As an Amazon PPC agency, we deal with all types of accounts, day in and day out. One of the biggest questions we face from our clients is the issue with their Amazon Ads budget depleting.
Whilst this feature has been around for a few years now, many people still don’t know that it is possible to keep up-to-date with your Sponsored campaign budget status with tailored notifications and recommendations that get delivered straight to your inbox.
This will help you keep your campaigns live for as much of the time as possible.
If your daily budget runs out during the day, your campaign will become paused and no more of your ads will show until midnight of the next day.
This means that you could miss out on valuable ad impressions and sales conversions through your Amazon Sponsored Ads.
The budget tool, however, keeps your ads running to maximize your sales opportunities.
How does an Amazon PPC Ad Campaign Budget work?
One of the most efficient ways of calculating your daily budget is to first consider your monthly or campaign-specific budget. Then you should allow for other factors such as the quantity of products and your starting bid.
When you have grappled with this data, you will be in a position to work out your daily budget.
Now your primary objective is to gather as much significant performance data as possible.
If you have, for example, 1000 products in your campaign, a daily budget of $10 would take a relatively long time to see clicks and the all-important performance data for each product. Hence, it is better to have a smaller, more refined group of products sharing a budget in a campaign.
Also, think about how your default bid will affect your budget. A default bid of $1 with a daily budget of $10 will yield a maximum of 10 clicks per day.
Another approach to budget calculation is to think about the number of clicks you would like to receive.
Then you can set your bid amount and maximum budget to reflect this and get as many ads appearing in search results as possible.
You need to know what works for you, and what doesn’t.
After the data has been generated, you will be able to review and optimize your campaigns to get as low an ACoS as possible and as many sales as possible.
Calculating your Amazon PPC campaign budget
Calculating your daily budget for Amazon Ads can feel like an impossible task when you first get started but you can break it down into a more manageable job by first determining your monthly or specific campaign budget.
With that decided, you’ll now need to factor in additional considerations such as the number of products or average bid amount to arrive at a realistic, affordable and sustainable daily budget.
Don’t forget, your default bid amount will also play a role in this decision. A default bid of $1 and a daily budget of $15 means you’ll be limited to just 15 clicks a day.
Another approach is to think about how many clicks you would like to receive and then work backwards from there to set a bid amount and your maximum daily budget.
It’s important to remember that your budget is not set in stone and you can revise it up or down as you see fit.
As your campaigns run and you are able to access real world data, you’ll need to review and optimize your campaign budget to arrive at the optimal ACoS while also maximizing sales figures.
Bidding strategy for auto vs manual targeting Amazon campaigns
Amazon’s ad dashboard gives you the choice of auto or manual targeting.
We recommend that you set slightly lower bids when choosing the auto option as those campaigns are more likely to receive a greater volume of impressions and clicks than manual campaigns.
Amazon auto targeting campaigns are more likely to receive more impressions and clicks than you are likely to receive from a manual campaign.
If you are using manual targeting, you can tweak your bids on a keyword level. The Manual-targeting reporting system will give you the estimated keyword bid needed for an ad to appear on page 1 of search results.
This is something you would need to take with a pinch of salt as we have managed to get away with paying far less than the recommended bid in the past.
One strategy can be to set your bids low initially and wait to see if you receive good traction, if you do, you can leave the bids and enjoy a low ACoS.
However, if your clicks/impressions are lower than anticipated, you can slowly increase bids up to the suggested amount.
Automated notifications will tell you when ad campaigns are running low on budget
To check out the real-time budget notifications, look at the top of the Campaign Manager page. This is the page where ad campaigns are created and managed.
From here, you can see at a glance which campaigns are out of budget or status is at least 80% of spend.
This information should be checked regularly to ensure that you have complete control over your advertising budget and campaigns are running efficiently.
Using account specific recommendations to optimize your Amazon PPC budgets
Amazon’s notification of recommended budget increases for each campaign could potentially enable you to get the most out of your advertising campaign.
These are based on your historical spend and Amazon’s predicted traffic levels.
When promoting your products on Amazon through sponsored Ads, specifically manual targeted campaigns, it is important that you allow your campaigns enough budget to have the flexibility to give all targeted phrases a chance to trigger your sponsored product listings.
This will allow you to determine which phrases convert best into sales.
It can sometimes be advisable to be aggressive and relatively nonchalant about campaign budgets on initial set up to allow all targets the potential to convert.
From this, you can take your highest performing targets and use them in hero campaigns which have higher budgets and ad spend but, typically, a lower ACoS.
Before adjusting your budget to spend more on Amazon due to budget limitations, we would recommend analyzing the search phrases that have caused the daily budget overspend on Amazon.
You may find that after day two of your campaigns running live that certain phrases use up most of your campaign’s budget.
These terms could then not allow other keywords you are targeting the opportunity to trigger your adverts and convert into a sale.
It’s at this stage you need to consider pausing the term/set of terms or moving them into their own campaign to better control their spend.
Ensuring that you have a good list of negative keywords and removing terms that take up most of the budget while not generating sales is the first place to start before increasing your budgets on Amazon.
It is also good practice throughout your advertising journey and should lead to you gaining maximum campaign efficiency by increasing your organic and sponsored rank on keywords/ ASINs that convert well.