Using Budget Rules to Optimize Amazon PPC Budgets

How annoying is it that the moment you take your eyes off of your well-managed PPC advertising budget runs out, you realize you could have sold more? Feeling like you missed out can be a think of the past thanks to Amazon’s PPC budget rules. But, there’s a method to properly strategize the rules before activating them.

Just like with our previous blog about preparing your Amazon year ahead, we’ll divulge tricks of the trade to help make the most of campaigns without burning yourself out or going out of budget.

Amazon PPC Budget Rules:

Two key budget rules that amazon offers are schedule-based rules and performance-based rules. Each has their own purpose and understanding them will help you to choose what is best for you.

Before getting started with Amazon PPC budget rules keep in mind:

  1. These rules apply only to sponsored product and Sponsored Display content, not brand ads just yet.
  2. Each budget rule is set at the campaign level. Have a look at all the ads running under a single campaign and ensure that they are relevant before beginning. 
  3. Currently, there is no centralized rule manager, so you will need to go into each campaign to check your rules. Consider your overall spend with other campaigns and rules when setting things up.
  4. While the initial setup process for performance-based rules is a bit more work, you will save time managing the campaign and will see a greater financial return on your investment.

Schedule-based rules:

Scheduled-based rules allow you to plan budgets far in advance based on a specific calendar date, usually surrounding holidays and special occasions. As the day approaches, daily budgets are raised and eventually the campaign reverts back to the original budget, set by you in advance. 

If you are looking to truly maximize this PPC strategy, consider that while this seems like the perfect system surrounding shopping holidays, it may also stop a well performing campaign from reaching its full potential. 

Performance-based rules:

Performance-based rules don’t surround any specific date. Instead, campaigns are automatically adjusted based on how they are performing. We like this system since it saves time and when using multiple rules, it reduces manual efforts while optimizing ad spend. 

Pro tip: Keep the budget high and don’t give an “end” date so the campaign can keep performing well even if it was activated for a specific occasion.

How to set up Amazon performance based rules:

As a seller, one of the main metrics to monitor is the Average Cost of Sale (ACoS). This indicator can tell you if your PPC campaigns are optimized along with giving you an indication if your spend is in the right range. Simply put, a healthy ACoS is a metric to help you identify if your ad spend is worth the return in revenue.

To use this metric to guide performance-based rules, set a maximum daily budget that you are willing to spend on a campaign. Then set at least two rules with various levels of budget that will automatically increase when hitting an ACoS performance threshold.

For example:

  1. Rule 1: If ACoS is below 20%, automatically increase the budget by 100%
  2. Rule 2: If ACoS is below 30%, automatically increase the budget by 50%

These help to keep the budget within a comfortable range, ensuring that prices are raised only when it matters most to you. 

Remember, when multiple rules are set, Amazon will default to the highest overall budget.

Step by step setup for Amazon performance based rules:

Step 1: Choose the relevant campaign

We recommend using performance-based budget rules during the year on any campaign. The benefit of this is that they will only kick in if the campaign is performing well and will turn off on their own if not.

Step 2: Set the rules

Step 3: Make sure the rules are working properly

In the following example the daily budget is $30 but the ACoS is below 20%, therefore it followed the relevant rule and automatically increased the budget by 100% to $60.

Pro Tip: Remember that when multiple rules are set, Amazon will default to the highest overall budget.

Top Amazon PPC rule tips:

Amazon’s advertising console offers powerful tools to help you manage and control your campaigns, including the budget.

  1. Amazon Budget rules allow you to better control  your campaigns budget. Once the rules are set, let the campaigns run year-round, not just during peak times. Why turn it off if running well?
  2. If ACoS is optimal, let the system increase your budget and enjoy the sales.
  3. Building on the above, if the campaign is performing well, don’t set a limitation on time. 
  4. Ensure that you already have an optimal daily campaign budget set before setting up the rules.

Instead of feeling limited by seasonal events or buying holidays, use Amazon’s budget rules to enjoy well performing campaigns and limit the impact of lower performing campaigns. Don’t wind down ad-spend if a campaign is giving the results you like. 

Always remember to monitor campaigns to make sure that their performance doesn’t fizzle out and use up the remaining budget that can go towards other top performers.

If you’d like to discuss how to optimize your budget, or have more insights to budget rules that you’d like to share, contact us!

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