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Advertising Cost Reduction

The best way to reduce your ad costs involves identifying areas where you’re overspending and allocating ad dollars to high-performing campaigns.

This results in a dramatic decrease in ACOS as well as your overall ad spend. With these optimizations, you’ll pave the way to scale your growth profitably.

Reduce My Ad Costs
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Ad Cost Reduction Area of Focus:

  • Ad Spend Over Target
  • Focus on Relevancy
  • Eliminate Non-Performing Keywords
  • Click-Through Rate (CTR)
  • CPC - Cost Per Click
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Ad Spend Over Target

Our target ACOS is 25%. With this number and the number of sales, we can best determine our ideal target ad spend. Then, we’ll determine which campaigns generate the most spending over that target. With an SKU analysis, we’ll even determine which SKUs are overspending.

Improve Keyword Targeting

To ensure ads aren’t being displayed for irrelevant searches, keyword targets need to be adjusted. We’ll shift the focus to what we call AAA relevant keywords: highly relevant keywords that impact your ranking efforts. Shifting our focus here will rein in ACOS that may otherwise be thrown away.

Eliminate Non-Performing Keywords

Any keywords that don’t bring in impressions, sales, or clicks should be paused. It’s the most effective way to cut down on your ad spending. We’ll inspect click-through rates, with a target CTR of over 1%. Any keyword with over our standard minimum 10 clicks and a CTR of below 1% and no sales won’t make the cut.

Eliminate Non-Performing ASINs

If your advertised products have over 10 clicks and have high ACOS or show no conversions, we’ll check to see if they’re closely related. Generally, the flavor or theme used for parentage should be sufficient for ad groups. If they’re closely related, but still experiencing low conversion rates, it might be that an ASIN is experiencing catalog problems. This could be due to several factors from a poorly written title, lack of clear benefits and features, low-res photos, and more.

Actual Cost Per Click vs Bid

Once we’ve eliminated irrelevant ads and keywords, the next focus will be on the CPC. High CPCS will blow through your daily ads budget, so correcting that must be prioritized. You can calculate the correct CPC by using the expected conversion rare and the target ACOS. The conversion rate will be higher for AAA relevant keywords (36%) compared to other keywords (10%). They’ll also vary by product category. You can calculate the big by using the following formula:

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Copyright © 2022 My Amazon Guy. All rights reserved.
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All rights reserved.

I was fortunate to be part of MAG's first batch of its Advertising Internship Program. The timing was perfect for me as I was looking for an opportunity to learn more about Amazon PPC and at the same time to have hands-on training to work on accounts.  

 

When I started my internship, I listed down the things I wanted to learn. And I am happy to say that I've ticked all the boxes! My most favorite was "Optimization Using Bulk Files”. Bulk files and I, we did not get along at first, it was so scary seeing all those data! But I had a great mentor who guided me along the way. He patiently taught me step by step on how to process the data. He was very enthusiastic in answering all of my questions. He supported me until I gained the confidence in uploading my first, second, third (and so on) bulk uploads. 

 

The biggest advantage in working with MAG (and I must say one thing that I always look forward to every week) is its Weekly Ads Training. Every week, we discuss various topics about PPC. Interns/Ads Specialists/Ads Managers, we all share knowledge, information, and updates about PPC. During our discussions, we exchange ideas and feedback. It became an avenue not just to learn a skill, but also to clear any vague or ambiguous PPC topics. 

 

For me, the biggest disadvantage is the work schedule. As an Intern, I have to follow EST timing. The time difference from my location was only 8 hours, but being a morning person, I really struggled to keep myself awake. But if you are a night owl, then this will not be a problem for you.

 

So if you are considering joining the MAG Advertising Internship Program, my advice to you is to take action - APPLY NOW! The knowledge that you will gain and the skill that you will develop from this program will be invaluable. And who knows? From being an Intern, you might be the next one to be promoted as Jr. Ads Specialist! 

Maria Victoria Piedad