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Our strategies behind a constant PPC growth month-over-month
Amazon Advertising Lessons - Jun 24
George Reid
June 23, 2023
This week we are excited to share another case study. This time it’s a relatively larger account, selling in the Sports & Outdoor category, with a yearly revenue of over $4M.
We started managing this account in mid-Jan this year with a clear business goal - profitable sales growth. Now, four months later, let's look at some of the big wins.
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Both PPC and organic sales have been growing each month. Monthly PPC sales rose from avg. $195k to $284k. And the total monthly revenue (Organic + PPC) from $394k to $633k.
Monthly PPC revenue went up 37%. The past five months averaged $223k, compared to the avg. $162k prior to December (excluding December as it’s a peak season).
Account revenue (PPC + Organic) went up 50% Averaging $478k vs $316k before. Our strategies were focused on growing relevant traffic, overall sales, and ranking.
In April, organic sales hit a record high of $376k. Their contribution to overall sales grew from 47% to 53%.
Second & third highest PPC sales during the off-peak months of April & May. Only followed by $373k in the peak month of December.
Second and third highest overall sales in May ($633k) & April ($598k), close to the sales in December ($668k).
All this, while maintaining profitability. TACOS remained at 7% in the last two months. ACOS has decreased month-over-month. A slight increase in ACOS in the first 2 months was caused by the increase in Ad spend, which ultimately helped overall traffic and sales.
How did we achieve this?
Our strategies were based on the prime business goal of return on Ad spend. We focused on ensuring that each step we took would contribute to sales growth and profit. In this particular case, ROAS was a more important metric than repeat sales, which are less common in this product category.
A. Ad Types & Budget Allocation
SP campaigns are the best bet when it comes to ROAS. We spent the highest on it. Here’s how we distributed the budget:
- 81% of the Ad total was spent on SP campaigns, aiming to maximize the impressions share and performance.
- 14% on SB video campaigns. SBV helps with higher CTR and Traffic as well as captures additional placement. However, with high CTR, we tend to receive more clicks, leading to a high ACOS. At 14% Ad spend, we were able to maintain the same ACOS as SP campaigns. Besides, SBV allows us to do branding (by constantly showing the brand name & logo in videos).
- 5% on SD campaigns. For ROAS, we utilized bottom-of-the-funnel strategies, which were limited to:
i. Defensive and cross-promotion (displaying own brand products on product pages)
ii. offensive (showing Ads on similar product pages where we had competitive advantage)
iii. Retargeting (to reach shoppers who showed interest in the last 14-30 days).
It would be worthwhile to spend on SB campaigns, however, the Store page setup is in progress. We plan to allocate some budget for this once the store page setup is complete.
B. Product-Focused approach
We do this for all accounts. It always helps to scale up efficiently.
Since each product is different, with different prices, audiences, profits, CTR, and so on, we tailored our strategies for each product based on its performance. For example, for the products that had a more competitive edge and did well with offensive/product targeting or category targeting, we could push them more aggressively with product or category targeting.
C. Individual Product tracking
In our analysis, we tracked each product TACOS individually, based on business goals and significance, since the profit margins and goals are different. Looking only at account-level TACOS can lead us to overlook how individual products contribute to the overall account performance, or fail to notice any product that isn't profitable enough. By scaling up each individual product based on its performance, we can maximize the entire account's growth.
D. A mix of Keyword, Product, and Category Targeting
We utilized all three targeting to optimize reach, across all Ad types. We divided the Ad spend based on the ACOS and returns.
Our main focus was on keywords and product targeting to reach the most relevant audience, followed by category targeting (with refinements to stay as relevant as possible). We saw the highest returns on SP ads and allocated most of our budget there.
E. Optimization Strategies
On top of this setup, we applied important optimization strategies to scale up profitably. These strategies involve proper campaign structuring, top-of-search placements, frequent bid adjustments, negative targeting, and keyword funneling. We've discussed these strategies in detail in previous case study email. These strategies don’t disappoint and work all the time. This steady month-over-month performance growth shows that these strategies can work effectively on all accounts, whether big or small.
Other learnings:
Prime Day dates announced. The bid Prime Day event is on 11-12 July. It’s worthwhile running the important checks including Inventory, content, search terms & Keywords, offers, and bundles [Read more].
Careful with the default "Similar to Advertised Products" targeting. Amazon adds it automatically on SD campaigns, and can often go unnoticed. [Read more].
New Metrics for SP Campaign reports. The campaign report now includes four new metrics: last year's impression, clicks, spend, and CPC. [Read more].
Seller Fulfilled Prime will reopen new enrollment in 2023. Amazon officially announced that the Seller Fulfilled Prime (SFP) program will once again accept new seller applications later this year. [Read more].
Thanks,
George
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