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Everything you need to know about optimizing your budgets, with Sponsored Products
What are budgets, and why are they important?
When you create a new Sponsored Products ad campaign, the budget you set is one of the most important things to consider.
Firstly, it is important the budget you set is sustainable for your business. Secondly, your allocated budget should align with helping you achieve your advertising goals.
With a strong strategy, and the help of our many features and recommendations, your budget can help you on the path to a successful advertising strategy that helps you gets the results you want.
How it works and why it matters
Definition: ‘daily budget’
The amount you are willing to spend on a Sponsored Products campaign, each day.
When setting up a Sponsored Products campaign, you can set up a daily budget. This is the maximum amount you will spend on running your ad campaign. Setting a daily budget can help give you more control over your spend, and allows you to more easily manage your costs.
Remember.
Your daily budget is averaged over the course of a calendar month. That means you could spend less than, or up to 25% more, than your average daily budget, on any given day. This flexibility allows you to benefit from high traffic days, but still means you won’t spend more than wanted to. For example, if your daily budget is $10, then your actual spend on a day could be $12.50 (25% higher), but overall your monthly spend would equal out to $300. Remember, you can change your daily budget at any time
Top 3 tips
— Gordie Murphy, Fishoholic, US advertiser[Advertise] within your own budget. You’ve got to budget with what makes sense. We still do that. Our numbers are significant to our business and how we're growing.
What to do when your campaigns run out of budget
‘Out of budget’ definition:
when a campaign you are running has used up the allocated daily budget because your ads have been served to relevant shoppers
Daily budgets are spent as quickly as possible, because all available impressions for your ads to show to relevant shoppers are taken. This means that a smaller budget could be spent in a few minutes if there are a large number of shoppers engaging in your advertised products on Amazon. Once a campaign is out of budget, your ads won’t be eligible to show until the next day, at midnight, when the daily budget resets.
Proofpoint
Advertisers who ran out of budget* during 2020 missed 2.1x additional sales on average, compared to advertisers who didn’t run out of budget.**
*Advertisers are considered as having run out of budget if, during 2020, their Sponsored Products campaign ran out of budget at least 50% of the time. Amazon internal data, WW, 2020.
**Advertisers are considered as having not run out of budget if, during 2020, their Sponsored Products campaign were in budget at least 50% of the time. Amazon internal data, WW, 2020.
Remember.
When your campaign runs out of budget, here’s what to do.
Top 3 tips
How to make the most of your budget, in any scenario
It’s a good idea to regularly check in on your budgets, and see how they are performing. Here are some of the scenarios you may encounter with your budget, and ways to optimize your campaigns if you spot them.
Action: Great news. Now, try the following:
Action: If you’re not seeing return on your ad spend, try the following
Action: This is a good place to be, so try the following:
Action:
Review and optimize your campaign bidding, targeting and product, and if you do not see any improvement, then consider reducing your budget and reallocating it to a high-performing campaign
Utilize this feature for campaign insights and recommendations
Budgets page (beta) is a page within campaign manager that displays performance metrics about your launched campaigns. These insights can help you update and improve your campaigns, by showing you the potential of your campaigns when they are in budget, as well as opportunities to optimize them and specific recommendations for how to do this.
The metrics available on Budgets page (beta) are:
* Based on similar campaigns (with similar products and targeting) in the same marketplace which did not go out of budget, we used machine-learning to estimate missed clicks. Then using the historical CTR and historical sales together with the estimated missed clicks, we can also calculate the estimated missed sales and missed impressions. Like any predictive model, these metrics are estimated for reference only and are not guaranteed.
** Same as missed opportunities, the recommended budget is also based on the machine-learning model’s estimated missed clicks. We also estimate the CPC based on your campaign’s historical CPCs and taking into account other factors including seasonality. Then, we calculate the recommended budget as estimated missed clicks * estimated CPC. Adopting the recommended budget might help advertisers to avoid missing these opportunities.
Make the most of shopping events with this feature
Budget rules is a functionality that allows you to set rules for your campaign budget. When applied, budget rules will automatically increase the daily budget of your campaigns for key shopping events, and adjust your budget accordingly based on a campaign’s performance.
The benefit of this automatic optimization is that it helps your campaigns stay in-budget for longer, helping to increase your chance of impressions, clicks and sales. Budget rules also reduces manual effort when optimizing your campaign’s budgets, by automatically adjusting, maintaining and optimizing budgets during high-traffic days.
There are two types of budget rules you can choose from:
Action: Increase your daily budget, or apply a budget rule that recurs daily
Action: Apply a schedule-based budget rule that increases your budget only on a weekend; 20% is a good starting point
Action: Apply a schedule-based rule to run during that specific time period. And remember, Amazon will provide you with recommendations for key shopping events
Action: Apply a performance-based rule set to increase your budget when your campaign performance hits your specified criteria
Thank you for reading
Budgets—the basics and best practice, for Sponsored Products