Advertising cost of sale (ACOS) refers to the percentage of money you spend on advertising compared to the revenue generated from that advertising. 

A low ACOS, soon after launching your product, in which you only spend 30% or less of your profits on advertising, is ideal. A higher ACOS, in which you spend above 50% or 60% of your profits on advertising is concerning (and unsustainable) 😨 

Today, I’m going to give you five ways to address an ACOS that is too high so that you can optimize your paid advertising campaigns and move to profitability faster.  

1. Check your Keyword Targeting PPC campaigns for relevancy.

When you first launch your product and run PPC campaigns, your ACOS might be as high as 200%. That’s ok.

The goal of your first few weeks on sale is to learn how shoppers search for—and arrive at—your product type so that you can learn how to best target your ideal customers. You’re just collecting data and learning.

However, once those first few weeks have passed, you should have a solid understanding of which keywords shoppers use to browse your product type. Your ACOS should come down as you increase ad spend on highly relevant keywords and decrease on words that don’t serve you as much. This will allow you to better target your ad dollars and eventually decrease your ad spend altogether.

So what happens if at this stage your ACOS is still unsustainable?

Audit your existing Keyword Targeting PPC campaigns for relevancy. 

Go through each of the keywords that you currently bid on and assess them: are they related to your product? What other products appear when customers search your keywords? Do your keywords loosely pertain to your product or do they actually describe your product?

For instance, if you sell dog pool floats that can hold any size dog, including large dogs, you might bid on the keyword “pool floats for large dogs”.

However if you’re also bidding on the keyword “large dogs”, you might be causing your own problem. While “large dogs” could be described as an attribute of your product, it’s only loosely related to the product itself. More importantly, customers who search “large dogs” on Amazon are likely not secretly looking for a dog pool float. 

Once you’ve thoroughly vetted your keywords for relevancy, adjust your bids accordingly.

2. Lower your keyword bid amounts where appropriate.

You may think that if you’re bidding on a keyword that turns out to be irrelevant to your product that you should automatically set those keywords as negative keywords. 

Negative keywords are keywords that you target so as to not bid on them or appear in search results when shoppers search them. 

Even if you find a keyword that is not making you any money in your campaigns, that doesn’t mean you should pull the trigger on making that word or phrase negative. Let’s recall our dog pool float to explain:

Perhaps your PPC campaign did include “large dogs” and sure enough, that word was only costing you money. If you make “large dogs” a negative keyword, however, your product will not appear in search results if a shopper searches another, relevant, keyword to your product in tandem with “large dogs”. 

So if shopper Bobby McGee searches “pool float for large dogs” (which is one of your stronger keywords), your float will not appear because Bobby specified “large dogs”. 

Instead of cutting the keyword off, reduce your bid. Remember, you still want to rank for some searches related to “large dogs”, you just don’t have to blow your entire ad budget on it. 

PPC is a complex, detailed system…that just so happens to be crucial to your success on Amazon FBA. You don’t have to figure it out entirely on your own. In fact, we dedicated an entire section of our Amazon FBA Mastery membership exclusively to creating, running, analyzing, and optimizing PPC ad campaigns. Get step-by-step training and our exclusive tricks at JOD.com/freedom.

3. Set irrelevant keywords to negative keywords.

Ok, I’ll admit there may be certain instances in which your ad campaign contains a word that in no way, shape, or form would ever lead a customer to your product or could be intelligently used in association with your product. For example, if you found “rubber ducky” in your PPC campaigns for your dog pool float…well…you get the idea. 

In that 1% chance case, save your money and set that totally irrelevant word or phrase to a negative keyword match. There was no chance your product would rank for it, anyway.

But what if your product appears in relevant search results but either gets few clicks or gets lots of clicks with no conversions to show for it? 

4. Split test your listing’s photos and copy.

Amazon shoppers buy predominantly with their eyes. 

Not even the most perfectly optimized PPC campaign with the best, most relevant keywords to your product can make up for an ugly main product image (in the case of views but no clicks). It also can’t overcome shoddy information, bad spelling and/or grammar, or sloppy typos and layout within your listing’s copy (in the case of several clicks but few conversions). 

If your featured image looks like this French press type item, it’s time to retake your product photos (we’ve got 15 tips ‘n tricks to make them stunners). 

Upload a new main image, leave it for two weeks, and record your sales during that time. Then, upload a different, new, main image, leave it for two weeks, and record your sales. Whichever photo brings you the most sales over its two week test is the one you should leave in place permanently. 

This process is called split testing: it allows you to determine what appeals to shoppers most. And you can also practice split testing with your listing’s copy: you might adjust your listing title, bullet points, description, and/or A+ content in the same way. This will help you optimize your product listing beautifully…so that you don’t scare away potential buyers who might actually love your product. 

I have one last trick if you’ve tried all of the above and you still have an unwieldy ACOS.

5. Implement Product Targeting PPC campaigns.

Maybe your keywords aren’t your problem. Maybe you’re selling in an overly-competitive market (which we teach our students to avoid altogether), and there are hundreds of other sellers bidding for the same few, stellar keywords, driving the prices for the coveted top ranks in shopper search results up into the stratosphere 😳

In that case, you might opt for more Product Targeting PPC campaigns instead of solely focusing on Keyword Targeting campaigns.

You can learn more about them here, but in a nutshell, product targeting campaigns are the same as keyword targeting campaigns…except you bid to appear in the Products related to this item section of another product’s listing rather than to appear in specific keyword searches. 

You might bid to appear on the same product type as your own (in the hopes of stealing the sale) or a companion product to yours (in the hopes a customer makes multiple purchases). For instance, you might set up a product targeting campaign with a popular manual air pump to boost your dog pool float’s conversions. Afterall, what good is a pump with nothing to inflate?

Essentially product targeted campaigns can help get you in front of the right shoppers if your product’s keywords are in high seller demand. And by decreasing your keyword ad spend in favor of product targeted campaigns, you can thus reduce your overall ACOS, even if you’re stuck with coveted keywords. 

What we’ve just covered has been extremely high level; we’ve only scratched the proverbial PPC surface (there’s tons to learn). 

If you’re looking for step-by-step instructions to create, run, and optimize your PPC ad campaigns, help launching your first Amazon FBA product, or even for assistance setting up your company (and choosing a name!), we can help. Our Amazon FBA Mastery membership covers the entire Amazon FBA process—start to finish. If you are dead set on living your dreams, visit JOD.com/apply where you can speak with a member of our team who will help you decide if we are the right fit for your journey. 

What PPC strategy will you optimize your campaigns with? Let me know in the comments.