Typical challenges when using Amazon Advertising are:
- Achieved ACoS is above target ACoS
- Budget cannot be spent
- Campaigns do not start after initial setup
These three challenges are explained in further detail below and actions on how to deal with them are recommended.
ACHIEVED ACOS IS ABOVE TARGET ACOS (TACOS)
What happens in case the ACoS of a campaign is higher than its Target ACoS (TACoS)? Two cases need to be distinguished:
Case 1: Recently set-up campaigns (up to 4 weeks after onboarding)
First of all, it should be borne in mind that the ACoS of new campaigns is generally higher than the TACoS value set.
- One reason is that Amazon recalculates conversions up to 14 days after the click. This means that, while the costs are allocated to the campaign immediately, the conversions and thus the revenue are allocated to the campaign with a delay. This means that the data for the last 14 days is not really reliable. Our experience shows that this is a normal condition and does not require any further adjustment at first.
- Another reason for the ACoS being higher than the TACoS initally is that our algorithm needs to learn which products and keywords perform well and which ones don't. It takes some time to gather reliable data on campaign performance and optimise accordingly.
According to our best practice we recommend letting campaigns run for at least 6 weeks without any adjustments regarding the TACoS. During this time, the algorithm will have time to develop the campaigns and a first meaningful campaign review can be made on the basis of the reliable data for a period of 4 weeks.
Case 2: Running campaigns (onboarded more than 4 weeks ago)
What the algorithm does:
The Ad Optimiser tries to reach overall targets for the entire entity. It optimises each campaign with focus to its efficiency, meaning that whenever the algorithm recognises a bad performance (ACoS > TACoS), the bids on the respective keywords will be reduced continuously.
The Ad Optimiser will reduce bids (on low performing keywords or for the campaign in total).
Keep in mind: it might not be possible to reach the TACoS values you have set for some campaigns. The algorithm will reduce bids to a minimum amount, until the campaign will not cause costs anymore. The algorithm will allocate more budget to well-performing campaigns and reduce spends on bad-performing campaigns.
While the algorithm will take care of the optimisation it makes sense to have a deeper look into the products and determine the cause for the bad performance. Here are some recommendations on how to improve:
|Realistic TACoS||Depending on the product it may be worth increasing the TACoS setting. This is especially true for novelties and in markets with intense competition. As always be aware of your overall product margin when changing the TACoS in Ad Optimiser.|
|Content (title, description, bullet points, A+)||Revise your product content (title, description, bullet points, A+) and optimise pictures/videos.|
|Availability issues (OOS/LBB)||Check the availability and take care that "out of stock" (OOS)/ "lost buybox" (LBB) is not an issue. In case you are not the buy box owner, Amazon will stop displaying ads for those products automatically.|
|Product/maket fit (product features, price)||Compare the product price and ratings with the bestsellers in the corresponding category - customers also compare products online.|
|Reviews/ratings (rating of at least 3.5 stars)||To perform well a product should have a rating of at least 3.5 stars and more than 20 reviews.|
BUDGET CANNOT BE SPENT
One of the most relevant challenges with Amazon Advertising is that the existing budget cannot be spent. This mainly happens due to low TACoS values, a small number of advertised products (compared to budget) or due to low traffic volumes.
Here are some recommendations on how to solve this challenge:
|1. Add further ASINs||The most efficient remedy to a low Sponsored Ads spend is activating new ASINs in Ad Optimiser. As a rule of thumb, an average product spends 5-10 (€/$/￡...) per day, but deviations exist. There might be extremely well performing ASINs spending a lot more per day, but also low performing products spending almost nothing per day.|
|2. Increase TACoS||Depending on the product it may be worth increasing the TACoS setting. This is especially true for novelties and in markets with intense competition. The bids calculated by Ad Optimiser which would still meet your TACoS might be too low to win auctions, leading to spends close to zero. As always be aware of your overall product margin when changing the TACoS in Ad Optimiser.|
|3. Check keywords||Ad Optimiser analyses the most relevant keywords for a product automatically. However, it may occur that not all relevant keywords can be found e.g. due to a low organic visibility of an ASIN or an inaccurate product categorisation. Adding keywords manually to a campaign can help here to increase traffic and spend more budget. They can be uploaded in Ad Optimiser campaign manager.|
|4. Activate all targeting types for SPAs||Amazon offers two targeting types for SPAs. Manual targeting uses a keyword list to control the ads (mainly on the search results page). Automatic targeting gives Amazon the full freedom to target the ad and ad placement (e.g. also on other product detail pages). In Ad Optimiser you can decide for one or both SPA campaign types. Per default, the Ad Optimiser activates both campaign types. In case you have chosen to restrict to one type, you can activate both campaign types at any time. This would typically increase your ad spend.|
|5. Use all campaign types||Amazon offers different campaign types - SPA, SBA and PDA. To boost impressions and clicks it can make sense to use all available campaign types. Be aware that this might mean that you need to upgrade your metoda contract from Starter to Pro.|
CAMPAIGNS DO NOT START AFTER INITIAL SETUP
When campaigns do not start as planned, please check the following potential issues:
|Start & End dates of campaigns||Check if start date and end date is correct for the campaigns.|
|Budget periods||Check if a budget period which includes current date was set.|
|ASINs & SKUs do not match||In case you have onboarded ASINs and SKUs that do not match, no campaigns will be generated. Always take care of onboarding correct ASINs and SKUs.|
|Availability & buybox ownership||Your products need to be available, otherwise Amazon will block ads on those. The same is true for buybox ownership: products for which Amazon (for vendors) or you as a seller do not own the buybox, Amazon will not display any ads.|
|Deactivation of existing campaigns||Avoid having own and metoda managed campaigns on the same products. Otherwise, the ads will bid against each other and older campaigns tend to be preferred by Amazon as they outperform newer ones in terms of historical performance.|
|TACoS||Depending on the product it may be worth increasing the TACoS setting. This is especially true for novelties and in markets with intense competition. According to our best practice, it is better to start with slightly higher TACoS values and decrease them afterwards in order to give the algorithm room for development of campaigns. As always be aware of your overall product margin when changing the TACoS in Ad Optimiser.|