Sometimes, it’s about avoiding the massive mistakes that can silently drain your budget and sabotage your growth. This content discusses the common mistakes of Amazon PPC campaigns that brands often face, which can negatively impact their growth and profitability.
Table of Contents
Understanding the Significance of Amazon PPC
Amazon PPC or pay-per-click advertising, has become one of the most important marketing channels for brands selling on Amazon. With billions of customers visiting Amazon every month, PPC provides a great way for brands to get discovered, boost sales of existing products, and launch new items.
However, as the platform and advertising options become more sophisticated over time, it also gets challenging for brands to keep up and avoid common mistakes of Amazon PPC. If not managed properly, PPC can end up draining budgets without delivering results. So it is crucial for brands to understand the nuances of Amazon advertising and make informed decisions.
What is Amazon PPC?
Amazon PPC allows brands to bid on keywords related to their products and businesses to display their sponsored product listings at the top of relevant search results pages. Brands only need to pay when a customer clicks on their ads.
This pay-per-click model provides high visibility and allows targeting customers actively searching for solutions. Brands can launch search, product display, and shopping campaigns and leverage tools like Amazon Marketing Cloud for insights.
How to Avoid the Common Mistakes of Amazon PPC:
Some key ways for brands to maximise of their campaigns success while avoiding the common mistakes of Amazon PPC include:
1. Focusing Too Much on One Metric or One Product: The Trap of Optimisation Myopia
One of the most common mistakes in Amazon PPC is falling into the trap of optimization myopia, where brands fixate on one metric while losing sight of the overall strategy. Whether it’s driving down ACoS, maximizing impressions, or scaling ad spend, over-optimizing a single area can have unintended ripple effects on your business.
We work with large catalogues having 100s to 10s of 1000s of products. The highest-growth brands understand why and how not to put all of their eggs in one basket.
If we vet a prospective brand with overreliance on a small portion of their catalogue, we immediately show them how to promote products into their top seller’s cohort. This ultimately takes the pressure off the unavoidable instances where a product may be suppressed or a parentage is broken apart, as well as the numerous other random things Amazon will do to your listings.
Actionable Tip
Evaluate your key performance indicators holistically. Take a step back and measure how changes in one metric are affecting your overall performance. For instance, while a lower ACoS and higher RoAS might look great on paper, it’s only an efficiency metric that does not directionally indicate efficacy. Make sure to have a handful of metrics that can objectively measure effectiveness and directionality.
We have developed several that are dependent upon the brand’s overall objective, which we can quickly and easily shift as their goals change over time. A few considerations are: Ads CVR vs Total CVR (Unit Session %), CPA vs LTV, and various product level KPIs such as % of Spend vs % of Total Sales, % of Organic Sales, % of Ad Sales as well as a product’s Ads CVR vs USP etc.
2. The Dark Side of Attribution: Misleading Metrics That Could Be Costing You
With the rise of advanced attribution tools like Amazon Marketing Cloud (AMC), brands are getting better insights than ever before. But more data doesn’t always mean better decisions. One of the major pitfalls is relying too heavily on certain metrics, such as VCPM (Viewable Cost Per Mille) campaigns, which inflate performance figures.
The Hidden Truth
VCPM campaigns often look fantastic regarding ACoS or ROAS but are most commonly skewed by inflated attribution. This false sense of success can lead to wasted ad spend and missed opportunities for genuine growth.
Actionable Tip
Check the relative Cost-Per-Click (CPC). You may commonly see that VCPM’s CPCs are 2-4x your CPCs for non-view attribution ads.
3. In-House vs. Outsourcing: The Hidden Cost of Choosing the Wrong Option
Many brands face the dilemma of whether to manage Amazon Advertising in-house or hire an Agency Partner. While building an in-house team can be a valuable long-term asset, it comes with higher direct salary costs and hidden expenses like recruitment, training and staying up-to-date with Amazon’s rapidly changing features and algorithms. On the other hand, hiring the right Agency Partner can allow a brand to leverage lower costs, faster execution, and access to business-critical resources that may not be directly advertising related. That said, outsourcing to the wrong agency can lead to generic management and missed goals if not carefully vetted.
The Harsh Reality
Hiring an in-house team without a deep understanding of PPC fundamentals can be disastrous. But so can hiring an agency that doesn’t have the resources or experience to operate on-par with your business.
Actionable Tip
Before making this critical decision, weigh your options based on your long-term goals. If you opt for an Agency Partner, ensure they have credible experience in your selling category, catalog size, revenue tier, and tailor their strategy to your brand’s specific needs. It is also crucial to understand how the agency can support your Amazon business in the areas of SEO, Creative, and Catalog Management, as these services support the overall effectiveness of Advertising and Organic Growth.
If you’re going in-house, prioritize hiring a highly experienced Amazon Advertising Manager with references and at least 5 years of campaign management experience in your selling category. As an added bonus, look for candidates who have also managed the myriad of Amazon Marketing tools, such as Pricing, Coupons, Promotions, Subscribe & Save, Driving External Traffic and Third-Party Software Solutions. Finally, keep in mind that as your business grows, you’ll need to hire additional headcount to support your Advertising Manager.
4. Over-Reliance on SOPs: When Standard Processes Stagnate Growth
Standard Operating Procedures (SOPs) are necessary for consistency but can also become a crutch limiting creative thinking and agility. Amazon PPC isn’t static; it’s a dynamic landscape that requires innovation and a willingness to test new strategies.
The Creativity Conundrum
Rigid SOPs prevent your team from adapting quickly to industry changes or capitalizing on new opportunities. You need strategic thinkers, not just task managers, to navigate PPC effectively.
Actionable Tip
Review your SOPs regularly. Are they helping or hindering your performance? Encourage your team to question processes and suggest improvements. Foster a culture that values both consistency and creative problem-solving.
5. The Misuse of Budget: Wasting Spend on Ineffective Campaigns
A common yet devastating mistake is the inefficient allocation of budget. Too often, brands throw money at campaigns that look promising without diving into whether these campaigns align with their broader strategy. This is particularly true for brands that over-invest in branded keywords, inflating performance metrics while ignoring non-branded traffic.
Budget Drain Warning
Branded keywords might give you a false sense of security. While they often convert well, they don’t contribute to brand discovery or long-term customer acquisition via incremental sales. Relying too heavily on them will inevitably limit your growth potential.
Actionable Tip
Perform a budget audit. Analyze how much of your spend is allocated to branded versus non-branded keywords. Shift your focus toward campaigns that drive true brand growth, and ensure you’re investing in a balanced mix of strategies.
Also, always compare a SKU’s share of your account’s ad spend relative to its share of Total Sales. We commonly see brands that spend 2-3x a particular SKUs share of Total Sales. While that can be the case during a product launch, that should NOT be the case for a mature or declining product.
6. The Challenge of Continuous Learning: Falling Behind in a Rapidly Evolving Industry
Amazon PPC isn’t something you can set and forget. The pace of change is relentless, with new ad types, bidding strategies, and market trends emerging every few months. If your team isn’t continuously learning, your campaigns will inevitably fall behind.
The Knowledge Gap
Brands that fail to invest in ongoing education and adaptation risk losing their competitive edge. Even if your current strategies are working, they won’t be effective forever.
Actionable Tip
Schedule regular training sessions and industry updates for your team. Allocate a budget for attending Amazon-specific conferences or subscribing to expert-led PPC courses. Continuous learning is your best defense against market stagnation.
Get the best Amazon PPC results with Adverio
Is your Amazon PPC strategy suffering from any of these hidden pitfalls? Don’t let costly mistakes and overlooked inefficiencies hold your brand back. At Adverio, we specialise in proactive, data-driven PPC management that uncovers and addresses these pain points. By addressing these common mistakes we help brands experience the full potential of their Amazon advertising.
Reach out today to see how we can transform your Amazon advertising into a finely-tuned profit machine. Your next level of growth is just one smart strategy away.
Final Thoughts
Amazon Advertising is a powerful tool for brands but requires constant optimisation and a strategic approach to avoid common pitfalls of Amazon PPC. Over-relying on certain metrics, campaigns, or budget allocations can lead to wasted spend without growth. It is crucial for brands to have a data-driven management strategy, continuous learning, and flexibility to adapt to Amazon.
Frequently Asked Questions (FAQs) – Common Mistakes of Amazon PPC
1. What is Amazon PPC?
Amazon PPC (pay-per-click) advertising allows brands to bid on keywords related to their products and display sponsored listings. Brands only pay when someone clicks on their ads.
2. How can brands maximize their Amazon PPC success?
Brands should focus on multiple metrics, promote a variety of products, avoid over-reliance on certain campaigns, perform budget audits, and invest in continuous learning.
3. Should brands manage PPC in-house or outsource?
It depends on goals, budget and resources. Outsourcing can provide scale and expertise but requires vetting the right agency. In-house requires experienced hires but more control.
4. What are some common Amazon PPC pitfalls to avoid?
Fixating on one metric, relying too heavily on certain campaigns or products, using inflated metrics like VCPM, having rigid SOPs, and wasting budget on ineffective campaigns.
