Sep 19, 2023 12:00AM
Timing is Key: Smart Amazon Budgeting. Seasonal trends matter. Key metrics like TACOS and CVR can guide you. Thanks, Adam.
Seasonal Demand + Understanding WHEN to Scale Budgets
Every brand selling on Amazon has yearly high periods and low periods. From an advertising approach, how do we know when to push budgets without exhausting ACOS/TACOS and ultimately lowering efficiency? The answer, of course, is taking a situational approach.
In this example, this brand's "low period," like many, is through the summer months. Around late August/early September, we started seeing a change in customer activity & ultimately performance changes in the account:
1️⃣ Trending top keyword SV continues to grow WoW
2️⃣ Day-to-day / Week-to-week CVR improvement
3️⃣ Shrinking WoW percentage of ad sales relative to total sales
4️⃣ Increased amount of campaigns running out of budget
Let's take a look at performance over this timeframe:
Aug week 3: $138.4k ad sales / $245.6k total sales / 12% TACOS / 8.3% CVR
Aug week 4: $204.4k ad sales / $304.4k total sales / 13.7% TACOS / 8% CVR
Sep week 1: $413.1k ad sales / $589.8k total sales / 12.3% TACOS / 9.1% CVR
Sep week 2: $413.2k ad sales / $623k total sales / 12% TACOS / 8.9% CVR
This breakdown answers a few questions for us:
▶ Product demand is increasing every week - CVR% improving as we incrementally increase budgets
▶ TACOS continuing to decrease as spend pace / budgets increase (This also answers the ever-common question of "Does TACOS always increase if ad spend increases?)"
▶ As soon as we see 1-2 weeks of improving TACOS/CVR trends in mid-August, it's time to ramp up budgets (based on prior year trends as well)
Understanding historic data trends and customer demand timing can help you spend WHEN the time is right!