How to launch product on Amazon with sponsored products ads

How to launch product on Amazon with sponsored products ads

Many tutorials on internet recommend to set up manual campaigns, targeting few keywords which will match your product. It is a good practice BUT we only advise expert Sellers, who have a deep knowledge of their market and loads of experience in launching new products, to take that road.

Moreover, going for a manual setup requires in depth analysis at keyword level, market expertise and surgical bid management. This manual launch can be much more time consuming than the one we will describe in this post.

Our method proved to be easy to implement. It takes less than five minutes to set up. It works for most of the categories available on Amazon. And you don’t need to have been working in the search marketing industry for decades to adjust your bids.

Find below the simple blueprint which we’ve been successfully using with our customers.

Set up your PPC campaign in 5 minutes

Which PPC campaign type should you use?

Without a doubt, you should go for Sponsored Products campaigns with automatic targeting. Automatic targeting is great, because you benefit from Amazon’s market expertise. These guys have done the research job for you and their automated logic targets keywords and products that are similar to the product in your ad. The m19 technology is also using these auto campaigns in its algorithms, as a source for keywords generation.

And these campaigns proved to have a great time to efficiency ratio.

Which bidding strategy ?

We advise to use “Dynamic bids - down only”, which is the default set up of Amazon Sponsored Product campaigns. Your are capping your maximum bid, which makes sense in a generalized second-price auction market. It minimizes your risk of spending too much.

What is the best campaign structure ?

We recommend keeping things simple while being granular enough to manage performance at product level. Since you are launching new products, you should not have hundreds or thousands of ASINs to deal with. So, creating one Ad group per ASIN is a good practice. It provides a good balance between bidding on keywords specific to each product and mutualizing search terms data. Your campaign structure will be quickly implemented and easy to maintain. And you will make better decisions.

For Sellers launching products with multiple variations (size and color in fashion, for instance), just create one Ad group per parent ASIN. You’ll end up with a campaign structure which remains manageable but is granular enough to drive good results.

How much should you bid at launch?

Once again, we are providing a blueprint for people who are launching a new business or a new product. They are looking for efficiency and tend to minimize their financial risks. An expert Seller who has a deep knowledge of his market and loads of experience in launching new products would probably tailor his bids manually. BUT we’ve seen that automation drives good results at scale and saves tons of time. That’s why we recommend to start with the bids suggested by Amazon for each targeting.

After reading these notes, you should have launched your Sponsored Product campaign, with one Ad group per product. We hope you are using automatic targeting and bids suggested by Amazon.

Read the next section to learn how to adjust your bids post launch.

Daily bid management in 5 minutes

How do you adjust the bids ?

We recommend you go through this routine, for each of your products. It can seem a little cumbersome the first time you read it. But once you’ve done it twice, you’ll probably find it easy and fun!

For those who don’t like to read, we’ve put together a graph summing up everything at the end of this section.

First question for you: did you get advertising sales?

YES, you got advertising sales! That’s great. It starts to pick up. Now, is the amount of ad sales bigger than your spend?

  • If yes, once again that's cool. You’re getting there. Check how far your actual ACOS is from the level of profitability you expect from your products. Keep in mind that you are launching new products, so your profit will be lower than what you get from mature products.
  • Your actual ACOS is above your profit expectations (90% vs. 50% for instance). You possibly want to decrease your bids. Be careful, do it gradually. You don’t want to cut your traffic.
  • Your actual ACOS is below your profit expectations. Man, you’re a king! But you should think about increasing your bids to get more traction. You are probably under investing.
  • Your amount of ad sales is smaller than your spend, You may want to consider decreasing your bids. It really depends how far you are from 100% ACOS. Keep in mind that at launch, it makes sense to invest more than your amount of ad sales to support your products.  

If you did not get advertising sales, don’t worry.

It takes time to ramp up a new product. Consider also additional means, like increasing the number of reviews you get from organic sales. The next question for you: is your daily spend above the budget you had in mind?

  • Your daily spend is above your planned budget. It is time to start decreasing your bids. One word of caution: if you stay in this situation for several weeks, you are probably not dedicating enough budget to your launch. Think about adjusting your launch strategy.
  • Your spend is below your planned budget. Then, check the number of impressions you get from your ads. Are you getting enough impressions? This one is a more difficult question, because the threshold is specific to each Seller. Compare your numbers with existing products. Just to give you an idea: with a 0.1% Click Through Rate and a 2% Conversion Rate, you need 50,000 impressions to get a conversion.
  • If you don’t get enough impressions, it’s time to increase your bids. You need to generate more traffic to get your first conversions.
  • If you are getting lots of impressions, you probably have a conversion issue which is not related to advertising. Decrease your bids and try to understand what is impacting your conversion rate. Check your availability, check your price competitiveness, check the content of your detail page, check your reviews.

Bid adjustments in a chart (for those who don’t like to read)

When to start Amazon advertising

How often do you need to change the bids ?

At the beginning, you should do it every day. After a week or two, and if the performance has been good enough during the last few days, you can space out the adjustments. Check your results every two to three days and adjust the bids accordingly.

How much should you increase or decrease the bids ?

First of all, bid adjustments need to be done gradually. You really want to avoid big swings which will throw away the work you’ve already completed. Keep in mind that your auto campaigns are also building up an asset: the list of keywords and product pages which drive conversion to your products. This data will be useful for you in the future.

When it comes to bid adjustments, the rule of thumb is to scale your bids up or down proportionally to your goal. Let's go through a couple of examples.

Your spend is above your planned budget. Let’s assume you spent $30 yesterday and your daily budget is around $10. You want to decrease your bids. You spent three times more (3x) than what you planned to spend. We would recommend to scale down (divide) your bids by a 3x factor. If you were bidding $1, decrease your bid to $0.33 ($1 / 3 = $0.33). Be careful, that’s a big swing. Still, everything being equal, you should be close to your planned budget.

Your spend is bigger than the amount of Ad Sales you get. Let’s assume you spent $25 and you got $10 of Ad Sales. You are spending two times and a half more (2.5x) than what you get in terms of advertising sales. Same logic, you can divide your bids by 2.5, to try to target an actual ACOS of 100%. If you were bidding $1.5, you can adjust your bid to $0.6. Once again, that’s a big swing. If you can support the costs, it is better to gradually scale down your bids. Go down to $1 for one or two days and see what the results are before deciding to bid $0.6.

Your actual ACOS is above your profit expectations. Let’s assume your actual ACOS is 90% and your profit expectation is around 45%. You want to decrease your bids. In this example, your actual ACOS is two times bigger (2x) than your expected profit. So, when you are decreasing your bids, you don’t want to go below half of their current value. We would recommend to scale down (divide) your bids by a 1.5x factor. If you were bidding $0.75, adjust to $0.5.

Key takeaways

Launch your products on Amazon using Sponsored Product campaigns. Create one Ad group per product. At launch, rely heavily on Amazon automation for targeting and bids.

Update your bids on a regular basis, and at least every day during the first week. Scale your bids up or down depending on the results you are seeing and how far you are from your goals.

When you feel that your products have ramped up (it can take up to two or three months), you can switch to bidding in exact on your best performing keywords and product pages.

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Tarik Berrada Hmima
April 10, 2024
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