Five Simple Mistakes That Diminish Amazon Advertising Revenue

Ron Dodby Ron Dod

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Amazon ad revenue has skyrocketed, making the eCommerce giant the third largest digital ad platform in the United States.

As a result, in 2019, Amazon is expected to grow the advertising arm of its operations by over 50 percent, increasing the retail behemoth’s share of the U.S. market to 8.8 percent.

Therefore, given the increasingly competitive nature of advertising in the company’s digital marketplace, it is vital to ensure that retailers are getting their money’s worth by creating campaigns that win new customers and help a seller to climb the product SERPs.

But no matter if a retailer’s goal is to increase their rankings, boost sales volumes and profits or bring attention to a new product, Amazon adverts can go a long way in achieving those aims.

But there’s one big problem.

Scores of sellers regularly fall victim to simple, silly mistakes that diminish ad revenues and force retailers to cede ground to the competition.

Effective Amazon PPC management requires considerable amounts of pre-launch probing, patience and attention to detail to produce the desired outcomes. Anything less often produces snafus and underwhelming results.

However, by shining a light on some of the simplest, most common of Amazon advertising mistakes, those who heed the warnings written here can generate campaigns that help them to minimize wasted ad spend and maximize PPC ROAS.

mistakes diminish amazon advertising graphic

Careless Keyword Research

Keyword research resides at the center of nearly all PPC advertising campaigns.

Retailers who conduct careless, lazy, haphazard research are bound to impact their campaign’s performance in significantly negative ways.

For instance, by merely targeting the most obvious, generic, on-the-nose phrases, retailers fail to capitalize on adjacent terms that might produce a higher ROI for an Amazon advertising campaign. Additionally, the most sweeping of keywords likely come at a premium cost, reducing a seller’s potential ROAS. While these keywords certainly have their place, failing to do the proper keyword diligence means that merchants are leaving a lot of money on the table.

The other way in which sellers tend to neglect keyword research responsibilities is by handing the reins over to Amazon by running automatic campaigns. While auto campaigns can undoubtedly be a good source of keyword information, it is wasteful to rely on this tactic too heavily as doing so will result in many missed opportunities for optimization and growth (more on this later).

team discussing research

Without a well thought out, detailed keyword research strategy for Amazon, sellers are unlikely to show up for relevant searches, unnecessarily misuse much of their ad budget and produce lackluster campaign results.

Moreover, employing poor performing keywords is also detrimental to advertising efforts as these terms rarely–if ever–result in a conversion.

This situation leads us to the second most common mistake merchants make in advertising on Amazon.

Ignoring Negative Keywords

All too often, the same retailers that fail to conduct proper keyword research also fail to optimize their campaigns by ignoring negative keywords. 

By failing to implement negative keywords, advertisers are throwing away money on clicks that come from irrelevant searches. The fact is that negative keywords conserve PPC budgets by helping to filter out searches that contain phrases that are unrelated to a retailer’s product.

By virtue of its function, negative keywords can give retailers the competitive advantage they require to reach the right audiences and earn new customers. By harvesting these terms, merchants can decrease their advertising spend without reducing visibility or conversions for their adverts.

For instance, Amazon merchants who sell shoes and target the phrase “men’s shoes” for broad type match might have their ads surface for the phrase “women’s shoes” or even “women’s boots,” as both queries contain the broadly targeted word “men’s.” If a searcher accidentally clicks on the ad, the merchant is charged for the click but gained no conversion, thereby harming campaign performance.

negative keyword quote

Sellers want to add and remove negative keywords as frequently as is necessary to avert paying for irrelevant clicks that only eat up budgets.

For negative phrase match keywords, Amazon limits its sellers to four words at a time. However, with negative exact match, the platform allows retailers to implement 10 words at once. Moreover, do note that negative keywords can only be applied to Sponsored Product and Sponsored Brands ads.

Identify and add negative search terms regularly to exclude weak or unrelated phrases from surfacing ads. That money can be better spent on relevant keywords and phrases that do convert customers and generate profits.

Make this mistake, and you can kiss your budget goodbye.

Misuse of Automatic Campaigns

A sound campaign structure is a vital element to the generation of an effective Amazon advertising push. While there are certainly a variety of beneficial ways to structure a campaign (depending on the size and complexity of the brand), there are also countless ways to bungle a campaign’s architecture completely. 

Automatic and manual Amazon campaigns each have their respective sets of pros and cons. Most notably, while automated efforts manage the targeting nuances for sellers and produce beneficial search terms and targeting info, manual campaigns enable sellers to control the options listed above and implement their unique bidding strategies.

However, one of the more common mistakes sellers make is to over or under rely on automatic campaigns.

Automatic Amazon PPC campaigns should be employed to produce and harvest keyword information that retailers can then plug into their manual efforts for heightened performance. Therefore, a combination of these campaign types is the best way to optimize keyword efforts and ensure wide-reaching coverage for relevant queries.

When running manual campaigns, advertisers can launch automatic efforts in parallel to establish if they are missing out on any profitable keywords that they can integrate into the manual operation.

By using both campaign types, retailers are more likely to uncover keywords that convert while also pinpointing phrases that require inclusion in the negative keywords list due to poor performance.

However, even when automatic and manual campaigns are employed correctly, there is still a significant mistake merchants are prone to making.

team fleshing out strategy on flip chart

Using the Same Strategy Indiscriminately

Too often, sellers deploy campaign after campaign while continually assigning the same business objectives across the board. This approach tends to produce poorly optimized advertising efforts as campaigns often have different end goals.

Before launching a campaign, retailers should outline their specific aims, as this will better equip them to determine which products to push, how to structure the effort and how to measure performance effectively.

Some of the goals a merchant might pursue include:

  • Launching a new product: Create demand and exposure to generate initial orders and increase sales velocity.
  • Increase brand awareness: Boost a brand’s base by making it more visible to audiences.
  • Maximize profits: Optimize product profits based on the desired ACoS.
  • Liquidate merchandise: Sell out end-of-life products.

Wise retailers allow their business goals to drive their PPC strategies, not the other way around. When considering an Amazon advertising blueprint and which products to promote, consider the ones that will help to accomplish the business’s direct aims.

Botched Bidding

The final most frequent mistake merchants make that diminishes their Amazon advertising revenue is out-of-whack bidding strategies that end up costing sellers significantly.

Too often, retailers either bid far too much (thereby driving ACoS sky-high) or bid too low and fail to produce any meaningful results, ultimately wasting the money put forward. This realization raises a series of questions for most sellers:

  • What is a proper bid?
  • Is it necessary to bid up or down?
  • How often should bids potentially be adjusted?

retailers bidding amazon quote

In truth, the answer to all these questions is “it depends.”

The key to clarifying this ambiguity lies in retailers understanding their campaign’s goals and figures.

An understanding of goals is what guides a strategy. Retailers should establish a target ACoS prior to initiating a campaign. Knowing product profit margins and business overhead also plays a role.

While all these elements play a role, there are four main strategies that sellers typically utilize:

  • Product launch bids: Since the first handful of weeks and months are crucial for new items, it is vital to gain visibility, sales and reviews. Product launch bids tend to have a considerably high ACoS to start with and then it begins to taper off as a product gains ground.
  • Rank bids: Here, retailers aim to gain sales to increase SERP rankings for specific keywords. This approach is a long-term strategy and requires an above-average ACoS. These campaigns typically are not profitable. Instead, it is the sales generated from increased rankings that produce the profits.
  • Profit bids: Efficiency is critical here. Therefore, the ACoS for this strategy is much lower than the other tactics. Margins are the primary consideration here, so it is vital to take overhead into account when calculating potential profits.
  • Scale bids: Here, merchants aim for overall growth by selling as many products as possible. As ad visibility increases, so does a seller’s total sales.

amazon products on laptop

There is a wide array of mistakes that Amazon advertisers can make that results in less-than-desirable campaigns results. The five flubs listed above are the most common.

Much like working with Google Ads, retailers must pay considerable attention to researching keywords, crafting their strategy, integrating periphery elements and refining their performance to produce the most profitable campaign possible.

By remaining diligent to not slip into these familiar PPC pitfalls, retailers are much more likely to generate campaigns that reach their goals.

However, if your brand still needs help in making the most out of its Amazon advertising budget, reach out to Visiture for an Amazon paid advertising consultation and we can ensure that your ad dollars don’t go to waste.

Join 150+ Leading eCommerce Brands

And see how Visiture can grow your revenue online through award-winning transactional focused marketing services.

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