Top 9 Amazon Advertising Mistakes to Avoid

Amazon is a major player in the global online marketplace, attracting more than 200 million visitors each month. With this massive audience, competition among sellers to capture consumer attention can be incredibly intense. When utilized correctly, Amazon Ads can be a powerful tool to boost your sales, strengthen your brand presence, and help you stand out from competitors in your niche.

While many sellers recognize the potential of Amazon advertising, a common pitfall is underestimating the importance of a well-thought-out and thoroughly tested Amazon ads strategy. Success on Amazon requires more than simply setting up and launching campaigns. Although the fees associated with Amazon advertising are reasonable, poor optimization and ineffective bidding strategies can lead to costly mistakes.

In this blog, we’ll explore some of the most common Amazon advertising mistakes that sellers and advertisers often encounter.

Mistake #1: Focusing Solely on ACoS

ACoS is a familiar and straightforward metric used to gauge profitability in advertising. When your ACoS exceeds your net margins, it indicates a loss on every sale. However, the reality is that advertising is more intricate than just monitoring this single metric. Metrics like Total ACoS and keyword rank play a more significant role than ACoS alone. One of the main objectives of Amazon advertising is to enhance organic keyword rankings while keeping your ad spend in proportion to your total revenue. Although profitable sales are essential, they should be viewed as a secondary goal.

Mistake #2: Overlooking the Relationship Between Organic Rank and PPC

It’s risky to adjust advertising strategies without considering the impact on organic rankings. If the goal of your advertising efforts is to secure or sustain organic rankings, then understanding this is crucial. For instance, a keyword with a high clickthrough rate but low conversion rate might still be helping your organic ranking. Ignoring the link between paid advertising and organic search behavior can lead to negative outcomes. Make sure that you are monitoring organic rank and observing how your advertising changes influence it.

Mistake #3: Insufficient Data Collection Before Optimization

Avoid pausing or archiving keywords or entire campaigns prematurely. It requires both time and financial investment to determine which targets will succeed in the long term. For more expensive products, you have greater margins to work with, allowing for more extensive testing before making a decision. Each target is like a bet, and you’re assessing whether that bet will pay off. Therefore, avoid making hasty adjustments. Establish a minimum number of clicks or a percentage threshold of the product’s sale price before taking any action.

Mistake #4: Making Abrupt Changes to Critical Keywords

Critical keywords - those four or five terms that drive a significant portion of orders - require careful management, especially when linked to organic rank. There are many cases where organic rankings declined after making sudden changes to these vital keywords. Instead of drastic alterations, make gradual adjustments and allow time for their effects to become evident. Avoid making decisions based on gut feelings about how a keyword should perform.

Mistake #5: Neglecting External Influences

Advertising performance can be significantly impacted by external factors such as competitors running special deals, altering prices, or changing their listing content. The Amazon Marketplace is highly dynamic, and staying vigilant about competitors’ activities and broader market shifts can provide insights into changes in your advertising results. It’s essential to interpret short-term metrics in the context of competitor actions and marketplace dynamics rather than focusing solely on recent tweaks to your campaigns.

Mistake #6: Disorganized Account Management

Effective data analysis, metric assessment, and product advertisement tracking all hinge on proper account organization. Think of it like trying to work in a cluttered garage - it makes even simple tasks more challenging. Establishing a consistent naming convention for campaigns and ensuring sufficient segmentation within accounts will help you manage advertising efforts efficiently across your product catalog, while still allowing for budget allocation at the individual product level.

Mistake #7: Over-Reliance on Sponsored Products

While Sponsored Products campaigns are the most straightforward way to start spending on Amazon, they shouldn’t be the only focus. Many accounts miss out on valuable opportunities by not allocating sufficient ad spend to Sponsored Brands or Sponsored Display campaigns. This lack of diversification means missing exposure to different shopper segments and not leveraging the creative options that Amazon offers, such as lifestyle images and video ads. Consider dividing the ad budget among the three main ad types. For instance, perhaps allocate 80% to Sponsored Products, 15% to Sponsored Brands, and 5% to Sponsored Display, but these percentages should be adjusted based on specific goals. When targeting mid- to top-of-funnel advertising, it might make sense to focus more on Sponsored Brands or Display.

Mistake #8: Insufficient Research on Negative Keywords

When conducting Amazon keyword research, sellers typically focus on identifying high-volume, top-converting keywords to target with their ads. However, they often overlook the importance of identifying keywords that their ads should avoid - known as negative keyword targeting. While it's crucial to ensure ads appear for relevant keywords, it's equally important to prevent ads from showing up for keywords that drive traffic and clicks but fail to convert, or for keywords associated with unrelated products. If this happens, the ad budget can quickly be depleted with little to no return.

A common error sellers make is compiling a list of negative keywords without fully understanding the impact, leading to inefficient ad spending. Many sellers fail to utilize Amazon’s Customer Search Terms Report, which provides valuable insights into the keywords driving sales. However, because these reports offer data only at the ad group level, sellers may find it challenging to extract and leverage the most useful information effectively.

Mistake #9: Not being Sure Which Bidding Strategies Will Work

Amazon offers several bidding strategies— Dynamic Bidding (Up and Down), Dynamic Bidding (Down Only), and Fixed Bids. It's crucial for advertisers to understand the key differences between these strategies; otherwise, they risk wasting their ad budget.

Dynamic Bidding (Up and Down) allows Amazon to increase bids by up to 100% when there is a higher likelihood of conversions and lower it when the chances of conversions decrease. This approach is ideal for situations where bids are highly variable due to market fluctuations and where flexibility is needed in a bidding strategy.

Dynamic Bidding (Down Only) automatically reduces bids by up to 100% when conversion chances are low, helping to minimize overall ad costs. For those new to Amazon advertising, this strategy is typically a safer choice, as it helps manage costs more effectively without the risk of overspending.

With Fixed Bids, the amount set remains constant, and conversions do not influence the bid amount, regardless of market changes or adjustments.

Final Thoughts

Amazon advertising is a comprehensive process that demands careful optimization at every stage. Utilizing Amazon’s advertising tools is essential to grow Amazon businesses. That said, the entire advertising process requires a vigilant approach and meticulous attention to detail.