Brand Fortress HQ: Amazon FBA Success Strategies
Welcome to the Brand Fortress HQ Podcast, the ultimate resource for mastering Amazon FBA success. Dive deep into the world of e-commerce with your hosts, Jon Stojan, Mike Kaufman, and Matt Atkins—three seasoned Amazon brand owners who have seen it all and are ready to unveil the secrets of their success.
Your hosts each and every week are Jon Stojan, Mike Kaufman, and Matt Atkins. Jon is a former predictive analyst for the Air Force and brings his analytical prowess to the e-commerce battleground. After establishing his own 6-figure brand on Amazon, he founded First North Marketing, a beacon for brands aiming to conquer the Amazon marketplace.
Mike Kaufman is an e-commerce pioneer, having been navigating the online sales sphere for over three decades. His expertise has not only led to the creation of a mid 7-figure brand on Amazon but also birthed invaluable tools and resources to bolster other aspiring brands.
Matt is the jack-of-all-trades in the e-commerce arena, from building a 7 figure meal prep brand, multiple Amazon brands, coaching new brand builders, to helping brands of all sizes grow at Canopy Management. His passion lies in fostering a community of entrepreneurs, offering them the wisdom and connections needed to thrive.
Join us for Tactics Tuesdays, where Jon, Mike, and Matt dissect the real-life strategies propelling their own brands and companies forward. Plus, tune in every Thursday for enlightening interviews with the brightest minds in FBA—transparent leaders and business owners who are shaping the present and future of e-commerce.
With two episodes every week, the Brand Fortress HQ Podcast is your stronghold for insider knowledge, innovative tactics, and inspiring stories. Whether you’re an established seller or just starting your FBA journey, our hosts are here to guide you through the intricacies of the Amazon marketplace. Unlock your brand’s potential and build your own fortress with us at Brand Fortress HQ.
Brand Fortress HQ: Amazon FBA Success Strategies
052: Tactic Tuesdays: Mastering Advanced Amazon PPC Strategies
Can mastering Amazon PPC strategies catapult your online sales to the next level? Tune in as we uncover advanced tactics that top performers use to dominate the marketplace. In this episode, Matt, with his wealth of experience analyzing hundreds of advertising accounts, shares powerful insights on why single SKU campaigns and separating match types are essential for achieving clarity and scalability. You’ll also learn how robust naming conventions can simplify campaign management, making it easier to filter and analyze performance as your number of SKUs grows.
Navigating the complexities of PPC software is no small feat, but what if there’s a way to balance automation with strategic human oversight? We dissect the effectiveness of semi-automated approaches, leveraging tools like PPC Ninja and Take a Metrics, and emphasize the importance of setting proper rules for automation. Matt also discusses the strategic significance of exact match keywords, revealing their benefits, potential costs, and how to balance different keyword match types to optimize your overall conversion rates.
Prime Day can be a goldmine, but only if you play your cards right. Discover how strategic adjustments in your advertising budgets can maximize profitability during this high-traffic event. We also explore why focusing on sponsored product ads is crucial despite the allure of newer ad types. Finally, we highlight the importance of integrating PPC with your overall business strategy, ensuring that your efforts aren't in vain. Join us for an episode packed with actionable insights and strategies that can transform your Amazon advertising game.
🚀 Transform your brand on Amazon by building a powerful customer list with the After Purchase Funnel Blueprint course. Click here to get the full course for free.
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All right. So we are live, and today we're going to be talking about proven Amazon PPC strategies for top performers as a part of this Tactics Tuesday. Welcome everyone to the podcast and also welcome anyone who is joining us live. This is a topic that we wanted to talk about because, especially we're recording this actually on the beginning of Prime Day PPC is one of those things that is ever-changing. The beginning of Prime Day PPC is one of those things that is ever-changing, and so we really wanted to tackle this topic and provide some principles that are going to be important and useful for brand builders, no matter what stage you're at that are listening to this. So with that, matt, I'm going to turn it to actually, if you want to start, maybe a couple of things that you've learned in the last year or so as far as PPC, and maybe some common misconceptions that you think people have or mistakes that sellers make when it comes to PPC.
Speaker 2:Yeah, I would say so in my role in working in the agency space. I've probably analyzed three 400 advertising accounts over the course of the last four years. So I mean, I would say that the very first thing that most people I don't want to say get wrong. There's more than one way to skin a cat, especially in the game of Amazon PPC, but I think structure is one of the first ways that people get things wrong.
Speaker 2:I personally I don't know how you guys feel about this, but I always have single SKU campaigns first off and foremost. I also keep all of my match types separate in campaigns. Also, it just for me makes it easier to be able to isolate a match type because they perform differently. So I would say structure is probably the biggest thing in terms of things that people could do better, sellers could do better and, in my opinion, when you have the right structure, when you have the right foundation to start with, it allows you to scale a whole lot easier and it also makes the data a whole lot more clear, because you know that. You know we know that exact match converts differently than broad match and it's less. You know the CPCs are different as well. So when you get those into separate campaigns, those match types into separate campaigns. It allows you to scale and and adjust based very specifically on that match type. So I'd say that's probably the biggest thing that I see is is just the structure of the campaigns could be a whole lot better.
Speaker 1:Yeah, that's a great point is that, I mean, if you start out with a good structure, and I think it comes down to not only your match types but also even something as simple as naming conventions.
Speaker 1:So we use both video and image for sponsor brand quite a bit now, especially with brands that are more mature, and just having that breakout of, you know, putting video in the campaign name makes it so much easier to know. Like, okay, are the static images that we have or kind of the carousel image ads that we have, are those outperforming the video or is the video actually doing a lot better in telling that brand story? And it really depends on the brand. But it's important to know like which one is having a bigger impact, either video or still images. And that's just kind of one kind of micro example of why having a good campaign structure helps you manage your account, especially once you start getting, you know, numerous SKUs in there. I mean, it's one thing if you only have one, two or three SKUs, but once you start getting 10, 20, a hundred SKUs, it can get pretty complicated pretty fast if you don't have a good structure.
Speaker 3:Well, in the naming convention too. I think one of the things that's nice about that is that, whether you're viewing your campaigns within the actual sponsored ads console or whether you're downloading the reports or viewing them in some other platform, if you really have a good naming convention where, let's say, every important aspect about that campaign is detailed within the naming convention. So, in other words, is it video or image, you know. Is it sponsored products or sponsored brands or sponsored display, you know. What SKU is it? What match type is it? Is it exact broad phrase auto? You know all of those things broken out. Sometimes it can make for somewhat of a long campaign name, but at the same time, it makes it really easy when you're filtering. You know so, whether, again, whether you're in the console on Amazon or you're just viewing it, as you know, as a downloaded spreadsheet or something, if you can filter and sort and search by either you know SKU name or product name, you know so, like, for instance, we sell pool poles, we sell pool nets, we sell a brush, so we could even have, if we wanted to have it by a product type, you know we could have pole brush net, you know, or something like that, so that I can search by any one of those at any given time where I can search video, or I can search, so that I can search by any one of those at any given time where I can search video, or I can search image, or I can search auto, and then I can get all the campaigns that are related to that particular search and see how they're comparing. So the naming convention is pretty important there.
Speaker 3:But I would also say, if you're going to use naming convention, be careful that you're being very exact about using it exactly the same way every time, so you can't have poll in one campaign and then polls in another campaign, or you know like, be very careful. In fact, it would even be useful to set up a spreadsheet where you had it set up, so that you choose, like anytime you're going to set up a new campaign. You choose okay, what's the SKU, what's the type, is it sponsored brand, product, you know. Display, is it? You know, choose all the different things. And then it spits out the campaign name and you just copy the name and paste it, you know, in when you create the new campaign. That way you can't screw it up, you know, because it's really easy to mistype something or things like that and then all of a sudden now, anytime you search for that, you don't actually get the campaign that you think you're getting.
Speaker 1:Yeah, that's a good point and that actually connects really well to one of the other things that I want to make sure that we cover before we got too deep, which is, you know, one of these. I think one of the biggest mistakes that's being made out there, and kind of you know what I would call Amazon lore, is this concept, and a lot of it comes from software automation for Amazon PPC, where you know, kind of this. The conventional wisdom is, let's say, that you've got a keyword that you notice is working in an auto campaign that converts Well, you know, then the conventional wisdom is after it's got a couple of sales, we want to move that over to. You know an exact match, and the reality about it is is that you can really be running both at the same time and they have different purposes. And not only that, but you know, say you create that exact match campaign and it's got 10 keywords in it that are also performing Well. Again, that typically what the software does and kind of conventional wisdom is take that hero keyword, if you will, and put in a new campaign.
Speaker 1:The problem with that is is that there's a certain amount of kind of essentially randomness.
Speaker 1:That happens anytime you create a campaign and there's weight to campaigns that have been around for a long time, that have historical data to them.
Speaker 1:So that's why you know a couple of things.
Speaker 1:Is you know, if you're looking at, hey, I need to redo, you know a product line, or if you're looking at redoing your whole account, why you shouldn't create all your campaigns from scratch? You're better off kind of modifying and rebuilding the campaigns that have been successful in the past as opposed to just deleting them and creating new campaigns. And so with that, you know, one of the things that we've discovered that has worked really well for us is, rather than kind of migrating those hero keywords into new campaigns, keep them in the campaign that they're already working in because they've proven a certain result in there in order to be profitable, and then take the other keywords that maybe they're doing okay, maybe they're not doing well at all, and move those into the new campaign, because then you're not rolling the dice with the keywords that are working for you, that are those quote unquote heroes, and it gives you the opportunity then to test those other keywords that, hey, when they're getting a bigger portion of the impression share in the budget, do they actually perform better, and sometimes they do.
Speaker 3:Well, and also there's a certain amount of value in that.
Speaker 3:You mentioned kind of the randomness of how it can, you know, sometimes function and since the historical data is what Amazon kind of uses as part of its algorithmic, you know, determination for whether they're going to show you or not show you, what happens is when, if you've got keywords that are not performing well in one campaign and you now move them to a new campaign whatever historical data Amazon had that for some reason might have been affecting those keywords Like there's times we all know this to be true there's times you have keywords in a campaign and you know they're good, they're good keywords for your product.
Speaker 3:Like there is no reason that those keywords should not be performing well and for whatever reason, at least from an ad basis, they don't perform and you don't know why. And you can take those and move them into a new campaign and all of a sudden, now that they're in that new campaign, now they start to produce and it's because whatever historical data Amazon was using, for whatever reason, it went south. Like you threw those keywords in that campaign, whatever happened up front, it went south. And now Amazon has that data and it's like, no, we don't like those keywords. As soon as you shift them and all that historical data goes away, you'll find sometimes you place those keywords into a new campaign and all of a sudden they become a good keyword for you where they weren't before.
Speaker 1:Yeah, absolutely. And I think that that's again going back to the software piece of it. And this is why this, I think, is so important, because I feel like for years we've been promised this kind of automated solution, an easy button that you could just tap. It would automatically, you know, manage the accounts effectively or the campaigns effectively down to, you know, the CPC level. The reality of it is is that, at least from everything that I've seen right now is you know, you want to take kind of a semi-automated approach is what we find effective where, yeah, software is great at crunching numbers and telling you like, okay, here's what your, you know predicted ACOS is and you know data on, here's how many impressions you get with, you know, this cost per click versus that cost per click and those types of things.
Speaker 1:But it does take a person in the loop to kind of make those decisions from a strategy level of you know which keywords should I start, move where to create new campaigns, because a lot of the automated software is going to say, hey, this keyword is working, create a new campaign for this keyword and, like we just talked about, that's pretty much the opposite of what you want to do.
Speaker 1:And then, in addition to that, you know there's a lot of nuance with that of you know, in increasing and decreasing both your CPCs on a regular basis but then also your campaign budgets.
Speaker 1:That I think is really hard from a structural standpoint to get right if you're relying on a software to do 90% to 95% of the work for you.
Speaker 1:I know we personally use PPC. Ninja Ritu we've had her on the podcast does a fantastic job with that and one of the reasons why we like that solution so much is because it does a great job of providing that kind of the best of both worlds, if you will, because there is a component in there where you can set up the parameters to say here's what my goals are for these campaigns or the account, and then it'll show you what the automated kind of recommendations are for you know bids and budgets and that type of stuff, and you can, you know, accept all, reject, all, accept. You know you can pick which ones you want to accept and kind of filter through there and I think that that kind of gives you the best of both worlds where it's efficient from a management standpoint but also allows you to filter out those things that maybe are a little bit more nuanced or are outside of kind of the standard process.
Speaker 2:I've used three or four different softwares for my own brands and then I've seen the result of other softwares in analysis that we've done. What I can say is that bid optimization, I think, is something that software automated software can be really good at. Like you said, john, it's math I mean figuring out what to adjust your bid to is math. There's one tool I take, a metrics that I actually currently use. They crunch so much data I don't know how much ad spend they have access to over the course of a month from all of their clients, but they use that data to feed an AI that does a predictive analysis on what it thinks that the conversion rate is going to be at different times throughout the day, based on current data, yesterday's data, all the way back to a year ago data. So I think that having some sort of especially now in the days of AI where it can crunch a massive amount of data bit optimization is something that I think can be automated and I can trust software to do the bid optimization and I'm not that concerned about going in and checking that you don't. Looking at the high level, metrics is sufficient in most cases but, like you kind of alluded to, john, where I think software isn't good at and where I think there has to be a human in the loop and I've seen in my own brands where it's gone run wild is like keyword harvesting.
Speaker 2:Keyword harvesting I think is hard for software to do because I think having software make a decision based on a conversion to graduate a keyword to a manual campaign I mean I sell in the barbecue accessory space and if I get a curiosity click from a pool tool and someone buys my heat resistant glove that was searching for a pool rake I don't want to show up, I don't want to target pull rake in any of my campaigns. So actually one of the softwares that I had, I didn't have any sort of rules at all set on what kind of you know what keyword harvesting rules there were, like I want at least three conversions to happen or four conversions to happen before I graduated. But I kind of in that I got trigger shy and in that I don't let software Take a Metrics. What I use now has the option to automatically bring or converting keywords into manual campaigns. I have that completely turned off because I think that in a lot of cases humans are going to do that.
Speaker 2:Me as the human knowing my brand and knowing my consumer, can think of keywords, that kind of tangential type of keywords that I might want to show up for. I just don't think software is great at that. So I think software has its place. I think bid optimization is where you can use it effectively as long as you have the right rules in place. But I think there always has to be a human in the loop.
Speaker 3:Yeah, I think too. You know, like the, the keyword harvesting thing is definitely difficult, and this is even difficult even even if you take the automated piece out of it and you're not talking software but you're just talking agencies. You know that that are you know when, when you're not running it internally as a company and you're having an agency do it. That's not to say, don't have an agency, but make sure that you're having good conversations with them and that you're paying attention to things, because, for instance, within our category, there's a number of keywords that at first blush if you don't know the category they look like they are extremely targeted to what we sell and in reality they are extremely untargeted to what we sell. So, for instance, a good one would be a swimming pool net. Now we sell pool nets for cleaning the pool. The problem is is that what we have found over time is that swimming pool net is although occasionally people are using that phrase to search for a net that you would clean the pool with the majority of time when they're searching for that, they're actually searching for a net that you would clean the pool with. The majority of time when they're searching for that, they're actually searching for a net that you put over the pool to keep leaves out. To keep leaves and debris out of the pool, which is a totally different product, right?
Speaker 3:Well, every automated tool and every agency that we've ever tried, you know, has tried to place those keywords into our campaigns. Because, oh, we got a conversion on it, you know, and like all of a sudden, we got to pay attention because it looks very relevant. Turns out it's not, and so I would just say you know your brand best. Make sure that you're either turning off harvesting if it's automated, because I think there's going to be a lot of situations like that, or when you're dealing with an agency, you need to make sure that you're having conversations about that. You know, like those specific keywords seem like they're relevant, but they're not. This is why you know that sort of thing and just kind of keeping tabs on that because it happens, and then you end up spending a boatload of money on a keyword that you know really never should have been in a campaign at all.
Speaker 1:Yeah, a couple of things there. I mean any, I would say. You know, you know, no agency is perfect, but at the same time, any agency that's worth their salt is going to do a couple of things to make sure that that doesn't happen. Or at least this is what we do is, first of all, you know, before, if we're looking at a seriously looking at a keyword like that, we're going to actually look at what the search terms are for it. And in those search terms, if we see that the first 10, 20 products are a pool that goes over you know, or a net that goes over the pool, as opposed to you know something or you know what you're selling, then obviously you know that's what people are buying, which is why Amazon is ranking those products organically a lot higher for it. The other thing is is that you know that's why you keep tabs and you know do keyword adjustments, do keyword adjustments. And you shouldn't be spending boat loads of money on something like that, because you should be able to tell and now it depends on conversion rate within generally 10, 20 clicks, whether you're headed in the right direction or not. So that way you're not burning a whole bunch of money on keywords that aren't going to work.
Speaker 1:But in addition to that, what I would also say is there are a lot of keywords that can be like that and I think that where they fit really well into what we call a catch-all campaign, which is basically kind of these low volume keywords that we put a low bid in for that maybe you only get a sale once a week, once a month, doesn't matter.
Speaker 1:Once a week, once a month doesn't matter. But if I'm only paying, you know if I'm paying, you know, just to make the extremes, you know, say I'm paying $10 a click for that. You know that pool term, that doesn't convert very well for the product. Well, in order to be at the very top of the page, that's a problem. You know, if I'm not converting well, well, but if I'm paying 50 cents and the only people that I'm really going to show to are the ones that are diehard, you know, looking at researching, you know pool stuff and it might be a good fit for them Well, that keyword I can still get a good ACOS on at that 50 cents and drive some incremental sales by using a catch-all campaign. So that's another great strategy that people can use.
Speaker 3:Well, it's good for auto too.
Speaker 3:That similar strategy works very well. We've had a campaign that we've run for years. To be honest, we haven't really changed it much. Occasionally we adjust the bid and whatnot, but it's basically a low-bid auto. That's just a catch-all, like we just run it, and we just run it at a really low bid and let Amazon just throw whatever they want at it. And because the bid is so low, our ACOS on that is incredibly good and we actually get quite a lot of sales out of that, more than you might think. Just because we're letting Amazon kind of go wild with it to some degree, I'm just saying look, find whatever sales you can grab for us.
Speaker 1:If we can get it for that price, I'll do that all day long. Well, I think that's an important point too is that I feel like the Amazon lore out there is that the bulk of your sales should be coming from exact match and in a perfect world, everything should eventually migrate to exact match. So you're so, you know, narrowed in. The reality of it is. This is that you know, when you look every ad type and you know campaign type has its own pros and cons, and so, if we look at it, you know, talk about auto campaigns.
Speaker 1:Hey, if I can add incremental sales that are profitable, I'll use auto campaigns. For that I'll use broad, I'll use'll use broad. We do a lot of broad mod because the nice thing there is that if you look at exact match keywords, the bids are a lot higher because everybody's like oh, I got to be exact match. Well, we might go over to broad and use a broad mod where the CPC is a third of what we're paying for an exact match. So we can get some of the benefits of what we would with an exact match at a much lower price, which allows us to have a profitable ACoS that we could never get with an exact match keyword and drive sales that way.
Speaker 2:Taking that another step further, which I've seen a lot of people do, is a broad match campaign will generate a sale for a search term, and then that seller will graduate that to an exact match, but then they'll negate it in the broad match, even though that was a profitable sale. I don't understand that. I mean, yes, I understand double targeting something. I don't know that you will actually compete against yourself in that case though, but it's a profitable sale one way or the other. If it's at a good ACOS in the broad match, I'm not going to negate it just because I'm graduating it to an exact match.
Speaker 3:Based on what John just said, the likelihood is that if you do that, if you negate it and you put it into this exact match campaign, the likelihood is you're going to pay more per click in the exact match than you were in the broad and so, even though it is exact, you might end up with a higher ACOS that way than having left it. So you'd be better off leaving it and comparing. You know, over time you know how those, how those numbers, you know flesh out and how they compare.
Speaker 1:Yeah, and that's exactly what we do with a lot of campaigns is so if we see something in, you know, in a, in a broad campaign that's a keyword that's performing really well, that we're not currently running an exact match, we'll run an exact match but we're going to pay a lot more for that CPC.
Speaker 1:Now that can make a lot of sense Again, even in an exact match. I would say the benefit there, and part of the reason why the CPCs are higher, is that because it's an exact match, you have a lot more control and you're also getting keyword rank for that, because if Amazon keeps seeing that you're converting well on cleaning pool net, for example, then you're going to organically rank high for that, and so there is a compounding effect, or kind of a halo effect, if you will, that you get from exact match keywords. That is harder control if you're using broad, broad mod phrase or you know other ad types, and so there is, you know, a reason to pay even above. You know kind of what your breakeven ACOS is sometimes for exact keywords. But that doesn't mean that it always makes sense and that you should stop using the other match types.
Speaker 3:Well, also, I think it's important to remember, like if you're using it for ranking, like if you're trying to use an exact match campaign for ranking and you're using it for ranking, like if you're trying to use an exact match campaign for ranking and you're willing to spend more you know from an ACoS perspective because that's what you're trying to do well then you better be tracking to make sure that you're actually affecting your ranking, like that's actually helping, because if it's not, and you're overspending on your ACoS because that's your target but you're missing the target, well then at some point you have to decide whether you're going to turn that campaign or turn that keyword off, or turn the bid down or whatever it is you're going to do, because now you're just throwing away money if your ranking's not changing. I was also going to mention something else that I think is probably important to pay attention to, and that is we were talking earlier about the well, let's take the maybe say more extreme example of that auto campaign that we run a low bid campaign. Generally speaking, those are going to be fairly low conversion rate keywords. We're getting them at a low bid, so we get a good ACOS on those, and so they're profitable.
Speaker 3:But depending on how much of that kind of a strategy that you employ, I think that you need to pay really close attention to how does the conversion rate of your listing overall compare to the competitors in your category that you're trying to beat in terms of a ranking perspective?
Speaker 3:Because if the conversion rate of your product is fairly similar to some of those other products that really you're trying to compete against and trying to rank better than then be careful using strategies that have a low conversion rate that are going to potentially bring down the conversion rate of your product overall. You know, because you're really close. You know like if you've got a 20% conversion rate and somebody else has got a 15 and you know the sales that you're putting through are only going to bring you down marginally in that conversion rate, it probably doesn't matter. But if you're all sitting at about a 15% conversion rate and you start throwing a bunch of low conversion rate targeting at that, I have a little bit of concern over that in terms of your ranking strategy. I'd be interested to hear what your guys' thoughts are on that, but I just think it's something to be careful with.
Speaker 2:I think for me, I think it's important. So what I think it's important to pay attention to is match types as a whole and what percentage of your spend is going to each match type. I think John mentioned the lore of having all of your keywords be exact match because it's more specific. But I think having most of your spend be exact match because it's more specific and but I think having most of your spend and when I say most, maybe 60, 70% of your spend, I think should be an exact match campaigns, maybe 30%, 20 to 30% in broad and phrase, and then only like 10%, maybe even less than that in an auto, I think you should have all of those match types. But I think if you have that ratio and you're thinking about it from in terms of how much am I spending on each match type, I think that conversion rate ends up leveling out over time because most of your spend is very targeted. You have a little bit. That's research.
Speaker 2:But again, one of the things that you mentioned is making sure that if you have a campaign that you expect to increase your rank, make sure that it is increasing rank.
Speaker 2:I think that's the same with all of your campaigns. I think you should know what the purpose of every single campaign is and don't just run a campaign because someone on YouTube video told you to, but, like, actually understand what is the purpose of this specific campaign and how do I measure that? How do I measure what the results of that is? Because if, like you said, if we, if I have a ranking campaign which I love, ranking campaigns what I love about the ranking campaigns that I've been using recently are just single keyword, exact match. But, like I pay attention to first of all, what am I spending, how is it affecting it on the ranking side and how can I adjust that? Can I adjust top of search? Will that keep my conversion rate where it is? So I think knowing kind of where your spend is going and where they are going to each match type, I think kind of levels out that conversion rate over time.
Speaker 1:Well, the other thing that I would say, too, is that remember that Amazon doesn't only take into account conversion rate. I mean, there are multiple factors that are taken into account for rank. One of the other ones is sales velocity, and I think that that has a bigger impact than than we give it credit for. So, to kind of go to your example, mike, you know, if you had a product that had, you know, an 18% conversion rate but a much higher sales velocity, versus another product that had 20% conversion rate but a lower sales velocity, my guess is is that the one at 18, at a much higher sales velocity, is actually going to rank better for a lot of the keywords that are going to matter for that brand and that where customers are going to find them.
Speaker 3:Fair point. I think it's an important piece to pay attention to. Obviously, the algorithm is not focusing on any one thing. That's why it's an algorithm right. There's all sorts of parameters that are coming into play there, so sales volume is definitely important. It actually brings me back to something that we were talking about briefly before we jumped on the podcast, and that is that there's a number of other factors that come into play here, not only in terms of ranking, but in terms of CPCs on your ads and things like that, and one of them is inventory and so paying.
Speaker 3:You know, paying really close attention when you're running your PPC that you have enough inventory long-term that you can sustain. Because if you start spending on a campaign for a particular product or multiple campaigns, whatever it is, if you increase your bid or you increase your budget or whatever that is, and you're not paying, or you increase your budget or whatever that is and you're not paying attention to, well, if I do this and my sales velocity begins to increase, do I have enough inventory to actually sustain that long-term? Then all you're doing is stealing money from yourself because you might sell more right now, but you're selling it at a higher cost to yourself and then you're going to run out of inventory. And now you're screwed where you'd have been better off not raising your bid or raising your budget or whatever and just keeping the status quo so that at least you just continued to sustain and were able to maintain those sales through and not run out of inventory. The other piece of that is that ranking is very tied to inventory. There is a direct relationship between how much inventory you have for any given product and specifically we've talked about this before in terms of geo ranking and how much inventory you have in particular areas of the country, especially high population areas, that Amazon takes into account when they rank you.
Speaker 3:So your keyword ranking is not just okay, I rank in my product for this keyword.
Speaker 3:This is where I rank everywhere. I rank here for Philadelphia, I rank here for New York, I rank here for Michigan and very much it's based on what is the delivery time for that product and if there's no inventory in that area, then delivery times will be longer and your ranking will be less. Also, if Amazon sees that your inventory is low let's say you're down at 20 days of inventory or 25 or 30, then your ranking is going to be less, they will lower your rank because you have less inventory. Because ultimately what they want is they want to put products at the top of the category that they're going to be able to continue to sell.
Speaker 3:They want consistency. Like consumers like consistency, and so Amazon's not going to rank you well if you don't have enough inventory to sustain sales. So pay attention to inventory when you're managing your PPC, because you know, as that, inventory declines even if you don't go out of stock, if your inventory declines below roughly 45 days of inventory at any given point you're going to, your ranking is going to suffer. So you better be paying attention to that too.
Speaker 1:Yeah, there's a couple of things that I want to double click on there because I think that's so valuable. One is that, when it comes to Amazon, looking for that consistency I mean the days of you know where Amazon was kind of the wild wild west and they were willing to accept almost anything, and you know sellers were basically on the platform as a way of essentially creating a job, or basically over in the sense of you have to think about Amazon more now as walking into a Walmart or Target in the sense of they want to see that product in the same spot on the shelf all day, every day. Because I can tell you right now I mean I think we talked with a couple of our brand builder guests about it where you know they ran out of inventory and they couldn't fulfill inventory to I don't remember if it was Walmart or Target for like a month or two and they got completely pulled off the shelves because Walmart has a certain number that they need to hit with every single one of those slots on the shelf. Now, in theory, there's unlimited shelf space on Amazon, but in practice there's a limited number of slots on page one and Amazon they're investing in visibility in your brand just as much as you are investing in Amazon between ads and everything else that you're doing in order to build your brand on Amazon. So they look at that and they say, okay, if we don't see that consistency over time, then we're going to put somebody else in that spot that does provide that consistency, both in staying in stock but also the inventory levels that you need in order to be a consistent brand on the Amazon platform. So I think that's a really important piece for people to be aware of.
Speaker 1:The other thing that I was curious to get your guys' thoughts on this is kind of a theory that we're testing right now as we record this, for Prime Day is rather than so.
Speaker 1:Let's say that you're starting to run out of stock and you know that it's going to be slow coming in and you want to slow down your ads. Well, rather than pausing campaigns or adjusting budgets and we'll talk about budgets here in a second one thing that we're testing for Prime Day on one particular account is actually significantly reducing the bids to about 50% of what we would normally bid, and the theory behind that is that as soon as you start pausing and unpausing campaigns again, you throw that kind of unpredictability into the situation. And then the other piece is that if we significantly lower bids, what we find is that Amazon campaigns with limited bids perform actually worse than campaigns that have plenty of budget. Or, excuse me, campaigns with limited budget perform worse, is what it really boils down to. So our theory is by reducing the bids significantly, yes, we realize we're slowing down sales, but those sales that we're getting are actually much more profitable.
Speaker 3:And by keeping your budgets high, as opposed to bringing a budget down and saying I want to spend less, then you're still maintaining that differential that so far, for you, seems to be making a difference the campaigns that have budget that outstrips what Amazon says it means. So if Amazon says you need $20 for a campaign per day I don't remember if we mentioned this on the podcast or if this is pre-podcast, but we were talking about how you've been running your campaigns at like three times what Amazon recommends for that budget and that you're getting better ACOS out of that, correct.
Speaker 1:Yeah, and I think we talked about that before the podcast and that's good clarification. So yeah, we've tested anywhere from double to 10X and what we found is that sweet spot of three to five times what those campaigns typically spend in a day. If we give it so, say it's normally. Just to make the numbers easy, let's say it normally spends $100 a a day. If we give it three to $500 budget, we see it be a lot more efficient than if we gave it a $200 budget and at the same time, we don't see any gain in efficiency If we give it a thousand dollar budget or 10 X, what it means, and so that's why, with that, then, this strategy fits that very well, because, rather than reducing your budget, if you reduce the bid, then that budget still stays high and you still maintain that at least that particular benefit.
Speaker 1:Right, you get all the efficiency, but at the same time it actually becomes more efficient because, yes, you're going to slow down sales, but let's say that normally you're paying a dollar for your clicks, or well, I guess in this day and age let's call it $3. Right, you cut that. You know. So if you cut your bids in half, and let's say you now you're bidding a dollar 50, well, yeah, you're going to get a lot of less impressions, a lot less clicks, which means a lot less sales. But because those bids are so much lower, those sales are going to be a lot more profitable for you at the same time. So now you slow down your sales velocity and made your ad sales more profitable at the same time.
Speaker 3:Makes sense to me. We haven't tested that, but it makes sense as a strategy.
Speaker 2:Mike, I know that you don't run any Prime Day deals or anything along those lines. Do you adjust campaign budgets or bids specifically for Prime Day?
Speaker 3:So we actually currently have PPC Ninja managing things at the moment, and so we had a conversation with them about that for Prime Day, and I believe they are pulling back bids for Prime Day for that reason, because we're not running deals, we're not going to perform as well as those, as those brands that are running deals.
Speaker 3:Because we found that Prime Day for us and I think most of it is because we're not a we're not a spontaneous kind of a product it's not, like, you know, clothing or gadgets or things like that.
Speaker 3:You know that. You know people are excited about. You know it's a pool, and so it's one of those things where either somebody needs one or somebody doesn't for the most part, and so if they need one and I offer them a discount today, maybe I sell it to them today, but I might've sold it to them tomorrow or next week, you know, at at regular price, and they would have bought it anyways. And that's that's actually what we found last prime Prime Day we ran deals and we had a good spike in sales, but then we just had a big trough afterward that we normally don't see, and so essentially all we did was just steal those future sales and sold them now at a lower price point and at lower profit. So we are not running deals, and this year we are lowering bids on those campaigns so that we don't spend so much.
Speaker 1:Well, that's another thing that we're testing to kind of get the best of the both of those worlds is lowering the bids for the first half of the day and then raising them back up to 100 to 120% for the second half of the day.
Speaker 1:And again, the theory behind that and we'll see what the data tells us when we're done with this but the theory behind that is that, based on the data from last year, is that we know the CPCs are the highest at the beginning of the day because everybody's got budget, but the traffic stays pretty consistent throughout the day and, more importantly, the conversion rate stays pretty consistent.
Speaker 1:So you kind of have this crossover effect around 11 am Pacific time where you have the CPC start to come down by 20 to 30% because campaigns are running on a budget, but you still have consistent conversion rate and traffic. So our theory there is that for the first half of the day we cut those budgets by 25% to 50% and then for the second half of the day we bring them back to 100% to 120%. So that way, those very aggressive competitors because, again, most of the brands that we're working with well, all the brands we work with are US-based and a lot of them are premium products is all those aggressive overseas Chinese competitors have burned through most of their budget in the first half of the day and now we've got, you know, basically full budget when we up those bids on the second half of the day, to be to get that visibility for the second half. So that's the theory behind it. We're testing out and I'm excited to see what the numbers look like after kind of everything shakes out in the next week or so.
Speaker 3:Well, and I think it's easy to make the assumption that everybody who's advertising through the platform knows what they're doing when the reality is, the majority of them don't know what they're doing, especially because number one you've got a lot of new sellers who are trying to make it big, right, and so they see an opportunity like Prime Day or something like that, and they go huge on it. Not really understanding much about the platform. They're just like, hey, it's an opportunity, right. And so many of those individuals that you would be competing against for ads on a Prime Day event or something like that are individuals that don't really understand advertising. They certainly don't understand Amazon advertising and they are going to blow through those budgets right away, and so I think it makes a whole lot of sense as a strategy. It's clear that the statistics show that a lot of sellers are running out of budget midday. Why not take advantage of that opportunity? It only makes sense.
Speaker 1:Yeah, so I'm trying to think of. So the other thing that I want to make sure that we haven't mentioned yet that I think is really important and, matt, I think you actually touched on it a little bit in kind of, we are talking about the ad mix, which is, I think, something that gets lost, especially as Amazon, over the last couple of years, has launched a number of different ad types, both between the regular ad console and with DSP, keeping in mind that at least what we're still seeing is that about 70 to 80% of our sales are still coming through sponsored product ads. So, yeah, video is fun, sponsored brand is fun and that type of stuff, but at the end of the day, if you're really good with sponsored product ads that's the Pareto principle you're 80-20 of winning when it comes to Amazon ads.
Speaker 2:Yeah, I think I mean overall, if you look, if you just look at a sponsored product, like my dad, for example, it's the. I love understanding how people, how people shop on Amazon and why they shop that way. My dad is the kind of guy that likes to support the underdog. So for him, if he sees a big, shiny, beautiful looking ad type on the top, he's not going to click on that because he sees that as that's the guy that is like the Nikes or the Dasanis of the world. So he goes down and clicks on one of the sponsored product ads and it looks like a listing.
Speaker 2:Most people don't even know that those are ads. Most consumers think that that's just a normal listing, my dad included. So I actually had to change how my and actually show my dad how to look at what an underdog is, as opposed to what he was doing, which he was actually choosing people that were spending the most amount of money, which was kind of funny. But yeah, I think I think the reason for that, the reason for sponsored product ads resulting in most of the sales for most sellers, is because of how organic they look. They look just like a normal listing. Most people don't even know.
Speaker 1:Yeah, and I've had the same thing, you know, when I've talked to people and they're like you know, and they're like, oh, what do you do? And we start talking about Amazon. And they're like, yeah, I shop on Amazon all the time. And, um, and you know, we start. I was like, yeah, listings that you see. And they're like what, those are ads. I'm like, yeah, and I'll pull out my phone and I'll show them the little corner. I'm like you see, where it says in small gray tax sponsored. That means somebody paid to be there. And I would say probably 80% of the people that I have that conversation with are shocked that that is an ad.
Speaker 3:Well, the reality is. I mean, when you look at a page on Amazon, it's probably at least 30, maybe 40% of the items that are on that page that you could click on are sponsored. You know, like the? Ratio of sponsored ads to organic. You know listings. Is, you know so ridiculous, you know, these days?
Speaker 2:I think I saw a stat that it was like 70%. I think the stat that I saw recently was like 60 or 70% of the pages sponsored ads.
Speaker 3:It could very well be. I mean, it's massive, it's crazy. So, and you're right, most people don't know. You know that that's the case and I do think it's one of those things where you know you refer to the Pareto principle is that you know at least get really good at the one thing that you know is the big piece of sponsored ads. Even if you don't really dabble too much in display or sponsored brands, I think you should. But even if you didn't just get really good at sponsored product ads and recognize some of these primary principles that we're presenting here.
Speaker 3:For instance, one of the really big ones that I think will help you a lot, if you're not already doing it, is making sure that you're keeping good performing keywords in the campaigns that they're in and taking the non-performers out and moving them someplace else. That is a huge differential and paying attention to if you're using automated tools. Recognizing that that's what those automated tools are going to do is just the exact opposite of that. They're going to take the good ones out and put them someplace else, and you're going to see a decrease in production on those almost always, and so modifying those settings if you're using the automation so that they're not creating new campaigns, they're not keyword harvesting, they're not moving those keywords out, they're just doing bid optimization and you're doing the management of those campaigns. I think is a really big deal.
Speaker 1:Yeah, I think those are some great action items for our listeners, Mike, that you brought up there. Matt, anything else that you would add? I know PPC is a very complex topic that we could talk about for a long time. I think this is a good place to kind of wrap on this topic for today. But any kind of action item that you would give to listeners when it comes to PPC that we've talked about.
Speaker 2:Yeah, I don't think that spending hours in spreadsheets and downloading reports is the best use of most brand owners' times. I think that outsourcing PPC at some point, at whatever level that is for you, it makes a lot of sense for most brand owners. But what I will say and this is something that we've touched on is that even if you have someone else or a tool, first of all, don't have a tool, just don't throw tool thinking that it's going to be autopilot, because it's not. But second of all, if you have an agency that's doing it for you, you still have to be involved. You still have to be looking at what keywords are they negating, what keywords are they graduating? You know what are they relevant? And maybe the agency doesn't know they're relevant, like Mike threw up an example. So I think being involved and not just handing it off and looking at a report once a month is super important. Being at least involved somewhat at high level on your PPC campaigns is important for all brand owners. I think that's the biggest takeaway for me.
Speaker 1:Yeah, and I think you know we didn't really touch on it much here. But one thing that I want to what I would leave listeners with is PPC is an important component, but remember that it goes hand in hand with how strong your listing is. So if you've got a listing that you know has a pretty poor main image and title, and you know secondary images and that type of stuff compared to your competitors, your PPC is going to suffer, because PPC is really just a visibility tool. So make sure that you're using both of those levers. Ppc is great at getting yourself or getting your products in front of customers. Of those levers, ppc is great at getting your products in front of customers. But then you also have to make sure that you have a listing that really shines compared to your competition, and that's going to mean a lot of different things depending on what category you are in and how competitive that category is.
Speaker 3:Well, and I think a good extension of that idea is just, overall, recognizing that if you silo PPC, then you're going to have problems. If you're not paying attention to PPC in terms of its relevance to everything else, then you don't really understand what you're doing. So, again, if you're not making sure that your listing shines, then you're overspending on PPC and you're just throwing money away. By the same token, again going back to that idea of when you're looking at PPC, that your ACOS is not the be all and end all, you know, like paying attention to what is the conversion rate, you know, do you need to improve the conversion rate on your listing? Like, are you in a bad spot?
Speaker 3:Are you trying to use a campaign for ranking, in which case maybe spending more on ACOS is relevant, and if you're using the campaign for ranking, making sure that you're actually tracking the rank to see if it's actually working, you can't silo that off and just look at PPC from the standpoint of ACOS and say, well, the ACOS is good, so I guess it's working for me. Well, yeah, maybe, but maybe there's some other things that you should be using PPC for and dialing in that you're not, or maybe there's some other things that you were using a PPC for, but it's not really performing, but you're not tracking it and paying attention to it. So just don't silo it off. You know, make sure that you're paying attention to the other areas of the business that touch PPC and that PPC touches.
Speaker 1:Yeah, absolutely, and I know we're going to talk about it here in the next couple of weeks, but I'll just kind of throw this as a teaser and a plug which is ACOS, when it comes to advertising on Amazon, is probably the worst metric to track. There are much better metrics than ACOS when it comes to how effective is your ads and really the rest, and how healthy is the rest of your Amazon account. So I'll put that out as a teaser for a topic that we're going to cover in the next couple of weeks, but I think that's really important for people to understand when they're looking at their account. So I think that's a great place to plot or kind of stopped for today for PPC, we covered a lot of different things. I would just encourage listeners, you know, pick one or two things based on where you're at in your Amazon journey, and I think you'll find at least implementing one of those things will have a pretty big impact on your business.
