When your organic ranks on Amazon unexpectedly decline, how should you react in advertising? π€
Organic ranks can decline suddenly for numerous reasons:
- A top-selling variation goes out of stock
- Amazon made a change that affected your relevance, capping your ranks
- A product was inappropriately flagged
The results are usually as follows:
- TACOS shoots up πΊ
- Profitability declines π
- Your ad dollars lack the ranking power they had previously π
In most cases, the correct decision is to reduce spend until the situation is resolved.
Reducing the bids is one option, but depending on your optimization set-up, it might be cumbersome.
Instead, I recommend using campaign-level budgets as the lever to reduce spend.
You can follow these steps:
- Assess the average spend per day for each campaign
- Set caps lower than the typical daily spend
- Set stricter caps for campaigns with lesser performance
Why it's good:
- Easy to implement
- Guarantees a spend reduction whilst profitability is more volatile
- Easy to reverse once the organic ranks normalize
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Weβve been saving brands on Amazon π° by auditing their branded spend.
Do you know if your investment into branded keywords in Amazon Sponsored Products ads is producing incremental sales?
Here's an experiment we did for one of our DTC clients a while back.
In spite of a significant pull back on Sponsored Products branded keyword spend, brand purchase share % remained at over 90% on average for branded keywords.
And it continues to stay that way today, at the same level of spend.
Will this be the case for every brand?
No.
If you're a challenger brand, you might be getting conquested on many of your branded terms by more established companies.
Resulting in sub-80% purchase share on some or all of your own branded keywords.
Equally, if you're an established brand selling a premium price product, you could also be losing sales on branded to challenger brands with visually similar products at low price points.
If you're losing share, should you spend as much as possible on branded to protect your turf?
Not necessarily.
When it comes to Sponsored Products, the correct way to look at your purchase share on branded is at the keyword level in your SQP reports.
On which keywords, specifically, do you have a sub-80% purchase share?
Those are the keywords that you should be willing to spend more aggressively on, and feature your most popular products on.
Then track your brand purchase share % weekly, and iterate accordingly.
If your brand has a presence off of Amazon, these are tests that you or your agency needs to be running.