Before you run an Amazon Sponsored Ad campaign, you’ll want to ensure that you are prepared. Here’s a quick check list on how to prepare for Amazon Sponsored Ad campaigns:
7 Point Check List for Amazon Sponsored Ad Campaigns
Optimise your listing
Revisit your product titles, consider adding additional images, revise your keywords, create feature rich bullet points, and tailor your product description to make it appealing – this is especially important if you are running a campaign around holiday periods – there’s no point describing your product as a great Christmas gift in the run up to Valentines day!
Avoid promoting Add-On Items
If you include Add-On Items in your Amazon Sponsored products products campaigns then you’re promoting a product which already has a barrier to sale – buyer can only purchase if they also purchase other products to increase their basket size. Consider either excluding Add-On items from your campaigns, or change your product formats to multiples to increase the order size so that the product will ship as a single item purchase.
Attract product reviews
Product reviews have an impact on conversion rates so the more reviews you have on a product the more successful your campaign will be. There are a number of automated services available to encourage buyers to leave reviews for your products. If you are about to promote a product with few or no reviews, consider a review solicitation campaign prior to running your Amazon sponsored ad campaign.
Win the Buy Box!
Your campaign will only run if you are winning the Amazon Buy Box. If you’re not winning the Buy Box, at least a proportion of the time, then your campaign simply won’t be displayed. Opting in to FBA can assist with this, as can price and your seller metrics.
Ensure you have deep inventory
Make certain that you have sufficient stock for the products you’re including in your campaign. Ideally you will have had the product in stock on Amazon for at least 30 days and have stock in reserve or on the way to replenish as it sells. If you are using FBA ensure that you ship well in advance – Amazon like products with a high sell through rate but if you constantly run out of stock then your campaign will be less effective.
Find the best time to advertise
Tailor your campaigns for the times of the day, weeks and months when you know that your buyers will be most active. For instance, if you only ship to the UK, then there’s little point running campaigns in the middle of the night. You may see more success for garden related products over the weekend then at the start of the working week. You may wish to pause campaigns for school related products at the start of the summer holidays but step up your exposure towards the end of the holidays as parents prepare for the new school term.
Know your margins and ACoS
You’ll need to know your product margin after the product cost, storage and fulfilment costs, tax, Amazon fees and your overheads. Then you can calculate your ACoS, your Advertising Cost of Spend.
The ACoS formula is calculated as your total ad spend divided by your total sales from the ad campaign
ACoS = Total Ad Spend/Total Ad Sales
The lower your ACoS the higher your profitability from the campaign, but what you don’t want is for your ACoS to be higher than your product margin after all costs are taken into account. There may be times when you’re willing to break even, or even to run your ACoS at a loss, for instance if you’re launching a brand new product on Amazon, but at all other times there’s little point running a campaign and selling at a loss.
If your ACoS is very low, you may wish to increase bid rates to increase sales. If your ACoS is very high then consider lowering your bid rates to preserve margin