From Sponsored Products to Display Ads, Amazon has a wide range of advertising tools to get your products seen – helping you reach the right audience at the right time. But ad performance is determined by a number of factors and the reality is, there are things you can control and things you can’t.
When used in the right way, and measured with the right criteria, Amazon Advertising is absolutely worth your time. So we’re here to answer the BIG QUESTION everyone’s asking:
What’s the timeline for success with Amazon ads? And what’s the best way to make sure I get the best results? Read on to learn how we navigate Amazon’s different advertising solutions, and what strategies to use to turn fruitless campaigns into success stories.
What’s a realistic timeframe for Amazon advertising success?
It’s important to set expectations from the get-go when it comes to PPC. In the dynamic realm of Amazon PPC, patience isn’t just a virtue; it’s a strategy. At Seller Presto, we often encounter the following concerns:
“I’ve been running my Amazon ads for weeks with minimal returns – should I continue?”
OR…
“After investing £100 and only recouping £80, I paused my campaigns.”
Now, what I’m about to say may not be what you wanted to hear. But here lies a pivotal lesson…the path to Amazon ad success is NOT measured in days or mere monetary terms.
While I understand the desire for a quick return, an ad strategy actually delivers the most benefit to your brand when you play the long game.
Firstly, let’s consider the downsides in judging an Amazon advertising campaign based purely on the time the campaign has been active:
- Every industry is different: there are varied consumer behaviours, seasonal trends and competitive landscapes across different industries and sectors. Having a set timeframe for all PPC campaigns fails to account for these nuances, making it an unreliable measure of success.
- Optimisation takes time: successful PPC campaigns often need continuous tweaks and fine-tuning. Changes in keywords, ad copy or targeting improve long-term performance but may not get you instant results. Relying solely on the duration of the campaign overlooks the iterative nature of optimisation strategies.
- Missing key learnings: Amazon ads require a learning phase to gather data – and this data is what helps you optimise your ad delivery. Judging a campaign’s effectiveness based on early performance means you could be missing the potential for your ads to excel after being fine-tuned at a later stage.
The right markers for success (and a typical scenario)
I know what you are thinking…..none of this answers your question. The truth is, there is no given timeframe as to when Amazon Advertising will work. This is because every business/product is different and it’s important to look at ad campaigns as a long-term exercise.
If you want to really understand how effective your Amazon advert is, focus instead on the following:
1. Clicks-per-keyword
2. Conversion rate
By using these markers, you will get a much better understanding of what Amazon advertising can do for you and your business. Let’s delve into this theory a little deeper…
Scenario: The £50 budget dilemma in a two-week campaign with 10 keywords
In this scenario, the seller creates a campaign with a fixed budget of £50 to be spent over two weeks. The campaign targets 10 keywords, each with a cost-per-click (CPC) of £1. The product price is £20. At first glance, the budget and timeframe might seem reasonable, but a closer look reveals the inherent challenges in relying on these parameters alone…
The main issue? Inadequate sample size for each keyword
With 10 keywords and a total budget of £50, each keyword is allotted a mere £5 for the entire two-week period. The £1 CPC further compounds the issue, as it allows for only five clicks per keyword within the budget constraint. This limitation means that it’s not possible to garner a statistically significant sample size to assess the performance of each keyword effectively.
At the end of the campaign, the account has generated two sales (£40) but spent £50. The seller quickly deems the test to be a failure and abandons Amazon ads as a future marketing strategy.
Why is sample size so important?
Having a large enough sample size is key because it’s more truthful. In the context of a CPC (Cost-Per-Click) advertising campaign, each click on a keyword serves as a data point. So the more clicks you have, the more data you have. And the more data you have, the more accurate the story being represented to you. This is what we call statistical significance.
Statistical significance is crucial for drawing reliable conclusions. A larger sample size gives you better insights by minimizing the impact of random variations and ensures that observed trends represent the behaviour of target audiences in an accurate way.
What about clicks with zero conversion?
So what about clicks that don’t convert? How many clicks should you allow before calling it a day? Suppose you typically experience a 10% conversion rate. If, after the initial 10 clicks, you haven’t secured a conversion, there’s no need to panic. It’s advisable to withhold judgment until a specific keyword accumulates 30-35 clicks without yielding a conversion before considering the possibility of taking an action on the keyword.
In the scenario where the seller assessed the campaign as a failure due to generating £40 in revenue from a £50 spend during the 2 week duration, it’s crucial to emphasize that evaluating the campaign’s success or failure solely on the budget and/or campaign runtime is a poor strategy. This is particularly true in the context of CPC (Cost-Per-Click) campaigns where individual keywords contribute differentially to the overall performance.
Diving deeper into the campaign, the two conversions at £20 each came from the same keyword which had 20 clicks at £0.50 per click. Therefore, that particular keyword generated £40 of sales from only a £10 spend. Suddenly the campaign can be seen in a different light as a success from what was initially observed.
What should be done when a keyword has had 30-35 clicks? What actions should we take?
There are a number of actions that we can take when a keyword hits the required click threshold:
1. Keep the keyword bid the same
2. Lower the keyword bid
3. Pause the keyword
Deciding the right course of action depends on your target ACOS in terms of what is profitable. But another thing to keep in mind is that the average ACOS on Amazon is 30% so that’s a good target to initially meet at a keyword level. Here, we break it down by scenarios to help you understand the decision-making process further…
1. Keeping the keyword bid the same
Scenario: If a keyword has reached the required click threshold, and the campaign is delivering satisfactory results in terms of conversion rates, sales, and profitability, the advertiser may choose to maintain the current bid for that keyword.
Rationale: Keeping the bid the same signals confidence in the keyword’s performance. If the keyword is consistently driving valuable traffic and conversions within the desired cost parameters, maintaining the bid allows the campaign to continue leveraging the keyword’s effectiveness. In this case the campaign can be considered to be a success as at least one keyword is generating profitable revenue.
2. Pausing the keyword
Scenario: If a keyword has reached the required click threshold, but has had no sales, then the advertiser may choose to pause or temporarily stop bidding on that keyword.
Rationale: Pausing a keyword is a decisive action taken when the keyword is not contributing to the campaign’s goals. By pausing the keyword, the advertiser conserves budget and refocuses resources on more effective keywords, improving the overall efficiency of the campaign.
3. Lowering the keyword bid
Scenario: If a keyword has met the click threshold and has generated sales, but is not delivering the expected return on investment, an advertiser may decide to lower the bid for that particular keyword.
Rationale: Lowering the bid is a strategic move to control costs while still maintaining visibility. This action is often taken when the cost-per-click (CPC) is too high, and the keyword is not generating sufficient revenue to justify the expense. By reducing the bid, the advertiser aims to create a better between cost and return. It’s crucial to acknowledge that achieving the target Return on Ad Spend (ROAS) might be challenging initially, especially during the learning phase. Rather than making drastic bid changes, advertisers can consider gradual adjustments. Monitoring the impact of smaller bid modifications allows for a more controlled approach to bid management. A great tip is to try reducing the bid by 10% until it has had another 30-35 clicks and then review again.
If the Advertising Cost of Sales remains excessively high despite bid adjustments, it indicates that the advertising spend is not generating a proportionate return in sales revenue. A high ACoS may suggest that the keywords are not effectively targeting or resonating with the intended audience or the CPC may be excessive in comparison to the product’s margin.
It might also be an indication that the choice of keywords was not right for the audience’s intent or the product’s positioning. This is where a reassessment of keywords becomes the next action…
The wrong vs. the right keywords
Not sure whether you have the right keyword selection for your campaign? Here are two indicators that the wrong phrases are being used:
- Low relevance and click-through rates (CTR)
Keywords that fail to generate engagement (reflected by low CTRs) may indicate a mismatch between the phrases and user intent. Low relevance can result in a lack of interest and interaction with the ads. However, be aware that this could also be down to a poor main image or bad pricing strategy.
- High click but low conversions
If keywords gain substantial clicks but fail to convert into actual sales, it could mean that audiences aren’t genuinely interested in the product. This misalignment could be attributed to keyword selection, but again could also be caused by other things such as images and having a poorly crafted product details page.
Considerations for reassessment:
If after making changes, your keywords are not delivering results or profitable sales, go back to the drawing board and conduct comprehensive keyword research. Identify keywords that more accurately capture the target audience’s search intent and align with the product’s unique selling propositions.
So here’s the bottom line…
To answer the question “How long does it take for Amazon advertising to work?” we need to accept that different products and markets will see varying rates of customer engagement and sales conversion over time. So my final piece of advice is to lay the groundwork, focusing on learnings…
A reliable measure is to gain a statistically significant number of clicks at the keyword level after bid adjustments have been made. This method accounts for variability in consumer behaviour and gives you truer performance data. By targeting a sufficient number of clicks and optimising bids before judging a keyword’s effectiveness, you can create future campaigns in a data-driven way.
Another useful tip:
Once you reach the designated click threshold for a keyword, it’s time to evaluate and take strategic action. This decision should align with your target Advertising Cost of Sale (ACOS), ideally around 30%. If your keywords aren’t meeting this target, consider reducing bids incrementally, say by 10%, monitoring the next 30-35 clicks to see if the adjustment improves performance. Should the keywords continue to underperform without profitable conversions, it may be time to pause and seek alternative keywords that could yield better campaign results or focus on other strategies to increase sales such as listing optimisation.
Need help with your Amazon Advertising strategy? We know that getting keyword research, bids and adjustments right can be a minefield. At Seller Presto, we can help. As a finalist in the 2023 Amazon Advertising Partner Awards (Challenger EMEA category), we are best placed to support Amazon sellers in their growth journey.
If you’d like to see our work in action, take a look at our fantastic success story with Lean with Lilly, introducing a new product into a challenging and highly competitive market.