Budgets—the basics and best practice, for Sponsored Products
Everything you need to know about optimizing your budgets, with Sponsored Products
Here are the themes we’ll cover in this guide
Chapter 3
Chapter 4
Chapter 5
Chapter 6
Budgets basics for Sponsored Products
What are budgets, and why are they important?
An introduction to budgets, for Sponsored Products
When you create a new Sponsored Products ad campaign, the budget you set is one of the most important things to consider.
Firstly, it is important the budget you set is sustainable for your business. Secondly, your allocated budget should align with helping you achieve your advertising goals.
With a strong strategy, and the help of our many features and recommendations, your budget can help you on the path to a successful advertising strategy that helps you gets the results you want.
Daily budget for Sponsored Products campaigns
How it works and why it matters
What is a daily budget?
Definition: ‘daily budget’
The amount you are willing to spend on a Sponsored Products campaign, each day.
When setting up a Sponsored Products campaign, you can set up a daily budget. This is the maximum amount you will spend on running your ad campaign. Setting a daily budget can help give you more control over your spend, and allows you to more easily manage your costs.
Remember.
Your daily budget is averaged over the course of a calendar month. That means you could spend less than, or up to 25% more, than your average daily budget, on any given day. This flexibility allows you to benefit from high traffic days, but still means you won’t spend more than wanted to. For example, if your daily budget is $10, then your actual spend on a day could be $12.50 (25% higher), but overall your monthly spend would equal out to $300. Remember, you can change your daily budget at any time
Top 3 tips
- Pick an appropriate budget - to get started, choose a budget that’s high enough to help keep your ads going throughout the day. For many advertisers, we recommend a minimum of $10 (or the equivalent for the country in which you are selling) per campaign, but you should always choose a budget that you’re able to pay.
- Utilize the Budgets page (beta) - let your campaigns run, and after a period of time, you’ll see recommended budgets on the Budgets page. These recommendations allow you to optimize your budgets based on how your campaign is performing
- Review your budgets - at least once every two weeks, check in on how well your current budget is serving your campaigns. This gives you an opportunity to modify it if needed
— Gordie Murphy, Fishoholic, US advertiser[Advertise] within your own budget. You’ve got to budget with what makes sense. We still do that. Our numbers are significant to our business and how we're growing.
Out of budget
What to do when your campaigns run out of budget
Why you go out of budget, and what to do
‘Out of budget’ definition:
when a campaign you are running has used up the allocated daily budget because your ads have been served to relevant shoppers
Daily budgets are spent as quickly as possible, because all available impressions for your ads to show to relevant shoppers are taken. This means that a smaller budget could be spent in a few minutes if there are a large number of shoppers engaging in your advertised products on Amazon. Once a campaign is out of budget, your ads won’t be eligible to show until the next day, at midnight, when the daily budget resets.
Proofpoint
Advertisers who ran out of budget* during 2020 missed 2.1x additional sales on average, compared to advertisers who didn’t run out of budget.**
*Advertisers are considered as having run out of budget if, during 2020, their Sponsored Products campaign ran out of budget at least 50% of the time. Amazon internal data, WW, 2020.
**Advertisers are considered as having not run out of budget if, during 2020, their Sponsored Products campaign were in budget at least 50% of the time. Amazon internal data, WW, 2020.
Remember.
When your campaign runs out of budget, here’s what to do.
- Running out of budget too soon? Try to increase its budget, or reallocate some from other campaigns that are not using up their budget. For many campaigns, we provide recommended budgets on the budgets page (beta), which can be a great reference.
- Running out of budget during certain time periods? If you campaign seems to always run out of budget at the same point, such as during the weekend, try to apply budget rules, setting your budget to increase during a specific time period. This can help to reduce your chance of running out of budget when you need it most.
Top 3 tips
- Check your notifications - visit campaign manager for out of budget notifications. For CN sellers, connect to WeChat to receive WeChat out-of-budget notifications
- Use the budgets features – make sure to visit the budgets page (beta) and utilize budget rules, to optimize your budgets and help you stay in budget for longer
- Try increasing your budget - if you run out of budget, consider increasing it. This will help your campaign run for longer, meaning your brand is visible to shoppers during more of the day
Optimizing your budget
How to make the most of your budget, in any scenario
How to optimize your campaign
It’s a good idea to regularly check in on your budgets, and see how they are performing. Here are some of the scenarios you may encounter with your budget, and ways to optimize your campaigns if you spot them.
Scenario 1: I’ve spent all my budget, but I’m seeing conversions
Action: Great news. Now, try the following:
- As your campaign is performing well for you, try increasing the budget to help drive even more sales
- Consider reallocating budget from low-performing or non-spending campaigns, to this campaign. This can help make sure you’re investing your money in campaigns that drive sales
- Try performance-based budget rules, to continue driving sales for your high-performing campaigns
Scenario 2: I’ve spent all my budget, but I’m not seeing conversions
Action: If you’re not seeing return on your ad spend, try the following
- Optimize your campaign bidding, targeting and product detail page
- Periodically, check to see if the performance has improved
- If it doesn’t work, try reducing your budget on this campaign, and reallocating it to a high-performing campaign
Scenario 3: I’m not spending all my budget, but I’m seeing conversions
Action: This is a good place to be, so try the following:
- Maintain your budget as it is, as it’s not running out. However, keen an eye on it to check if it starts to run out of budget. If it does, consider increasing the budget
Scenario 4: I’m not spending all my budget, and I’m not seeing conversions
If you’re seeing little to no conversions, and you’re not spending much of your budget, try the following:
Action:
- Optimize your campaign bidding, targeting and product detail page
- Periodically, check to see if the performance has improved
- If that doesn’t work, try reducing your budget on this campaign, and reallocating it to a high-performing campaign
Top tip
Review and optimize your campaign bidding, targeting and product, and if you do not see any improvement, then consider reducing your budget and reallocating it to a high-performing campaign
Budgets page (beta)
Utilize this feature for campaign insights and recommendations
How to use budgets page (beta)
What is budgets page (beta)?
Budgets page (beta) is a page within campaign manager that displays performance metrics about your launched campaigns. These insights can help you update and improve your campaigns, by showing you the potential of your campaigns when they are in budget, as well as opportunities to optimize them and specific recommendations for how to do this.
The metrics available on Budgets page (beta) are:
- Average time in budget
- Estimated missed sales *
- Estimated missed impressions
- Estimated missed clicks
- Recommended budget **
3 reasons to visit your budgets page:
- When a campaign has run out of budget and you want to analyze the impact this has had to your campaign’s performance, over a specific period of time
- To identify the potential of your campaigns if they were to stay in budget, instead of going out of budget. The Budgets page (beta) will provide recommended budgets to help minimize your campaign's chance of running out of budget and missing out on impressions, clicks, and sales
- To analyze the campaigns which frequently go out of budget, yet perform well when they are in budget. We recommend downloading the data for this campaign in a report format, and reviewing these results beyond the 90 day range
Top tips
- Check budgets page – you should try to do this at least every 2 weeks to stay up to speed with your campaign performance.
- Apply the recommendations – we share these budget recommendations based on your previous campaign performance, but be mindful about your budget capabilities before applying these recommendations
- Explore your report – these downloadable budget reports provide an in-depth insight into your campaign performance over time, and can be really useful in helping to optimize your campaigns
* Based on similar campaigns (with similar products and targeting) in the same marketplace which did not go out of budget, we used machine-learning to estimate missed clicks. Then using the historical CTR and historical sales together with the estimated missed clicks, we can also calculate the estimated missed sales and missed impressions. Like any predictive model, these metrics are estimated for reference only and are not guaranteed.
** Same as missed opportunities, the recommended budget is also based on the machine-learning model’s estimated missed clicks. We also estimate the CPC based on your campaign’s historical CPCs and taking into account other factors including seasonality. Then, we calculate the recommended budget as estimated missed clicks * estimated CPC. Adopting the recommended budget might help advertisers to avoid missing these opportunities.
Budget rules
Make the most of shopping events with this feature
How to use budget rules
What is budget rules?
Budget rules is a functionality that allows you to set rules for your campaign budget. When applied, budget rules will automatically increase the daily budget of your campaigns for key shopping events, and adjust your budget accordingly based on a campaign’s performance.
The benefit of this automatic optimization is that it helps your campaigns stay in-budget for longer, helping to increase your chance of impressions, clicks and sales. Budget rules also reduces manual effort when optimizing your campaign’s budgets, by automatically adjusting, maintaining and optimizing budgets during high-traffic days.
There are two types of budget rules you can choose from:
- Schedule-based budget rules will increase your campaign budget by the percentage you specify, during the date range you set. This can be helpful during key shopping events, such as Prime Day or the holidays, or in anticipation of higher traffic.
- Performance-based budget rules automatically notices when your campaign is performing well. It helps your campaign continue to drive results by increasing its budget when your campaign meets a specific performance threshold, such as click-through rate (CTR) or conversion rate (CVR).
3 reasons to use budget rules
- Advertisers can use schedule-based rules to increase their budget during a specific period, to help boost their performance. This can help advertisers who have identified the potential for a high-traffic opportunity, increase their chance of getting impressions, clicks and sales, during a custom period.
- For example, an advertiser could set their budget to increase by 20% from November 1 to November 30, or on every Saturday.
- Advertisers can use schedule-based rules to increase their budget for special events, such as Prime Day and the holidays, ahead of time, to help reduce missed sales opportunities and stay in budget for longer.
- For example, advertisers could set a rule to increase their budget by 100% on Black Friday.
- Advertisers can use performance-based rules to increase their budget for high-performing campaigns, to continue to drive sales.
- For example, if a ROAS of 5 is a strong result for an advertiser, they could set a campaign to automatically increase its budget by 20% when the ROAS hits 5.
Here are some scenarios you may find yourself in, and what to do.
Scenario 1: My campaign goes out of budget, daily
Action: Increase your daily budget, or apply a budget rule that recurs daily
Scenario 2: My campaign goes out of budget only on weekends
Action: Apply a schedule-based budget rule that increases your budget only on a weekend; 20% is a good starting point
Scenario 3: There’s a key shopping event coming
Action: Apply a schedule-based rule to run during that specific time period. And remember, Amazon will provide you with recommendations for key shopping events
Scenario 4: I want my budget to allow my campaigns to run, as long as the performance is above my criteria
Action: Apply a performance-based rule set to increase your budget when your campaign performance hits your specified criteria
Thank you for reading
Budgets—the basics and best practice, for Sponsored Products