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March 29, 2024

How to Reduce Amazon Ad Spend Without Sacrificing Sales

Advertising costs on Amazon are on a ruthless upward trajectory. Feeling the pinch and worried about maintaining profitability? You’re not alone. In this comprehensive guide, we’ll equip you with powerful strategies to dramatically reduce your Amazon ad spend without sacrificing sales.

This isn’t about cutting corners or sacrificing quality. We’ll show you how to optimize your advertising campaigns, leverage the power of organic ranking, and unlock conversion-boosting techniques that make your ad spend work harder for you.

Ready to reclaim control of your advertising budget and fuel explosive sales growth on Amazon? Let’s dive in!

[00:00:00] Rule-based AI optimizes bids
[00:01:10] 10K Collective Podcast Welcome
[00:03:02] Travis’s Amazon Journey
[00:04:09] Optimize Review Funnels
[00:06:01] Competing with Reviews
[00:07:28] Understanding Review Funnels
[00:10:08] Effective Call-to-Action
[00:11:45] Valuable Bonus Items
[00:12:39] Reducing Friction Levels
[00:15:03] Use Helium 10 for tracking rankings.
[00:15:19] Amplify bids with bid multipliers.
[00:15:39] Monitor ranking until bottom of page 1.
[00:15:56] Deploy multifaceted approach for ranking.
[00:16:25] Reduce bids by 50% when at top.
[00:16:38] Experiment with bid reductions weekly.
[00:17:03] Turn off ads for well-ranked bestsellers.
[00:17:27] Reduce ad spend by 10% weekly.
[00:18:20] Use UGC for inexpensive creatives.
[00:18:57] Use subtitles in video ads for engagement.

The Ever-Rising Tide of Ad Costs

Advertising costs are on an undeniable upward trajectory across platforms like Meta, Youtube, and yes, even Amazon. This trend is fueled by several factors, including:

  • Influx of Sellers: The Amazon marketplace is teeming with new sellers, particularly from China, leading to increased competition and a surge in ad costs for coveted keywords.
  • Amazon’s Profit Motive: As a publicly traded company, Amazon prioritizes shareholder value. This often translates to higher fees for sellers, including advertising costs. They may even charge storage fees if you don’t maintain sufficient inventory.
  • The Algorithmic Squeeze: Amazon’s AI-powered A9 algorithm plays a significant role in product ranking and ad placement. This can make it challenging for new entrants to gain traction without significant advertising spend.

The Two-Pronged Approach to Ad Control

The key to controlling your Amazon ad spend lies in a two-pronged approach:

1. Optimize for Organic Ranking:

The more your products rank organically in search results, the less reliant you become on PPC (pay-per-click) advertising. While AI-driven changes might necessitate some ongoing PPC investment to maintain ranking, a strong organic foundation reduces your overall dependence on paid ads.

Here are some key organic ranking optimization strategies:

  • Keyword Research: Identify relevant, high-volume keywords that accurately describe your products. Utilize tools like Amazon Seller Central’s search bar and keyword research extensions.
  • Product Listing Optimization: Craft compelling product titles, descriptions, and bullet points rich with relevant keywords. Optimize your product images for clarity and incorporate high-quality visuals.
  • Positive Reviews: Encourage satisfied customers to leave positive reviews. Reviews not only build trust and influence purchase decisions but also contribute to organic ranking.

2. Master the Art of Amazon Ads:

While organic ranking is crucial, PPC advertising remains a vital tool for driving traffic and sales on Amazon. Here’s how to optimize your Amazon ad campaigns for maximum return on investment:

  • Dedicated Ad Management: Ideally, assign a dedicated team member or leverage specialized software to manage your Amazon ads. Software automation can often outperform humans in managing complex bidding strategies.
  • Campaign Structure: Organize your campaigns strategically. Separate broad match, phrase match, and exact match keywords into distinct campaigns for better control and analysis.
  • Keyword Refinement: Monitor actual customer search terms that convert and continually refine your keyword lists. Regularly add high-performing search terms as exact match keywords in separate campaigns.

Humans Remain in the Loop

Don’t fall into the trap of “set it and forget it” advertising on Amazon. Human oversight remains crucial, even when using automation software.

  • Daily Monitoring: Make it a habit to check your advertising dashboard, whether using software or the Amazon Advertising console. Most software generates daily reports providing valuable insights.
  • Portfolio Management: Utilize portfolios within the Amazon Advertising console to group related campaigns and monitor overall performance metrics like ROAS (Return on Ad Spend) or ACoS (Advertising Cost of Sale).

Strategies to Reduce Ad Spend While Maintaining Sales

Here’s a practical toolkit to help you lower your Amazon ad spend without compromising sales:

  • Rule-Based Bidding with Software: Leverage software that automates bidding adjustments based on pre-defined rules. For instance, the software can reduce bids when a target ACoS is reached.
  • Identify “Dead-End” Clicks: Use “lookback windows” to analyze clicks that didn’t convert within a set timeframe (e.g., 30 days). Reduce bids for keywords associated with such clicks.
  • “Top of Search” Bid Multipliers: Strategically increase bids for top-of-search placements using the “Bid multiplier for top of search” feature. This can improve visibility and potentially lead to higher conversion rates.
  • Track Ranking and Adjust Bids: Utilize tools like Helium 10 to monitor your ASIN’s ranking for relevant keywords. Once your product reaches the bottom of page one, consider decreasing ad spend and exploring alternative marketing channels like Google Ads or TikTok Ads.

The Power of User-Generated Content (UGC)

Compelling visuals significantly impact conversion rates. Embrace user-generated content (UGC) to showcase your products in real-world settings and build trust with potential customers. Platforms like Upfluence can help you connect with relevant influencers to create high-quality UGC.

Conversion Optimization: The Crucial Factor

Amazon’s advertising algorithm prioritizes products with high conversion rates. In simpler terms, the more likely customers are to buy your product after clicking on your ad, the lower your ad costs will be. Here are some strategies to boost conversion rates and ultimately reduce ad spend:

  • Targeted Keywords: Ensure your chosen keywords accurately reflect your product’s features and benefits. Targeting irrelevant keywords attracts unqualified clicks and lowers conversion rates.
  • Promote Multi-Unit Sales: Amazon prioritizes “Unit session percentage,” which reflects the number of units sold per customer visit. Encourage multi-unit purchases by offering bundle deals or discounts on bulk orders.
  • High-Quality Product Listings: Invest time and resources in creating informative and visually appealing product listings. Utilize high-resolution product images, clear descriptions, and compelling bullet points that highlight key features and benefits.

Introducing GoKazam: The Software Solution for Reduced Ad Spend

GoKazam is a Software-as-a-Service (SaaS) platform designed to help sellers effectively manage their Amazon advertising costs. Its core USP lies in the principle that as your organic ranking improves, your advertising costs decrease.

Here’s what sets GoKazam apart:

  • Rule-Based Optimization: GoKazam leverages insights gleaned from managing hundreds of client accounts to create intelligent rules for optimizing ad spend.
  • Dynamic Bidding: The software takes into account your ASIN’s position in search results and adjusts bids accordingly. Lower ranking positions may require slightly higher bids for visibility, while top-ranking products might benefit from reduced bids.
  • Data-Driven Insights: GoKazam analyzes key metrics like impressions and conversion rates to identify opportunities for bid adjustments and campaign optimization.
  • Day Parting: GoKazam allows you to schedule ad delivery based on peak conversion times. This ensures your ads are displayed when they are most likely to generate sales and minimizes wasted spend.

To learn more visit GoKazam and explore how it can help you reduce your Amazon ad spend.

By implementing a two-pronged approach that focuses on organic ranking optimization and strategic ad management, you can significantly reduce your Amazon ad spend without sacrificing sales. Utilize software tools like GoKazam to automate bidding strategies and gain valuable insights, while employing compelling visuals and user-generated content to boost conversion rates. Remember, a data-driven approach and continuous optimization are key to maximizing your return on investment on Amazon.

 

 

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Michael Veazey


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