Should You Segment Your 4 Auto-Targets in Amazon Ads?

July 9, 2021
By The Badger

Auto-target segmentation: See your sponsored product auto campaigns in a new light.

Auto Campaigns. They are reliable. Simple to set up. Widely known as useful research pools for new keyword seeds. Relatively simple to optimize, relatively simple to scale. Often the flagship of every sponsored products ad funnel is even among the top performers in most ad accounts if maintained and trimmed regularly.

In November 2018, Amazon introduced the four targeting match types: close match, loose match, substitutes, and complements.

Since then, Amazon has continued its efforts to make the Amazon ad platform more sophisticated and nuanced with every new introduction. New knives are added to the portfolio every other month, which offers us more room to operate and attack market share and introduces more complexity to the game.

The four auto-targets in Amazon Ads:

Close match— Search terms closely related to your advertised product.
Loose match— Search terms loosely related to your advertised product.
Substitutes— Product targets that the A9 considers as substitutes for your advertised product.
Complements— Product targets that are complementary to your advertised product.

With Sponsored Displays’ newest updates, we now have dozens of new tools to segment our perception tunnels into different categories, subcategories, prebuilt audiences, retargeting audiences, etc.

Just because we can segment our auto-campaigns, should we?

What is auto campaign segmentation?

Today, we introduce an automatic sponsored product campaign strategy that you might not have heard before. It has been around for some time yet has never been widely popular or discussed: auto campaign segmentation.

In other words, creating four auto campaigns with the same SKU and only one match type activated respectively.

Example for auto campaign segmentation naming scheme:

[Auto] – CM – Garlic Press – SKU1 – TargetACOS -[0/0] <- Bid Modifier
[Auto] – LM – Garlic Press – SKU1 – TargetACOS -[0/0]
[Auto] – S – Garlic Press – SKU1 – TargetACOS -[0/0]
[Auto] – C – Garlic Press – SKU1 – TargetACOS -[0/0]

Alternatively, one campaign with a close match, loose match, and one campaign with substitute complements.

If you have highly relevant cross-sale products (for example, a damascus knife set as the main product and whetstone as a cross-sale product), then you might want to test this strategy.

We encourage you to get creative and test your mixtures. We will provide you with all possible variations to find the best approach for your unique situation, to create your perfect storm.

Why do we need auto-segmentation?

We need auto campaign segmentation because things are muddy in Amazon Ads.

We all have seen it. Sometimes one of the four-match types is displayed more often than the other, especially in launch phases. CM is getting all the traffic and converting efficiently, while LM, S, and C are left behind.

Furthermore, we cannot allocate the budget manually under each ad type; we can only modify the max CPC and hope Amazon gives more funding to the most efficient performing match type.

Let’s also keep in mind that ad efficiency might be your highest priority, but not necessarily Amazon’s highest priority.

With that not being muddy enough, all four ad types are blended in placement stats together. We cannot differentiate how close match, loose match, substitute, and complement clicks are displayed to the top of the search, product pages, and rest of the search.

We need a solution, and that’s where auto campaign segmentation comes in.

Potential Benefits of Auto Campaign Segmentation

There are two main potential benefits of auto-campaign segmentation: being the center of your match type storm and picking the weeds.

The Center Of Your Match Type Storm

Let’s center you in the silent middle of your match-type whirlwind and finally make your auto campaign data crystal clear. More importantly, take away control from Amazon and gain 100% steering ability over your auto campaign match type date.

Segment your auto campaigns, and you will have the steering wheel in your hand when optimizing for bid placements.

Or let’s say a loose match has 33 clicks at a conversion rate of 23%, 13% ACOS at the top of search at an average CPC of 0.55ct. Product pages are gathering 19 clicks, performing at 33% ACOS with a conversion rate of 7% at an average CPC of 0.43ct.

Know you can go ahead in your segmented auto campaign and set the bid to 0.15ct with a bid optimizer placed on top of the search only, potentially being displayed more often for the efficient performing placement.

Without segmentation, that would not be possible because ratios would blend with multiple match types.

Picking The Weeds

Another way to get ahead of the curve is to cultivate a list of negative exact keywords that are not relevant to your product and then create a list of competitor ASINs that are not positioned like your product. In other words, not the same price range, different variations of your product, different set size, different color, etc.

Implement these negative lists when uploading your auto campaigns and pick weeds before they can arise. This will prepare the initial conditions for your auto-targeting to be precise and tight.

Always remember, patterns that are not taken care of in the beginning will multiply over time. Facebook had privacy issues in its infancy at Harvard, and what are they notorious for nowadays? Don’t be like Facebook in that sense. Pick your irrelevant keyword seeds in the beginning and save yourself time.

Of course, do not be too tight and precise either. Search terms or product targets that are irrelevant and cheap but still provide decent impressions and click-through-rate can help the overall campaign score. You have to make your choice dependent on if your campaign is on course or not.

Pro Tip: You can now easily copy existing campaigns in your ad console to different marketplaces.

Possible Drawbacks of Auto Campaign Segmentation

Now let’s talk about the possible downsides of this segmentation strategy. The two biggest drawbacks are over-complicating your existing campaign structures and spreading their power too thin.

If you have hundreds to thousands of SKUs, then you do not necessarily want to make your structure more complicated as it is. However, if you’d still like to try this strategy, we recommend that you start with your top 3-5 products and test for positive results from the segmentation strategy.

Another drawback is that segmenting your ad spend over too many campaigns could spread the firepower of your auto campaigns too thin. Imagine a laser placed into four different spots instead of focused into one. Focusing the laser’s power into one concentrated spot is better.

Generally speaking, if you have more budget to allocate to a campaign, it will gather data faster. If your budget is tight, you might want to package all of your firepower in one or two auto campaigns max.

Know your current auto-target strategy to determine which auto-segmentation is best for you to avoid falling prey to the possible drawbacks.

Additional Auto- Target Techniques

If you have decided that auto-campaign segmentation is right for you, then here are more techniques to boost your efforts.

An alternative technique is staggering your campaign based on max CPC. For example, create one auto campaign with max CPC of 0.45ct, the next one with 0.55ct, 0.65ct, etc., so you make sure you are in all bidding pools across the cost-per-click spectrum. Combined with the match type segmentation, this would be the ultimate structure. It might drive your campaign optimizer into CPC insanity.

Another strategy that is a rather old-school strategy is using hyper-low max CPC campaigns of 0.35ct or less, depending on your niche. Of course, the “gold panning” autos will not be the workhorses of your ad account. From experience, though, they perform at descending to excellent ACOS ratios and will get you a few more sales from the table.

Yes, Segment Your 4 Auto-Targets in Amazon Ads

You are now hopefully equipped with a few more knives in your repertoire. Remember, the essential points are that you keep your structure simple and efficient. You will have to decide in your unique situation if the segmentation strategy is improving simplicity in your analysis and decision making or not.

Test and follow your instinct. We will see you in The Badger Den.