How to Cut PPC Ad Spend Without Losing Traffic
Three ways to reduce PPC:
First, time-sharing discounts; second, keyword bids; and third, audience premiums.
- Time-sharing discounts. Whether it's the keyword or audience-sharing discount formula, the final factor is multiplied by the percentage of time the ad is displayed, which is the time-sharing discount.
So, by reducing the time-sharing discount percentage, you can reduce CPC, which means lowering the average CPC. For example, if the keyword bid is 1 yuan, the audience premium is 20%, and the time-sharing discount is 50%, then the keyword fee is 0.5 cents and the audience fee is 0.6 cents. This example shows that reducing the time-sharing discount can indirectly reduce PPC. However, don't constantly reduce the time-sharing discount. The lower the discount, the higher the price of the first item. Therefore, adjust it appropriately according to the situation. Excessive adjustments can affect data stability. Adjustments should be made within a range of 5-10%.
- Keyword Bids: Lowering keyword bids has a more pronounced effect on reducing PPC. Observe the data for an hour after lowering it. Keep the data (impressions, click-through rate, and traffic) stable. All metrics are stable or fluctuate minimally.
Keyword price adjustments shouldn't be too large; it's best to maintain the original position after the adjustment. Bids can't be lowered forever; there's a critical point. Too low a price will result in a loss of traffic, so don't chase the lowest price.
- Audience Premium: Audience Deduction = Keyword Bid * (1 + Audience Premium Ratio) * Time-Sharing Discount. This formula shows that lowering the audience premium can reduce audience deductions, which directly reduces PPC. Adjust the amount by around 5%. Observe the data after the adjustment to ensure stability. These are three ways to reduce PPC. As long as optimization is in place, reducing PPC isn't a major problem. Importantly, avoid extreme PPC. Lowering PPC indirectly reduces traffic. If your PPC is working well and you're within acceptable limits, there's no need to pursue extremes.
It's important to note that you shouldn't adjust all three of these simultaneously, as this can have a significant impact.
Before lowering your PPC, it's important to know your industry's PPC so you can determine how to lower it. Generally, aiming for a PPC below your industry average is sufficient. First, use the traffic analytics tool in the Direct Express backend to search for a key industry keyword. Use the industry market bid to estimate your industry PPC, which will make the process easier.
Make Your Daily Budget More Reliable
One of the variables you set in your Amazon PPC campaign is your daily spend. If you run out of ad spend early in the day, you're losing potential sales.
You might need to increase your budget for the day, but that won't solve the entire problem. You need to review your daily spend to understand which keywords are driving clicks and which ones are actually converting.
This is especially important if you're using adjusted bids.
When developing your Amazon PPC strategy, always remember:
① Impressions are free, but they're only the first step in the purchasing process.
② Clicks cost you money (the cost of successfully bidding on the keyword you won), and if they don't convert, you lose money.
③ Conversions bring you revenue, boost your rankings, and lower your CPC (cost per click) and ACoS (advertising cost of sales). This is the key point.
With this in mind (and your goals), review your search term reports to understand where your clicks are coming from.
Once you've determined where and how your budget is being spent, and which keywords are driving the most revenue for your ads, you can make adjustments to reduce wasted ad spend and allow you to bid higher on high-converting keywords.
You can further improve the efficiency of your Amazon PPC strategy by reviewing your sales reports to identify the times and days with the highest conversions.
For days and hours without conversions, consider turning off your ads to save spend and create a better sales window.