Are Rule-Based Amazon PPC Automations Costing You Money? Here’s Why (and What to Do Instead)

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You’re using rule-based automations in your Amazon PPC, thinking you’re saving time and optimizing your campaigns. But your ACOS is still high, your sales are inconsistent, and you’re starting to wonder if all those rules are actually helping.

Most Amazon sellers don’t realize that these seemingly helpful automations can actually be costing them money. The reality is, these “set it and forget it” systems often lead to wasted ad spend and missed opportunities.

In this article, we’ll break down the three main reasons why rule-based automations fall short, and we’ll show you a better approach to managing your Amazon PPC. Let’s dive in.

The 3 Big Problems with Rule-Based PPC Automations

Rule-based automations are becoming increasingly popular for Amazon PPC. But just because they offer more control than AI-driven solutions doesn’t mean they’re the best choice. Here are three key limitations:

1. Fixed Look-Back Windows Ignore Real-Time Performance

Most rule-based optimization tools force you to pick a fixed look-back window (e.g., last 30 days, last 14 days). This means your bid adjustments are always based on old data, even if recent performance tells a different story.

• The problem: Amazon PPC is dynamic. What worked last month might not work today. Conversion rates fluctuate, competitors come and go, and search demand shifts constantly.
• Real Example: Imagine you sell Valentine’s Day gifts. February is a huge month for sales, but then demand drops off a cliff in March. A 30-day look-back window would keep increasing bids even as sales plummet.
• Here’s why that matters: You need to be able to react quickly to changes in performance. A fixed look-back window prevents you from doing that, leading to wasted ad spend.
• AdLabs Approach: With AdLabs, you can adjust your look-back window on the fly, giving you the flexibility to respond to real-time performance changes.

2. Always Optimizing Everything Muddies the Waters

Many sellers set up rules that apply to their entire Amazon PPC account, constantly making small adjustments across all campaigns. While this might seem like a good idea in theory, it can actually make it harder to track performance and hit your goals.

• The problem: When you’re constantly tweaking every bid, it becomes nearly impossible to pinpoint which changes are driving results. This makes it difficult to optimize effectively.
• Real Example: Imagine you have 100,000 keywords and you’re increasing bids by 5% on all of them daily. Those small increases add up fast, potentially doubling your bids in just a few weeks.
• Here’s what’s happening: You’re essentially overcorrecting, causing your ACOS and sales to whipsaw back and forth. One AdLabs client who had experienced this before, said their previous agency always had them in a state of “ACoS is through the roof, and then sales are to the floor.”
• Here’s how to fix it: Focus on optimizing the top 10-20% of your account that’s underperforming. This will have a much larger impact on your overall results. Plus, focus on one main goal each week, like increasing traffic or improving profitability.
• AdLabs Solution: AdLabs lets you target specific campaigns and ad groups, allowing you to make more focused and impactful optimizations.

3. Limited Actions: The Downfall of Increase/Decrease by X%

Most rule-based automation platforms limit you to a few basic actions, like increasing or decreasing bids by a fixed percentage or pausing keywords. This “one-size-fits-all” approach simply doesn’t work in the complex world of Amazon PPC.

• The problem: Increasing or decreasing bids by a fixed percentage ignores the underlying factors that drive performance, such as average order value, conversion rate, and placement performance.
• Real Example: Let’s say you have a high-ACOS keyword. A typical rule-based system would tell you to decrease the bid by 50%. But what if your bid is already at $0.02? Further reductions will kill traffic and won’t solve the underlying problem.
• Here’s what you need to know: Often, a high ACOS doesn’t mean the bid needs to be decreased. The bid might need to be increased. One AdLabs user had a high ACOS keyword, and the system suggested increasing the bid.
• The numbers: The historical CPC was $1, resulting in a high ACOS. To reach the 30% target ACOS, the maximum affordable CPC was $0.30. The keyword’s bid was just $0.02. The rule based automation had driven the bid too low.
• Here’s how to fix it: Use a formulaic approach to calculate the optimal bid based on your target ACOS, average order value, and conversion rate. This ensures you’re always bidding the right amount, regardless of past performance.

Why Increase/Decrease by X% Doesn’t Work (Real Examples)

The “increase/decrease by X%” method is the prevailing method for managing Amazon PPC. Some may say 99% of PPC managers are optimizing their accounts this way, even if using AI. Here are some examples of why this doesn’t work:

High ACOS Keyword Example

Let’s say you’re targeting a 50% target ACOS, and a keyword has a 100% ACOS over the last 30 days.

• The (flawed) logic: Reduce the bid by 50%.
• The problem: This assumes the CPC is directly tied to the bid. If the bid was already reduced to $0.02, or if the CPC was lower than the bid, this won’t work.
• Even worse: The automation might further reduce the bid to $0.01 the next week. You’re likely stepping yourself out of auctions completely.

Campaign Placement Adjustment Example

Tools may apply this faulty logic to placement adjustments. But placement adjustments don’t have bids, keywords do.

• The flaw: Increasing all three placement bids by 25% is the same as increasing all the bids by 25%.
• What you need: Relativity between the three placements, setting the worst performer to 0%. Other placements should be increased based on how much better they perform.

Where Rule-Based Automations Can Be Helpful

While rule-based automations have limitations, they can be helpful in certain areas of your account:

• Harvesting
• Negations
• Budgets

However, you should always review and approve these changes before they’re implemented. Think of the automations as a way to generate recommendations, not as a replacement for human oversight.

• Real World: Automation really just does a lot of the legwork for you. You still want to be the mind that’s actually pushing through those changes and making the adjustments with the context that the automation can’t necessarily take into account.

AdLabs: The Smarter Way to Manage Amazon PPC

Tired of wasting time and money on rule-based automations that don’t deliver results? AdLabs offers a smarter, more effective approach to Amazon PPC management.

• Formulaic Bidding: AdLabs uses sophisticated algorithms to calculate the optimal bid for each keyword based on your target ACOS, conversion rate, and other key metrics.
• Dynamic Look-Back Windows: Adjust your look-back window on the fly to respond to real-time performance changes.
• Targeted Optimization: Focus on the campaigns and ad groups that need the most attention, rather than making sweeping changes across your entire account.
• Full Control: You always have complete control over your campaigns and can override AdLabs’ recommendations at any time.

Ready to take your Amazon PPC to the next level?

Conclusion

Rule-based automations can seem like a convenient way to manage your Amazon PPC, but they often lead to wasted ad spend and inconsistent results. By understanding the limitations of these systems and adopting a more strategic approach, you can unlock the true potential of your Amazon advertising.

This article is based on Episode 92 of That Amazon Ads Podcast. Subscribe for weekly Amazon PPC strategies.