Introduction: Growth With Control
Amazon ads can drive explosive growth—or quietly burn your margins. Winning teams scale intelligently, using a structure that discovers demand, harvests what works, and protects profit. This guide shows you how to build that system, step-by-step, and keep ACOS aligned to your contribution margin.
1) Set the Right North Star: ACOS and TACOS
- ACOS (Ad Cost of Sales) = Ad Spend ÷ Attributed Ad Sales. Great for campaign-level efficiency.
- TACOS (Total ACOS) = Ad Spend ÷ Total Sales (ad + organic). Great for business impact.
Rule of thumb:
- In launch/scale phases, accept a higher ACOS if TACOS is trending down over time (ads are lifting organic rank).
- In sustain/profit phases, target stable or improving ACOS while maintaining a low TACOS.
Guardrails:
- Tie bids to contribution margin (post-Amazon fees, COGS, pick/pack, freight). If your break-even ACOS is 28%, aim for targets below that unless you’re intentionally buying rank.
2) The 3-Layer Campaign Framework
Layer A: Prospecting (Find Demand)
Goal: Discover profitable traffic.
Campaign types:
- Sponsored Products – Auto (close/far match; complements; substitutes segmented where possible)
- Sponsored Products – Broad/Phrase keywords
- Sponsored Products – Product targeting (category + refined by price, rating, Prime, etc.)
- Sponsored Brands (Discovery headline + brand story; test video early)
Setup tips:
- Separate ASINs by hero vs. long-tail variations.
- Cap budgets to control exploration.
- Use compelling main images and benefit-packed titles to boost CTR.
Layer B: Harvesting (Scale What Works)
Goal: Capture proven queries and ASINs from search term reports.
Campaign types:
- Sponsored Products – Exact (top converting queries)
- Sponsored Brands Video – Exact
- Sponsored Display – Product targeting (winning ASINs, competitor ASINs where you convert)
Setup tips:
- Move proven terms from Prospecting → Exact, set higher bids, and protect placement with bid modifiers.
- Keep harvesting weekly: new winners in, weak performers out or back to test.
Layer C: Profit (Defend & Monetize)
Goal: Monetize your product detail pages and preserve market share.
Campaign types:
- Sponsored Display – Defensive (your own ASINs: upsell bundles, variations, higher AOV)
- Sponsored Products – Product targeting on your ASIN family
- Sponsored Brands – Store spotlight to keep shoppers in your brand
Setup tips:
- Use cross-sell and upsell (e.g., multi-pack, premium bundle).
- Defend hero listings aggressively during peak demand or promo windows.
3) Targeting That Converts
Keyword Targeting
- Exact for high-intent winners (Harvesting).
- Phrase/Broad for variation discovery (Prospecting).
- Use negatives to cut bleed (irrelevant sizes, materials, competitor brand terms if not converting).
- Prioritize keywords where your content matches the query (title, bullets, A+ claims).
ASIN/Product Targeting
- Competitor conquesting: Target similar price/ratings; avoid punching up too far early.
- Complementary: Pair with products that are frequently bought together to lift AOV.
- Defensive: Keep shoppers inside your brand ecosystem (variations, bundles).
4) Creative That Lowers CPC and ACOS
Sponsored Products:
- Main image must be crisp; avoid clutter.
- Title front-loads primary keyword + value prop (size/variant/USP).
- Price cues and coupons help CTR and conversion.
Sponsored Brands (SB & SBV):
- Headline formulas:
- Problem → Outcome (e.g., “Sore Back? Sleep Pain-Free Tonight”)
- Social proof (“30K+ 5-Star Reviews”)
- Value prop (“Clinically Tested. Results in 7 Days.”)
- SB Video: First 1–2 seconds matter. Show product + payoff, add clear overlaid benefit text, end with a callout (“Prime Free Shipping”).
- Test multiple thumbnails and hooks.
Sponsored Display:
- Visuals with contrast; call out benefit or offer (“Save 10% Today”).
- Retargeting creatives should echo listing images for continuity.
5) Bidding & Budgeting by Lifecycle
Launch (Weeks 0–4)
- Objective: Index broadly, gather data, build early momentum.
- Prospecting budgets 60–70%, Harvesting 20–30%, Profit 10%.
- ACOS may be higher; monitor TACOS trend and early rank lift.
- Raise bids on CTR>click share winners even if ACOS is temporarily high.
Scale (Weeks 4–12)
- Objective: Double down on winners, trim waste.
- Shift to Harvesting 50–60%, Prospecting 25–35%, Profit 10–15%.
- Use placement modifiers (+Top of Search) where conversion is better.
- Introduce SBV for star queries; expand ASIN conquesting.
Sustain/Profit (Week 12+)
- Objective: Maintain rank & margin.
- Harvesting 50%, Profit 30%, Prospecting 20%.
- Tighten targets to contribution-margin goals.
- Retargeting + brand defense stabilize ROAS.
6) The Weekly Optimization Checklist (30–60 minutes)
- Search Term Report:
- Add new converting queries → Exact.
- Add non-converting queries → Negatives.
- Bids:
- Increase bids on keywords/ASINs with strong conversion and below-target ACOS.
- Decrease or pause on persistently poor performers.
- Placements:
- Boost Top-of-Search if it’s significantly more profitable; reduce if not.
- Budgets:
- Reallocate from capped/high-ACOS campaigns to proven harvesters.
- Creative:
- Swap in stronger images or SBV variants if CTR is lagging.
- Page Health:
- Fix price, stock, reviews, or Buy Box issues impacting conversion.
7) Common (Costly) Mistakes to Avoid
- Running only Auto: You’ll miss harvesting and overpay for discovery.
- No negatives: Bleed from irrelevant queries balloons ACOS.
- Ignoring creative: Low CTR raises CPC. Fix the ad, not just the bid.
- Chasing ACOS only: Starve growth; watch TACOS and contribution margin.
- No lifecycle strategy: Launch ≠ Sustain. Adapt budgets and bids.
- Mixing hero & tail ASINs in one campaign: visibility and budgets get skewed.
8) Measurement: Read the Whole Story
- ACOS: Efficiency of ad sales.
- TACOS: Are ads growing the business, not just ad-attributed revenue?
- CTR & CPC: Are creatives and bids competitive?
- CVR: Listing quality, price, reviews, and Buy Box.
- New-to-Brand (where available): Are you expanding reach?
Pro tip: Track Contribution Margin After Ads per ASIN. If contribution margin improves while TACOS stabilizes or drops, you’re scaling smart.
9) Advanced Levers (When the Foundation Is Solid)
- Dayparting (bidding schedules): If evenings convert better, bias bids/budgets accordingly.
- Search Query Performance (SQP): Find queries with high impressions but low click/purchase share → content & bid focus.
- Retail Readiness Gating: Only scale ads on SKUs with stock, Buy Box control, competitive price, and ≥3.8★.
- Sponsored Display Audiences: Retarget product viewers and similar audiences; tailor creatives by funnel stage.
- Store Spotlight + Posts: Funnel traffic into curated Store pages; measure halo sales.
10) 30/60/90-Day Action Plan
Days 1–30 (Foundation & Launch):
- Build the 3-layer structure.
- Launch Auto, Broad/Phrase, Category/Product targeting.
- Start SB headline + SBV for 3–5 hero terms.
- Weekly harvesting + negatives.
- Expect ACOS volatility; watch TACOS and CTR/CVR trends.
Days 31–60 (Scale & Stabilize):
- Expand Exact on winners, increase budgets there.
- Add SBV variants; test creative hooks.
- Introduce Sponsored Display retargeting + defensive.
- Tighten bids to contribution margin goals; implement placement modifiers.
Days 61–90 (Sustain & Profit):
- Consolidate to high-performing Exact/ASIN sets.
- Maintain defense; upsell bundles/multipacks.
- Refresh creatives monthly; schedule price/offer tests.
- TACOS should trend steady or down with stable rank and margin.
Conclusion: Process Beats Hacks
Sustainable Amazon growth isn’t about “tricks.” It’s about a repeatable process: discover, harvest, and monetize—while measuring real business impact (TACOS and contribution margin). If you set smart guardrails, refresh creatives, and run a disciplined weekly optimization routine, you can grow faster and keep ACOS under control.
Copy/Paste SOP:
- Build 3 layers (Prospect → Harvest → Profit)
- Harvest winners weekly; add negatives
- Bid to contribution margin; adjust placements
- Refresh creatives to lift CTR and lower CPC
- Track TACOS + margin, not ACOS alone
