Many Amazon sellers face a common challenge: despite substantial budget allocations for automatic advertising campaigns, their Advertising Cost of Sale (ACOS) remains stubbornly high, eroding profit margins. This scenario, while frustrating, represents a critical juncture for operational refinement rather than cause for alarm. By systematically analyzing and adjusting campaign strategies, sellers can effectively control and optimize their ACOS metrics.
New Product Phase: Low Budgets and Gradual Accumulation
During the initial product launch period, listings typically suffer from limited reviews and unproven price competitiveness. Automatic advertising campaigns in this phase often generate traffic with suboptimal conversion rates. Unlike manual campaigns, automatic ads cast a wide net, pulling traffic from competitor pages based on listing content. This broader approach inherently reduces traffic precision.
Key strategies for this phase include:
- Implementing conservative budgets and bids rather than pursuing maximum exposure
- Setting daily budgets between $5 for niche products and $10 for competitive categories
- Considering enrollment in the Vine Voice program to accelerate credible review accumulation
Review Gap Period: Leveraging Authentic Evaluations
While awaiting organic review growth, sellers can strategically employ verified purchaser reviews to enhance conversion rates. Authentic evaluations, when obtained through compliant methods, can significantly improve listing performance and subsequently reduce ACOS. Strict adherence to Amazon's review policies remains paramount during this process.
Review Accumulation Phase: Precision Targeting Through Data Analysis
Once listings achieve sufficient review volume, sellers should transition from exclusive reliance on automatic campaigns. The strategic approach involves:
- Analyzing automatic campaign data to identify high-performing keywords
- Migrating these keywords to manual campaigns for precise targeting
- Implementing a tiered filtration system to progressively refine traffic sources
This layered approach enables more accurate keyword targeting, improved conversion rates, and ultimately better ACOS performance through enhanced return on advertising spend.
The Enduring Value of Automatic Campaigns
Even as manual campaigns take precedence, automatic advertising maintains critical functionality within a comprehensive Amazon strategy. These campaigns serve as:
- Continuous keyword discovery tools for manual campaign expansion
- Testing platforms for listing optimizations and creative variations
- Supplementary traffic sources for broad-market exposure
Rather than discontinuing automatic campaigns, sellers should maintain them as integral components of their ongoing optimization processes.
Effective ACOS management requires methodical progression through distinct operational phases—from cautious new product introductions to review accumulation and precision targeting. By implementing these strategic adjustments at appropriate intervals, sellers can transform advertising expenditures into sustainable profitability.