Amazon bids at high ACoS are best lowered step by step and by rule: if the ACoS of a keyword or target is above your target value and it has collected enough clicks, the bid falls by a small, fixed share. A lower limit and a waiting period between two changes prevent the same bid from falling further with every run.
This is how you arrive at a rule that suits your account.
What does “high ACoS” actually mean?
The ACoS (Advertising Cost of Sales) is the ratio of advertising spend to advertising revenue: ACoS = advertising spend ÷ advertising revenue. Whether a value is high is decided not by Amazon, but by your goal. Some companies want to be particularly profitable with their advertising, others pursue maximum sales at a break-even ACoS, and still others deliberately run unprofitable campaigns in order to gain market share.
The first step is therefore always a target value – per product, not for the whole account.
Why does a lower bid help?
The bid is the amount you bid for a click. Mathematically, the ACoS depends on three variables: the cost per click, the conversion rate and the order value. If the conversion rate and the order value remain the same, the ACoS falls along with the cost per click.
The downside: a lower bid can cost visibility. Mathematical algorithms unfortunately often tend to lower bids too sharply, which can impair the overall performance in your account. That is why a good rule includes four building blocks.
Which four building blocks does the rule need?
- Enough data. An ACoS from three clicks is chance. A minimum number of clicks in the period under review ensures that the rule only judges keywords that it is able to assess.
- Small steps. A reduction by a fixed, small share leaves you the possibility of seeing the effect before the next step follows.
- A waiting period. After a bid change, new data is needed. The condition “at least x days have passed since the last bid change” prevents the same bid from falling again with every run. For this, PPC-Butler has the Change KPI.
- A lower limit. Minimum and maximum bids help to avoid extreme changes. For a lowering rule this means: never below your minimum bid, and never upwards.
How do you stay in control?
In PPC-Butler you see exactly which workflow was applied to which campaign and to which keyword before the bid is set on Amazon. And if a rule has gone too far after all: one click and everything is undone.
Example rule: lowering the bid at high ACoS
- IF ACoS (last 30 days) > 25% AND clicks (last 30 days) ≥ 15 AND ≥ 3 days have passed since the last bid change → THEN bid × 0.85 (minus 15%), lower limit: your minimum bid, an increase is excluded.
The image above this article shows the same case: the target value is 25%, the ACoS is 45% – the rule lowers the bid step by step, at most down to the minimum bid.
All figures in this rule are example values. You set the ACoS threshold, the number of clicks, the waiting period and the step size yourself – in line with your margin and your goal per product.