In this blog, I’m going to share 9 Proven Budgeting Tips to get the most out of Amazon advertising.
This is Part 2 of a three part series on How to be More Efficient with Your Ad Spend.
If you haven’t done so already, please watch Part 1: Are You Spending Too Much on Ads? (Managing Amazon Ad Spending). In it you’ll discover new ways to determine if you’re overspending on advertising (or underspending).
9 Essential Tips To Improve Your Ad Efficiency…
Efficiency is the ability to avoid wasting time, effort, and money in accomplishing a task or producing a desired result.
Efficiency is important for profitability.
Increasing efficiency saves time and money, making any business more profitable.
#1: Determine the 20% of SKUs that account for 80% of your sales.
Identify SKUs that are the core revenue drivers in your business. Allocate a higher portion of your advertising budget towards them. Doing so helps capitalize on as many opportunities to spotlight them as possible.
#2: Drive traffic to the best child variation.
You don’t necessarily want to drive an equal amount of traffic to all variations. In order to be the most efficient with your Ad dollars, determine which child variation is the most popular (bestseller), and leverage it by driving traffic to it.
#3: Determine which SKUs have high potential or that have low margin impact.
Look for SKUs that have potential but are underperforming because you have not fully leveraged them through Amazon’s many advertising resources. Also, identify any SKU which has a low impact on your profit margins. Allocate more of your budget towards both of these types of SKUs so that you get maximum revenue generation from them.
#4: Determine which SKUs have low potential or that have high margin impact.
Regrettably, not every SKU’s advertising works (delivering revenue that justifies the ad spend to drive traffic towards it). Once you’ve identified which have low potential or that have a high impact on your profit margins, trim those SKUs’ budget allocation significantly to make your overall Ad spend more efficient.
#5: Determine “wasteful” SKUs.
These are the SKUs that are drastically underperforming (for example, 100% ACoS or higher). Certain SKUs don’t perform well with Amazon advertising. They eat into your Ad spend and bleed away your overall profitability. Those SKUs should be paused. Some of these SKUs might be underperforming in various Ad groups. Our Bulk Optimization tool, (inside of PPC Entourage), allows you to find SKUs across multiple Ad groups, so you can see where they are underperforming and pause them.
#6: Identify your seasonal SKUs.
If your business is primarily seasonal or has several SKUs that are seasonally-based (seasonal climate, holiday periods and major cultural events), be sure to ramp-up your advertising budget to account for your peak season period. Then, scale back ad dollars upon its conclusion.
#7: Identify high ticket SKUs.
Higher priced SKUs allow you to be more aggressive with your advertising. The higher priced SKUs give you the freedom to tolerate more clicks without a sale than lower priced inventory, where there is little leeway between realizing a profit or having it eaten almost entirely away by clicks that don’t convert.
#8: Budget properly to launch a new SKU.
Create a new budget allocation dedicated to launching a new SKU if possible. You don’t want to tap into your existing budget allocations because withdrawing ad dollars from those campaigns will hurt the overall performance of those SKUs.
#9: Keyword Boost.
Let’s say you are ranked on the top of page 2 for some really high search volume keyword, and you want to get to the bottom of page 1. Allocate advertising budget for Exact Match campaigns that target that keyword to boost it in order to get you to the bottom of page 1.
Whether you’ve recently launched your Amazon business, or you’re a seasoned entrepreneur, your business MUST be efficient.
If you are searching for other ways to make your business more efficient and profitable, PPC Entourage can help. Our intelligent seller tools (free trials) and management services can be the game changer you have been seeking to help you to increase sales and profits.
Our Mission at PPC Entourage is to give every seller the practical tools that are needed to…
- Be More Efficient with Your Advertising
- Be More Profitable on Amazon
- Make Your Brand a Household Name
Michael Zagare is a serial entrepreneur, a recovering physical therapist, and the founder of PPC Entourage.
Mike has an unquenchable thirst for knowledge in all things Amazon, and loves sharing that knowledge with other sellers to help them take steps towards personal and financial freedom.
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