PPC: The 7 mistakes people make with their Amazon Sponsored Ads – #1 Budget Mistakes

This post is part 1 in a series of 7 posts all about the, you guessed it, 7 most common mistakes people make with their sponsored ads/PPC strategy*.   Once you’ve read these posts you will be ahead of 99% of Amazon sellers.

*Strategy is a generous word, because a lot of people’s PPC “strategy” is the same strategy you might use when trying to get a spider off your back. A lot of screaming. A lot of flailing. A lot of panic. Auto Campaign.

In your defense, it’s okay.  PPC is mind numbingly boring, and I can’t promise to make it less boring, but so far we’ve talked about spiders and I feel like if you google “PPC” and “Spider off your back” this page is going to be the only hit, so that’s a start.

So the first thing people mess up with their PPC?

TOTALLY SCREWING UP THEIR BUDGETS

Budgets are so complicated that even though it’s #1 of the 7 things people screw up, there are actually three sub-mistakes people make.  So this numbering system is already sort of a mess, but it’ll be fine.  We’ll get through it together.

So here’s sub-mistake #1 of mistake #1. Catchy.

Budget Mistake #1 – No Overall Budget Caps

If you learn NOTHING else from this post, please, learn this. Set a daily budget cap for your entire campaign.  You can do it from this screen, here.

This # is the most you can spend on your sponsored ads.   Please note this # is daily. So if it’s set to $5, your monthly spend will be ~30*5 ($150).

An interesting thing about Amazon is that it will almost always spend your money, and this number is an average.  So, if on days 1-29 you have spent a grand total of $20, Amazon will try its best to spend $130 on day #30. Because, much like you, Amazon loves money.

If you are very sure of what you’re doing you can take advantage of this setting:

Wherein you specify exactly how much you want to spend, per campaign.   If you’re good about setting your campaign budgets, then use this setting, but it’s very easy to set $20 daily budgets on 30 campaigns and next thing you know you’re spending $18,000 a month on sponsored ads and not sure how you got there.

This leads to the next budget problem, which is also a structural problem but I’ll include it here because money, right?

Budget Mistake #2 – Mixing Your VERY PROFITABLE and KINDA PROFITABLE keywords.

I was listening to a podcast from a leading, and boring, ‘guru’ in the PPC space and she or he started off by saying “You probably want a budget of $50-$200 on your converting campaign” and I had two thoughts back to back.

Thought #1.

Wow what an interesting choice to deliver this content with as little excitement or intonation as humanly possible, ensuring that I am both confused and bored and maybe a little sad inside, I wonder why she or he chose to do that? Did I fall asleep? I think I may have also fallen asleep. Wow.

Thought #2.

Wait why would you only have one converting campaign and give it a unified budget?”

The idea of having a “converting campaign” is like this.

Imagine there are three people in front of you.  Each of them says “Hey, if you give me money, I’ll give you even more money back until I run out.”

(This is how PPC works).

You give a dollar to person #1, and he gives you back $2. Cool. So you give them a bunch more.

You give a dollar to person #2 and she laughs and gives you back the shiniest nickle you’ve ever seen.

And then you give a dollar to person #3 and she gives you back $20. How much more money do you give to person #3?

Person #1 (+$1)/Person #3(+$19)  are both considered “Converting” because you made money on those deals.

Person #2(-$.95) is considered “Non Converting” because you lost money on that deal.

Mr. PPC guru suggests that you give $50+ a day to person #1 and person #3, which is fine if you don’t like money but if you like money it’s senseless. (And yes, also cents-less, you make less cents.)

The problem is that lumping all of those keywords into the same campaign means that Amazon will *indiscriminately* give $50 to person #1 and person #3 until you’ve spent all $50, and maybe person #1 is just quick on the draw.

The best thing to do is to separate your “awesome keywords” and your “pretty good” keywords into two different campaigns with two different budgets.

Now, this is a rabbit hole, of course.  You could make an infinite # of campaigns for infinite numbers of profitability, but if you even just split it so that your top 20% of performers go in one “bucket” with its own specified budget and your other 80% go in another, this can have a massive effect on how much money you make, simply by leaving more room in your budget for your most profitable keywords.

Which brings us to budget mistake #3 – NOT CHECKING YOUR DAILY PPC SPEND

Here’s the thing. If you are spending 100% of your daily budget on PPC you’re probably making a mistake.  That means that Amazon _could_ have spent more money, but didn’t simply because you put a cap.

Which means, assuming you have profitable keywords in your campaigns (and under most circumstances you should almost *exclusively* have profitable keywords in your campaigns) that means you didn’t spend money on profitable keywords because you ran out of money.

Let me rephrase that more simply because it bears repeating:

Hitting your daily budget probably means you didn’t turn money into even more money.

Hitting your daily budget means you turned off the magical money making machine.

*Yes there are weirdo scenarios where you might not need to spend on PPC because you’re already ranked #1 for all of your keywords etc etc, so why spend to be #1 in paid search and organic, because maybe your PPC spend is cannibalizing your organic spend but this only applies to like 1 out of a million people and that guy’s name is probably like Richard or Steven or something and no one likes him anyway because who gets to be #1 for all 20,000 of their search terms? No one and I bet Richard/Steven didn’t think to A/B test to MAKE SURE that ALL of their terms were cannibalizing, nope, they didn’t unless Richard/Steven was showing off, and no one likes a show off, Richard/Steven, NO ONE.

 

 

 

Leave a Reply

Your email address will not be published. Required fields are marked *