George:
Welcome to the Clear Ads Podcast: Highway to Sell. You’re here with me, George Roberts, and Helen Robinson.
Remember to subscribe so you never miss an episode.
This week, we’re discussing the cannibalization of organic sales — how to evaluate your PPC and DSP spend and how to avoid eating into those valuable organic results.
As advertisers, it’s something you don’t want to overdo. It can hurt your gross profit and, ultimately, the money in your back pocket.
Helen, welcome back! It’s been a while since we’ve done one together — new voices, new format, let’s see if the listeners stick around.
Helen:
Thanks, George. No pressure at all.
George:
That’s a good start! So, this topic comes up all the time — “How can we improve sales without eating into organic ones?”
The first thing to consider is always your goal.
Because that determines how much you want to spend on advertising and how aggressively you’re willing to bid for those top spots.
Helen:
Exactly. We often see clients who appear in both the first sponsored slot and the first organic slot on a search results page.
They ask, “Do I really need to show up twice?”
And our response is usually — can you afford not to?
If you’re not in that top sponsored slot, a competitor will be. You’ll only ever pay for the click that takes the shopper to your listing anyway.
So yes, you might appear twice — but that’s prime real estate on Amazon.
George:
That’s a great point. Whether on desktop or mobile, those top spots are gold.
It really comes down to risk. If you pull back your ads to save spend, you might lose those positions — and that can seriously impact visibility.
Helen:
Exactly. It’s always a balancing act.
When we look at client accounts, one thing we track is reliance on ad revenue — the percentage of total sales that come from advertising.
When I first joined Clear Ads, the average was around 42%. Now, after running over 50 audits this year, it’s closer to 60%.
That’s a big increase — and it tells us many brands are overspending on terms where they could have eased off, while neglecting others that deserve more focus.
George:
Yes — and it really depends on the brand, budget, margins, and goals.
The key is to pull back on the terms where you’re already converting well organically.
But if you start to lose ranking or sales momentum, that’s when you turn the tap back on.
It’s one of the strengths — and curses — of PPC. You can’t “set and forget.” It needs constant evaluation.
Helen:
Agreed. You need to decide early — is your goal aggressive growth or profitability?
If you’re aiming for growth, then yes, appear all over that first page. If your conversion rate is strong, that visibility will also boost organic ranking.
But if you’re getting clicks without conversions, that’s a signal to rethink. Maybe you should compete more on product pages or focus on organic optimization instead.
George:
And you can test it. Try pulling back your ad spend slightly and see what happens to your ranking and sales.
But don’t wait too long — you’ll know within a few days if it’s affecting your visibility.
Helen:
Exactly. It’s all about testing and learning.
And it helps to separate branded and non-branded campaigns from day one.
We still take over accounts where they’re mixed, and it’s messy.
Branded terms usually have much lower ACoS, while non-branded ones are where you fight for new customers. If they’re bundled together, you can’t optimize properly.
George:
Yes — separate them and negate branded terms from your non-branded campaigns so they don’t overlap.
I also get asked a lot, “What should our ACoS be for branded terms?”
It depends. Established brands with repeat customers can afford to pull back more, especially for consumables with a high lifetime value.
But for smaller or newer brands, pulling back too hard could mean losing those repeat buyers.
Helen:
That’s where LTV tracking tools come in handy — like Nozzle or Amazon Marketing Cloud.
They can help you understand the lifetime value of a customer.
For example, if you know 50% of February’s buyers come back again, you can calculate how much you can afford to spend on that first sale — even if it looks high initially.
George:
Exactly. And if you’re using Amazon Marketing Cloud or a tool like Sellible, you can track that LTV data directly.
You might realize you can afford a higher initial ACoS — as long as you’re bringing in quality, returning customers.
But it’s all about data-driven decisions. Don’t assume; measure.
Helen:
And gross profit is the real metric that matters.
Sometimes a 2% reduction in TACoS might actually mean less money in your pocket over a year.
So it’s not just about cutting costs — it’s about understanding how those changes affect profit.
George:
Well said.
Another important point — look at your data holistically. PPC and DSP only show part of the picture.
You need tools that integrate everything — including your cost of goods — to truly understand your margins.
Helen:
Exactly. As the industry evolves, more data tools are becoming affordable.
Five years ago, most sellers couldn’t tell you their lifetime customer value. Now, it’s accessible — and it’s helping brands make much smarter decisions.
Because, realistically, after your inventory, ads are your biggest expense. You have to know whether they’re putting money in your pocket — or Amazon’s.
George:
Speaking of Amazon… let’s touch on DSP (Demand-Side Platform).
People often ask — are DSP sales cannibalizing PPC or organic?
Helen:
Good question. There’s been debate about how accurate Amazon’s DSP attribution data is, but tools like Amazon Marketing Cloud and platforms such as Exponea (XPN) are improving clarity.
They let us track unique users and follow the full customer journey — from first exposure to final conversion.
And while Sponsored Products remain the foundation, DSP helps brands reach new audiences and block out competition.
George:
Exactly. PPC pulls shoppers in when they’re actively searching, while DSP pushes your ads to potential buyers who might not be looking yet.
It’s great for retargeting, reminding people of your brand, or prompting repeat purchases — especially for consumables.
And since DSP works on a cost-per-mille (CPM) basis, you pay per thousand impressions, not clicks — so you can reach a wider audience for less.
Helen:
Right. And with the merchant token update, advertisers can now link their DSP and Seller Central data to see more accurate attribution.
That’s been a big step forward — we can now see whether DSP actually influenced a conversion or not.
George:
And we’re seeing that DSP often plays a “last-touch” role — the reminder that nudges someone over the line.
If you’re not there, a competitor will be.
It’s a more top-of-funnel approach, but when done right, it complements PPC beautifully.
Helen:
Yes. And even if a shopper doesn’t click, they’ve seen your ad — subconsciously, it stays with them.
It’s like those classic car ads we all remember from childhood. You might not buy at the time, but it sticks in your mind.
George:
Exactly. And while some brands complain about DSP, that’s usually because their audience targeting wasn’t set up properly.
When executed well, DSP can deliver ROAS equal to or better than PPC — but it’s harder to scale and requires careful audience management.
Helen:
And sellers need to remember — Amazon is a pay-to-play platform.
Profit margins aren’t what they used to be, but the trade-off is access to massive traffic.
You’re paying to be visible — and visibility drives growth.
George:
Exactly. But chasing sales at all costs can destroy profitability.
Sometimes, it’s not about spending more — it’s about optimizing what already works, or introducing new, better-performing products.
Helen:
Completely agree. The platform’s getting more competitive, but also more intelligent. Sellers who adapt, analyze, and test — they’ll continue to thrive.
George:
Alright, let’s wrap it up with a quick recap.
If your ad reliance is increasing — but you’re not intentionally scaling — that’s a red flag. It could mean your CPCs are rising or competitors are getting more aggressive.
Helen:
Exactly. Test by pulling back slightly.
Reallocate that spend toward products that actually need the visibility. If rankings or sales drop, reintroduce spend gradually.
Monitor your branded term bids too — people searching for your brand will likely find you anyway.
But don’t pull back completely, or competitors will move in. Aim to keep branded ACoS around 15% or lower where possible.
George:
And for large catalogs — be selective. Focus branded campaigns on your best-selling or highest-converting products.
Finally, use your Search Query Performance Report and Brand Analytics to track conversion share and identify where you can grow without cannibalizing.
Helen:
And if your category is already saturated, focus on maintaining ranking profitably instead of chasing unsustainable growth.
George:
Exactly.
We hope you’ve enjoyed this episode. If you know someone struggling with over-reliance on ads, share this podcast with them — or get in touch with us at clearads.co.uk.
Helen:
And if you’ve got questions about anything we covered today, message us on LinkedIn — I’m Helen Robinson, and this is George Roberts.
George:
Thanks for listening, and we’ll see you in the next episode.
Helen:
Bye!
