how to identify and reduce that waste by pulling reports on Sponsored Products, Brands, and Display ads.

Introduction

A lot of non-converting spend consists of small, low-volume searches—those one or two clicks a month that are tough to track. Today, we’ll walk through how to spot this spend and reduce it.

One major factor behind non-converting spend is poor audience targeting. If your ads reach people who aren’t interested, you’re throwing money away. Tightening up your targeting ensures you’re reaching those who are more likely to convert, reducing the amount of waste.

Another issue is ad fatigue. When users see the same ad too often, they stop paying attention. Keeping your creative fresh and spreading your budget wisely can help keep engagement high and cut down on unnecessary spend.

The easiest way to start fixing this is by looking at search term reports. It’s simple—just identify search terms that aren’t bringing in orders.

Most accounts spend 20-30% of their budget on non-converting clicks. By reducing that to 20%, you can shave a significant amount off your ad spend without losing any revenue.

Remember, it’s better to negate search terms that have reached 12-15 clicks without generating any orders.

What is Non-Converting Spend?

Non-converting spend refers to the part of your ad budget that doesn’t yield desired results. It’s not quite right to call all non-converting spend “wasted.” Sure, you’re not getting conversions, but that doesn’t mean every click is useless.

A major reason businesses face non-converting spend is ad fatigue. When consumers see the same ads over and over, they become desensitized, leading to lower engagement and wasted budget. Most businesses also struggle with conversion rates—only 22% are satisfied with their performance.

Reducing non-converting spend is all about identifying the parts of your campaign that are draining your budget without driving results and making the necessary adjustments to turn that around.

Identifying Non-Converting Spend

Identifying non-converting spend means digging into where your ad dollars are going and what they’re delivering. If a significant part of your budget is being spent on clicks that don’t convert, that’s media waste.

Before negating, make sure to review the search terms. If they are highly relevant to our product but still not converting, we should analyze the reason. Maybe we missed something on the listing, or the photos aren’t clearly communicating the product features.

The best way to track non-converting spend is by analyzing your ad performance data. Look at your search term reports and identify the keywords that get clicks but no sales—these are draining your budget. Then, break down your audience segments to see where spend is high but conversions are low. This will help you pinpoint areas where your targeting is off, leading to wasted spend.

Also, review your ad placements. Some placements may be eating up a large portion of your budget without delivering results. Small, low-volume search terms can also fly under the radar, but over time, they add up.

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Reducing Non-Converting Spend in Amazon Ads

The first step in addressing non-converting spend is to dive into your Sponsored Ads reports and gather the necessary data. As an Amazon seller or marketer, this means paying close attention to each ad type—Sponsored Products, Sponsored Brands, and Sponsored Display—to see where your ad budget is going and what it’s actually delivering.

Here’s a simple process.

I usually do this analysis on a Wednesday, reviewing the previous Sunday to Saturday.

Why? By Wednesday, the data from the prior week has settled, giving me an accurate snapshot of performance. This gives the last day of the week 72 hours to stabilize, ensuring all conversions, clicks, and impressions are fully captured.

Now, let’s get into the practical steps. Start by pulling the search term reports for Sponsored Products, Brands, and Display. These reports are crucial for tracking non-converting spend.

For Sponsored Products, you’ll want to filter the search terms by sales, which only shows terms with zero sales. This allows you to quickly identify how much you’re spending on terms that aren’t converting. For example, you might find that your Sponsored Products generated $2,167 in non-converting spend in just one week. That’s a budget segment you need to address.

Next, apply the same process to Sponsored Brands. Again, you filter out all terms without sales and note the spend. Maybe that comes to $587.48 for the week. Now move to Sponsored Display, but this time, pull the “matched target” report, as there’s no search term report for this ad type. After running the filter, you might discover you’ve spent $2,662 on targets that didn’t convert.

Once you have the data, head over to your tracking sheet—something every Amazon business should maintain. Create a “non-converting spend” tracker where you log totals for Sponsored Products, Brands, and Display.

Make sure to record the analysis date and the week number so you can track trends over time. This week-by-week monitoring will help you identify whether your non-converting spend is improving as you optimize.

For example, in one account, I found that out of a total ad spend of $5,600 for the week, $2,781 went toward non-converting spend—nearly 49% of the total budget. That’s a significant chunk of wasted spend. But simply pausing all non-converting items isn’t always the solution. Often, the issue comes from small, incremental spend across multiple search terms.

For instance, you might notice 10 search terms that spent $10 each without generating any sales, but many terms with zero conversions have an average spend of just $1.40. This adds up over time but isn’t as obvious as a large, single source of waste.

Non-converting spend will always exist in some form, but the key is to track it consistently and make gradual improvements.

Your goal should be to lower that percentage while keeping your overall sales stable or growing.

This balance will lead to a more efficient ad spend and, ultimately, better results for your Amazon business.

Common Causes of Non-Converting Spend

Non-converting spend in Amazon PPC usually boils down to a few key issues. The first major one is poorly targeted campaigns. If your ads aren’t showing up for the right search terms or audiences on Amazon, you’re wasting budget. Generic ads that don’t resonate with potential buyers fail to convert, leading to inefficient spending.

Another big factor is the disconnect between the ad and the product detail page. If what the ad promises doesn’t match the product or offer, shoppers will click but bounce without buying. This gap leads to high click-through rates but low conversions. Even factors like weak promotions or pricing that’s not competitive can push buyers away, regardless of how well the ad is targeted.

Issues with the product detail page are also critical. If the page loads slowly or doesn’t provide enough compelling information, conversions will stay low no matter how much traffic the ad drives. Poor ad creatives and unengaging copy also make it difficult to capture attention.

Lastly, ad fatigue plays a role—if shoppers see the same ad too often, they’ll start ignoring it, leading to lower engagement and higher wasted spend.

Remember, if the product is new, the search terms might not generate sales due to a low number of reviews. In such cases, we could add them as negatives to balance conversion, but after about 3 months, it’s worth retesting those terms.

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Best Practices for Ongoing Optimization and Budget Allocation

Keeping your ad spend efficient and effective comes down to smart, ongoing optimization. Start by reallocating your budget to the channels that are delivering the best conversions and cut back on those that aren’t pulling their weight. The more agile you are with your budget, the easier it is to keep your campaigns profitable.

The trick is to keep a close eye on performance. Regularly checking in on your data lets you make quick decisions about where your money should go. Set clear goals focused on conversions, not just clicks, and adjust as needed. That way, your budget will always work toward what matters most.

Don’t forget to diversify your strategy too. Using different ad types helps you reach a wider audience and spread your risk. The more you test and tweak your approach, the more efficient your campaigns will be, giving you the best possible return on your ad spend.

How to Tackle Non-Converting Spend and Improve ACoS

When it comes to managing non-converting spend, tracking it is just the beginning. If your non-converting spend sits at 49%, like in this case, it’s a red flag 🚩.

Spending $2,000 on Sponsored Products without conversions is a problem that needs attention. But it’s not as simple as cutting everything that’s spent over $20 and turning it into a negative keyword. You need to zoom out and look at a longer timeframe—think six months, not just 30 or 60 days. This gives you a clearer picture of which terms are consistently underperforming and where you can make more impactful changes.

A good next step is to conduct a search term analysis. Combine spend from duplicate terms, which appear multiple times, and identify areas where cutting spend makes sense. An Ngram analysis is also a smart approach—it helps you find recurring phrases or word patterns within search terms that are driving clicks but not converting.

Now, if you’ve been following along, you probably know about the ACoS Power Ratio. This is one of the most valuable metrics in any Amazon seller’s toolbox. It allows you to calculate what your ACoS would have been if you hadn’t spent anything on non-converting keywords. Simply subtract your non-converting spend from your total ad spend to get your total converting spend. Then, you can calculate what your ACoS would look like if every dollar went toward conversions.

You Could Be Wasting $1,000's On Low-Click Search Terms Use the N-Gram Sheet to get insight in 5 minutes

Did you know that MOST of your search terms get less than 5 clicks and waste $1,000’s every month.

Stop wasting money. Improve ACOS.

In this example, when we remove the non-converting spend, the ACoS drops to 17%. The ACoS Power Ratio ends at 1.97, meaning that for every dollar spent on converting items, this account is still fairly efficient. It’s likely that this account is in a heavy testing phase—adding new keywords, experimenting with different campaign types, and pushing boundaries to find what works.

But here’s the key takeaway: this is a process. You need to go through your data, calculate your own non-converting spend, and make informed adjustments over time. Reducing non-converting spend is one of the simplest ways to lower your ACoS and improve your overall ad performance. So if you’re just getting started, be sure to check out earlier posts or episodes in this series.

The goal is to gradually refine your ad strategy, eliminate waste, and ensure that every dollar spent drives results.

Summary

In this article, we explored what non-converting ad spend is and how tracking it can greatly improve your campaign performance. By pulling reports for Sponsored Products, Brands, and Display, we learned how to pinpoint where budget is being wasted on clicks that don’t convert. While not all non-converting clicks are truly “wasted,” it’s crucial to focus on the areas that aren’t delivering results and make the necessary adjustments.

We also covered how long-term analysis, including search term and Ngram analysis, helps spot inefficiencies and cut down on waste. Consistent monitoring and tweaks to your strategy can help reduce non-converting spend and boost your ACoS.

And hey, remember—saving those extra dollars on wasted clicks might just be your ticket to that fancy coffee machine ☕ you’ve been eyeing. Your budget will thank you (and so will your caffeine intake).

The PPC Den Podcast

If you enjoy supplementing your long reads with audio or video, we cover this topic on our podcast as well, The PPC Den.

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