Amazon Ads Recommending You To Increase Budgets?

Hey,


Inside your Amazon Ads Account, when you have a Campaign that is consistently spending its entire daily budget, you may see a 'recommendation' from Amazon telling you to increase your daily budget.

Should you blindly follow Amazon's advice, or should you ignore it?

That's what I'm going to answer for you today...

Take Amazon's Advice With A Pinch of Salt

When Amazon is recommending you increase your daily budget on a Campaign, it's not looking at the most important metric of that Campaign...

Conversions

All it's looking at is the spend and it's seeing that you're hitting your daily maximum spend (i.e. your daily budget) day in, day out.

Amazon may be recommending you increase the budget of a campaign that's never generated a single sale!

It's all too easy to just increase your budget and stop Amazon pestering you about it!

However, before you do, here are 2 important steps I'd recommend you follow:

#1 Check The Conversion Rate

The formula for calculating the Conversion Rate is:

((Orders + Borrows) / Clicks) x 100

N.B. You only need to include Borrows in your calculations if your books are enrolled in Kindle Unlimited. To work out borrows take the KENP Read from your Amazon Ads Dashboard for this specific Campaign you're looking at and divide it by the KENPC of the book you're advertising in this Campaign. (KENPC can be found in the 'Promote and Advertise' section in your KDP Dashboard for the advertised book).

Providing the Conversion Rate is at least 10%, for me, that's a Campaign that is worth spending more money on.

#2 Review Search Terms and Negate

The last thing you want to do is put more budget into a Campaign, only for it to be spent on irrelevant or poor-performing keywords and/or ASINs.

So, to counteract this, review the Search Terms of the Campaign you're considering increasing the budget on and negate any keywords and/or ASINs in here that are irrelevant, or that have 10-15+ clicks but 0 orders or page reads.

As well as the Search Terms, you should also look at the specific keywords and ASINs you're targeting (if it's a Manual Targeting campaign) and turn off any that just aren't converting, despite having plenty of clicks.

Gradually Increase Your Budget

Now your Campaign is in good shape and you understand how it's actually performing from a conversion standpoint, providing all is looking good, it's time to increase your budget.

However, Amazon often recommends pretty steep budget increases, often doubling (or more) your current daily budget.

You don't have to increase your budget that dramatically.

I would recommend increasing it in around 50% increments, for example:

Starting Budget: $10

Budget Increase #1: $15

Budget Increase #2: $22

Budget Increase #3: $30

This way, you'll be able to track the performance of the Campaign at the higher Ad Spend, run through steps 1 and 2 from above, and make a call on whether you want to continue increasing the budget.

In terms of the frequency of increasing the budget, once or twice per week is a good benchmark, as you'll have a few days worth of data to look at when deciding on the next budget increase.

Enjoy the scaling and do your own due diligence before you increase budgets :)

To Your Success

– Matt