Goal Setting with Amazon Advertising

The Problem

At the risk of sounding obvious, without understanding what you're trying to achieve, a piece of software will typically need to make a vast number of assumptions and may tend towards a one size fits all or the most common use case when building rules or algorithms.

🔑In Amazon PPC, perhaps the most crucial assumption is campaign
success is defined by an RoAS/ACoS target (i.e. the actual quantitative metric to measure success).

For a start, both Amazon Advertising and Seller Central don't allow for a user to input an ACoS target. Some third party tools do allow this though. However, in many cases, ACoS (or some sort of profitability metric) is justified. 

In quite a lot of cases though, it's not:

| What if you're doing a product launch?

| What if you're trying to maximise new-to-brand customers?

In these two cases, optimizing towards an ACoS can do more harm than good.

Why? 

In the first case, a product launch is all about gaining a critical mass of sales to help build momentum and to generate reviews (Of course, a PPC campaign is only a sliver of what's needed for a successful launch.) So the initial target is generally a sales volume number, sacrificing ACoS (i.e. profitability) in the short term. 

In the second case, maximizing new-to-brand customers can mean a focus on targeting competitor terms and ASINs, foregoing many of your own branded terms which can often be your most profitable terms (i.e. a high RoAS/low ACoS).

In both cases, algorithms that assume an ACoS target are harmful; delaying the learning period of bidding strategies for product launches and focusing on the wrong keywords for new-to-brand use cases (Such as too much focus on branded terms which will typically have a low ACoS for instance). 

Nozzle's Solution

We believe the key is to simply ask a user right at the beginning of creating a campaign what their goal is. For instance:

1. Are you trying to hit an ACoS target?
2. Are you trying to maximize new-to-brand customers?
3. Are you doing a product launch?

Once we understand how you're measuring success, we'll ask you to input an actual number. So if you're ACoS focused, we'll ask you to put in a target (better yet, we can help you calculate a breakeven ACoS so we can default to your breakeven ACoS).

Once we understand this, it helps on two levels:

1. Crucially, it allows us to allocate your daily budget across match types (i.e. research match types such as Auto, Broad, Phrase and Performance match types such as Exact or ASIN targeting). This matters enormously when it comes to achieving your goals - you don't want a large budget allocation on branded terms if you're trying to attract new-to brand customers! 
2. The actual bidding algorithm is better calibrated. This means, for instance, the algorithm is more sensitive to changes in the bid price. Bidding $3.00 vs $3.10 matters a lot more if you're ACoS focused when compared to a product launch. In fact, a more constrained algorithm or bidding strategy can slow down the quick learnings that a more unconstrained algorithm can have as it has the freedom to explore more strategies. Remember, you always have the daily budget to cap spend!

Nozzle's bid optimisation tool's campaign goal selection

We think this is a powerful, yet simple feature to help users achieve their goals - whatever they may be!

We launched Nozzle's bid optimization tool on Aug 1st 2020, and we're always looking for new partners to sign up to our Pioneer program.