Amazon Ads: How to boost efficiency and reduce wasted spend

In the world of Amazon advertising, every dollar counts.

The right strategies can turn your ad spend into a powerful engine that fuels growth, drives sales and amplifies your brand visibility.

Even so, without careful planning and constant optimization, a hard-earned budget can easily slip away on ineffective campaigns, irrelevant clicks and poorly targeted ads. 

This guide will equip you with actionable insights on limiting wasted ad spend and maximizing ROI, ensuring every cent invested in Amazon Ads works harder for your business.

Zero in on targeting: Optimizing for precision

Refine your audience targeting

One of the fastest ways to waste ad spend is by casting too wide a net. Amazon offers helpful tools to narrow your audience, but they’re only successful if used correctly. 

Start by digging into Amazon’s audience insights, which offer valuable data on shopper behavior, purchase history and demographics. 

Use this data to build and refine detailed buyer personas representing your ideal customers. The more precise your personas are, the better you can target your ads to those most likely to convert.

Consider segmenting your audiences based on factors like:

• Purchase frequency.
• Average order value (AOV).
• Seasonal behaviors. 

For example, if you’re selling outdoor gear, you might create separate campaigns targeting summer hikers versus winter sports enthusiasts. 

This approach guarantees your ads resonate more with specific audiences, reducing wasted impressions and clicks.

Master keyword strategy: Quality over quantity

Target high-intent keywords

When it comes to mastering keyword strategy on Amazon, it’s not just about driving traffic – it’s about driving the right traffic. 

High-intent keywords indicate that a shopper is ready to make a purchase. These include keywords like: 

• “Buy.” 
• “Best.” 
• “Deal.” 
• “Discount.” 

Focusing on these terms guarantees that your ads are shown to shoppers further down the funnel and more likely to convert.

To identify high-intent keywords, go to your existing search reports and identify keywords with high conversion rates and low ACoS (advertising cost of sales). These are your money-makers.

Use Amazon’s keyword research tools (i.e., the Keyword Planner) or third-party tools (e.g., Helium 10 or Jungle Scout) to find new keywords with similar intent.

Another main component of a quality keyword strategy is long-tail keywords.

Long-tail keywords are longer and normally more specific, with lower search volumes. However, because they can capture very particular search intentions, they often return higher conversion rates than generic keywords.

Instead of targeting a broad term like “running shoes,” consider a long-tail variant like “men’s lightweight running shoes for marathon.” The specificity reduces competition and increases the likelihood of conversion.

Dig deeper: Optimizing for Amazon branded search: Best practices to boost visibility

Implement negative keywords aggressively

Negative keywords are your shield against wasted ad spend. They stop your ad from appearing in irrelevant searches, ensuring you don’t flush your budget with clicks from customers who aren’t interested. 

For example, if you’re selling premium running shoes, you might want to add “cheap” or “budget” as negative keywords to avoid clicks from shoppers looking for low-cost options.

The process of identifying negative keywords should be ongoing. Start by regularly reviewing your search term reports to spot terms that trigger your ads but don’t convert. These are prime candidates for your negative keyword list. 

Tools like Sellics or ZonGuru can help automate the identification of negative keywords, saving you time while optimizing your campaigns.

Another tactic is focusing more on phrase match and exact match types rather than broad match. 

• Broad match can be too vague, leading to irrelevant impressions and clicks. 
• While phrase and exact matches require more precise targeting, they give you more control over when and where your ads appear.

By concentrating on high-intent keywords and effectively using negative keywords, you’ll make your campaigns more targeted and efficient. 

This reduces wasted ad spend and boosts your Amazon advertising efforts’ overall effectiveness and profitability.

Optimize campaign structure: Simplify and segment

Segment campaigns for control

Running a well-structured campaign will allow you to minimize waste in ad spend and maximize control over your advertising efforts. 

Essentially, that means finding ways to segment your campaigns so that you can track performance very closely and make precise edits. 

Rather than lumping all your products into one campaign, consider organizing your campaigns by product type, match type or specific goals.

For example, if you sell a variety of kitchen appliances, you might craft separate campaigns for blenders, coffee makers and toasters. 

This approach tailors your keyword strategies, bids and budgets to each product category, ensuring that you don’t overspend on one product type at the expense of another. 

By segmenting your campaigns, you can more easily identify which products are performing well and which need further optimization.

Another important strategy is to separate branded and non-branded keywords into different campaigns. Branded keywords typically convert more because they target shoppers who already know your brand. 

By isolating these keywords, you can allocate a higher budget to them while managing non-branded keywords more conservatively. This segmentation also provides clearer insights into how well your brand performs independently versus competitors.

Granular bid adjustments

You can further optimize your campaigns through granular bid adjustments once they are segmented. 

Amazon allows you to adjust bids based on various factors, such as:

• Placement (top of search vs. rest of search).
• Device type (desktop vs. mobile).
• Time of day. 

These bid adjustments are critical in ensuring that your ads appear within the most profitable contexts.

For example, if your ads perform exceptionally well on mobile devices, you can increase the bids on mobile placements to capture more of that traffic. 

Conversely, if your ads tend to perform poorly in the evening, you might lower your bids during those hours to avoid wasting budget on low-performing times.

Dynamic bidding is another powerful tool at your disposal. With dynamic bidding, Amazon automatically adjusts your bids based on the likelihood of a conversion. 

There are three options: 

• Dynamic bids – down only.
• Dynamic bids – both up and down.
• Fixed bids. 

While dynamic bids – up and down can help you capture high-converting traffic, it’s important to use this feature cautiously, as it can also increase costs if not closely monitored. 

Fixed bids offer more control and can be preferable in campaigns with a strict budget.

Avoid budget dilution

One of the most common mistakes with Amazon Advertising is spreading a budget too thin across several ad groups or keywords. This leads to suboptimal results, as no campaigns receive the focus and resources needed to excel. 

To avoid this, regularly review your campaign performance and consider pausing or consolidating underperforming ad groups.

For instance, if you have multiple ad groups targeting similar keywords and overlapping audiences, it may be best to combine them into a single, more focused ad group. 

This allows you to concentrate your budget on the highest-performing keywords and ad creatives, reducing waste and improving efficiency in the overall campaign.

By structuring your campaigns thoughtfully and making granular bid adjustments, you gain greater control over your Amazon advertising efforts. 

This ensures your budget is allocated effectively, reducing wasted spend and promising better results.

Dig deeper: 6 Amazon marketing strategies to implement

Continuous optimization: Adapt or waste

Daily and weekly performance audits

Amazon Ads isn’t a “set it and forget it” platform. Continuous optimization, starting with regular performance audits, is key to minimizing wasted ad spend. 

At a minimum, you should check key metrics like ACoS, CPC (cost per click) and CTR (click-through rate) daily to verify that your campaigns are on track.

Daily audits help you catch and address issues before they become costly. For instance:

• If you notice a sudden spike in CPC for a particular keyword, it could indicate increased competition. You might choose to lower your bids to maintain profitability or shift the budget to higher-performing keywords. 
• Similarly, a drop in CTR might signal that your ad copy or creative needs refinement or that your targeting is off.

Weekly audits provide a deeper dive into campaign performance. This is the time to:

• Review overall trends.
• Assess the effectiveness of your bid adjustments.
• Evaluate the impact of any changes you’ve made during the week. 

Pay special attention to the performance of new keywords and ad groups, as these are where optimization can have the most impact.

Setting up alerts and automated rules within Amazon’s campaign manager can also help you respond swiftly to performance changes. 

You can set up a rule to automatically increase bids on high-performing keywords or pause ads that fall below a certain CTR threshold. These tools help you maintain control while reducing the manual effort required for optimization.

Iterative changes vs. major overhauls

Optimization is often about making small, iterative changes rather than sweeping overhauls. 

By making gradual adjustments, you can fine-tune your campaigns without risking significant disruptions to your performance. 

Rather than completely rewriting your ad copy, you might start by tweaking the headline or CTA. Monitor the impact of these changes over time and continue revising based on the data.

However, there are times when a major overhaul is necessary, particularly if a campaign is underperforming overall. 

In such cases, you might need to reevaluate your entire approach, from targeting and bidding strategies to ad copy and creative. 

While these overhauls can be time-consuming, they are sometimes the best way to address fundamental issues driving wasted ad spend.

By regularly optimizing through audits, A/B tests and iterative improvements, you ensure your Amazon advertising campaigns stay efficient and effective.

This proactive approach reduces wasted spend and positions your campaigns for success in the long term.

Scale with efficiency: Expanding smartly

Identifying scalable opportunities

Scaling your Amazon advertising campaigns can be a powerful way to increase revenue, but you must be efficient to avoid unnecessary costs. 

The first step is to identify which of your current campaigns are most suitable for scaling. Look for campaigns with:

• Consistently low ACoS.
• High conversion rates.
• A strong return on ad spend (ROAS). 

These campaigns are your best candidates for expansion because they’re already performing well, meaning you can confidently allocate more budget to them with minimal risk.

When scaling, start by increasing your budget incrementally. For example, if your campaign consistently delivers a 20% ACoS, you might start increasing the daily budget by 10-20% and monitor the results closely. 

This approach allows you to scale up without overwhelming your budget or sacrificing performance. It’s also important to keep an eye on your inventory levels. 

Scaling a successful campaign can lead to rapid sales increases, and the last thing you want is to run out of stock and waste ad spend.

In addition to budget increases, consider scaling through new ad formats or placements. Sponsored Brands and Sponsored Display ads offer additional visibility and can complement your existing Sponsored Products campaigns. 

If you’re already seeing success with product ads, consider expanding into these formats to reach a broader audience and reinforce your brand presence.

Dig deeper: 5 reasons Amazon Ads is better than Google Ads for ecommerce

Maintain performance as you grow

As you scale your campaigns, it’s crucial to maintain the efficiency and performance that made them successful in the first place. 

One common challenge is that as you increase budget and expand targeting, your CPCs may rise and your conversion rates might drop due to increased competition or less precise targeting. 

To counteract this, continue to apply the optimization strategies discussed earlier, such as refining your keyword strategy, adjusting bids and regularly reviewing performance metrics.

Scaling doesn’t mean setting your campaigns on autopilot. Even as you grow:

• Maintain a rigorous schedule of performance audits to ensure that your campaigns are still delivering strong results. 
• Keep an eye on key metrics like ACoS, CTR and conversion rates and be ready to make changes as needed to sustain profitability.

Another way to maintain performance while scaling is to reinvest in high-performing areas. 

For instance, if a particular product or keyword drives exceptional results, consider creating additional ad variations to capitalize on that success. You can also reinvest in top-performing audiences by refining your targeting or increasing bids for those segments.

Finally, don’t be afraid to pause or scale back campaigns that aren’t delivering. As you expand, some experiments will inevitably fail and it’s important to recognize when to cut your losses. 

By reallocating resources from underperforming areas to more successful ones, you can maintain overall campaign efficiency and continue to drive growth without wasting ad spend.

Keep an eye on rising CPCs and competition

As you scale, you may face increased competition, leading to higher CPCs. Monitor these changes closely, as rising costs can erode the profitability of a scaled campaign. 

One way to combat this is by refining your targeting to prioritize high-intent keywords and audiences that are more likely to convert. Additionally, consider testing lower-cost placements or ad formats that may offer a better ROI.

If competition in your niche becomes too intense, it might be time to explore less competitive niches or long-tail keywords. Continuously analyze your competitors’ strategies and adjust your bids and budgets to ensure you’re not overspending in highly competitive areas.

By identifying scalable opportunities, testing new markets or product lines and maintaining a vigilant approach to performance as you grow, you can scale your Amazon advertising campaigns efficiently and successfully.

Maximizing impact and minimizing waste in Amazon Ads

A proactive approach to reducing ad spend waste in Amazon Ads requires:

• Refined targeting.
• Mastery of keyword strategies.
• Optimized campaign structures.
• Continuous performance improvement.
• Intelligent automation.
• Efficient scaling. 

By applying these strategies, you can keep your ad spend focused on driving profitable growth. These actionable tips will enhance your Amazon Ads, reduce wasted spend and ultimately improve your ROI.