There are two budgeting methods for Amazon’s Sponsored ads. One is the daily budget, which is applicable to product promotion ads (SP), brand promotion ads (SB), and display promotion ads (SD); the other is the lifetime budget, which is only applicable to SB. Let’s discuss the daily budget of the advertising campaign.
1. Amazon’s regulations on daily budget
The daily budget is the maximum advertising fee that the seller is willing to pay for a day’s advertising campaign. If the daily budget is exhausted before midnight, the search engine will stop searching and matching the advertising campaign, objectively causing the advertising campaign to be suspended (although the advertising campaign is still in the status “enabled”).
The daily budget is restored to full value in the early morning of local time and normal operation begins for the day.
Since the daily budget is not necessarily used up every day, the remaining budget will be retained on other days of the month, which will result in some days exceeding 25% of the budget.
2. The impact of daily budget on advertising
Since each seller’s daily budget is restored to full value in the early morning of the website time, it is easy to have a CPC peak in the early morning. This phenomenon fully illustrates the impact of the daily budget on advertising bidding!
Studies have shown that different budgets will lead to different preferences for Amazon search engines for advertising. It includes bidding level, advertising campaign budget, average budget per object, and average budget per product.
3. The impact of daily budget on operations
In reality, the advertising costs of many sellers have long accounted for less than half of the advertising budget, and some are even only 10%. Is this economical or wasteful? Before answering this question, let’s take a look at the business significance of the advertising budget.
For operations, the advertising budget reflects a series of business requirements: daily exposure requirements, advertising order requirements, advertising sales requirements… If the daily budget cannot be spent at all, how to meet business requirements?
Sellers may say that if I have a high budget, I can’t spend them all. These business indicators have been achieved. However, it is easy to give operations the illusion that the budget can’t be spent anyway, so he won’t care about inefficient keywords, and it is easy to ignore the management of invalid search terms. The proportion of invalid costs is likely to be high, but the percentage of cost/budget is low, and operations are still blindly increasing costs. Such ads will have an increase in ACOS, and more and more objects will be inefficient.