What is the basis for planning the advertising budget for the Red Sea category? The unit price of the product is US$25.99, and the profit margin is 40% (excluding advertising fees). How to establish an advertising budget promotion idea?

I'm an inexperienced newbie who's trying to change my career, and I'm a little confused about how to set up the advertising budget. I'm hoping you guys can give me some guidance, I'd be very grateful.

Question 1:

What is the appropriate advertising budget? How to establish advertising budget promotion ideas?

Personal care products, unit price is $25.99, profit margin is 40% (excluding advertising fees), conversion rate is 10%, and we hope to get at least 2 orders per day. Keyword traffic is concentrated on 2-3 big words and brand words

Category: Top Monthly sales: 900 orders, 100th: 50 orders

The category should be considered a relatively red ocean category. The sellers ranked behind basically rely on natural traffic, so we hope that we will develop in this direction in the future. This category is required by the company, so we have to enter the red ocean. In this case, how should the budget be set? What conditions are the budget generally planned based on?

 
The following is a screenshot of the automatic advertising suggested bid in the Amazon backend

 
Manual big word suggestion bidding

  
 
4.20 Update
Thank you for your careful answers. I have reorganized my previous advertising structure based on your ideas, but there may still be many problems. Welcome to continue to answer and correct me.

Week 1 (2 orders per day)
1. Become a VINE reviewer plan 30
2. Make seed links, get comments and merge them (I don’t understand this yet, I need to learn it)
3. Set up prime discounts and coupons. All products in this category have prime discounts, but fewer have coupons.
3. The bidding price for big keywords is high. In the early stage, do tight automatic advertising, and set three groups of low, medium and high bidding. Do not reject keywords, test link click exposure, and then reject keywords and make adjustments after 7-14 days (daily budget 30, 10 US dollars per group). It's a loss, it's the boss's money.

Week 2 (Sunday 2 orders)
1. Manually place low-bid ASIN targeting ads to target weaker competitors (ASIN targeting 5-10 USD)
2. Automatic advertising targeted optimization, accurate or not

Question: In the second week, I will be given 10 USD for each ad group with automatic + asin targeting, so the daily ad budget will be 40 USD. However, the target profit of 2 orders per day is only 20 USD. With a daily loss of 20 USD, my boss won’t fire me, right?

Week 3 (3 orders per day)
1. Perform manual precision based on the automatic advertising test and the collected precise long-tail words, and negate irrelevant words in advance
2. Keep the automatic advertising groups with better results according to the actual situation and readjust the budget

Three-month target: Break-even profit

I saw some friends suggested to do big keyword broad, I thought not to do it for the time being, and then consider it after seeing the situation of these ad groups, because the bids for big keywords are quite high, and I am worried that I can’t control the acos

"Wonderful Reply"

Anonymous user

Agree with: Young people should not work, Bobo Milk Tea

Since it is a relatively popular category, don’t consider big keywords for now. Don’t pay too much attention to ACOs during the new product period, but focus on conversions. As for advertising layout, here are a few suggestions for reference:

1. If it is automatic, it is recommended to only run the keywords and not the ASIN. If the new product runs the ASIN directly with a relatively high price, the conversion rate will definitely be low. Running the keywords can not only expand the traffic entrance, but also check the listing. Remember to check the keywords/phrases with low conversion rate, low relevance, and high competition.

2. If you use manual bidding, you can open a group of fixed long-tail keywords with high relevance (don’t rank too high, around 5-10w aba, the bidding for the top keywords is too high and it is not suitable for the new product period), the CPC bidding can be slightly higher, no bid, and the budget should be enough for at least 10 clicks a day. This is a layout based on long-tail keywords, and then find the keywords with high conversion and can hit the homepage through the advertising group.

3. Open two more groups of core words/secondary words with higher traffic (words with higher traffic than fixed long-tail search), one group with normal bidding, and one group with slightly lower bidding + bid, to distinguish which position the product is more suitable for (not all new products are not suitable for the homepage), monitor for 7/14 days and shut down the group with poor performance, which also lays the foundation for opening core word precision and large word broad later.

4. The overall idea is to first layout the long-tail words, with the selection of second-level words and advertising positions, to lay the foundation for the second-level words and first-level big words, and then do the same for the second-level words to be accurate and the big words to be extensive. As for the fixed investment categories and ASIN, they can be considered according to the subsequent product conversion. If the advertising conversion is good, it is equivalent to icing on the cake. The theme idea is like this, in short, it is done step by step.

Anonymous user

Agree with: Young people should not work

2 orders a day, 10% conversion, 2/10%=20, that is, at least 20 clicks are needed to get an order. The traffic words are concentrated on the big words. You can find out which are the core words of the category-related links and determine the core keywords to hit (it is not recommended to directly hit other people's brand words for new links. Customers who directly search for brand words recognize the brand, and the conversion effect may not be good).

First, check the keywords you want to type in the title. Check if there are any corresponding keywords in the five points. Check if the price of the link setting is advantageous compared with similar types. Use member discounts as appropriate. Use coupons if possible. Does the promoted link have a vine review? Have you prepared any seed links that can be merged?
 
How to set up ads:

The first group determines that the keywords are concentrated on 2 to 3 big words. You can directly put 2 to 3 big words together to start a big word precision group. It is recommended to bid for a budget of at least 20 clicks. Bid according to the actual situation. Give an approximate bid first. Dynamic bidding. If there is no exposure and click, increase the bid until the ad can run normally. Look at the ad order data for 7 days. Acos will definitely not look good in the first week. Order first, and then optimize to below Acos 40% after the number of orders increases. This group is the core order group
 
The second group of broad keywords has a slightly lower budget. It runs related keywords, denies irrelevant attributes of the product in advance, and denies the precision of the first group of keywords (this group can be left out if the budget is limited). The budget for running keywords is adjusted based on the order situation in a week.
 
The third group is automatic and close matching. This is to check whether the link has deviated. The order effect may not be good. Run it for a week to see the data.

The above is the basic framework of the advertisement. Run it for at least a week to check the data and make adjustments.

Aleo123

Agree with: Young people should not work

It is recommended that any product should have a monthly or weekly plan, and optimize and analyze specific indicators. I will simply provide my own ideas for reference!
 
1. First of all, what is the appropriate advertising budget?
a. When making a product, it is best to control the peak of the budget based on the gross profit. After confirming the first leg, return, cost and logistics expenses, the remaining 40% gross profit margin

b. Assuming that the company and the category generally have a relatively high budget ratio for new products in the early stage, about 20%, then the remaining 20% ​​of gross profit margin is controllable. Based on the budget ratio: 20%, the average order value: 25.99, determine the periodic BSR target and the corresponding order target (according to the category you mentioned: monthly sales of top: 900 orders, 100th: 50 orders, set weekly targets), for example, 10 orders in the first week. Then, the total budget for the first week is 25.99*10*20%=52 US dollars, and then the weekly analogy can be reversed.

2. After the total budget is determined, how to build a suitable advertising group?
a. Red ocean categories, with few and concentrated keywords, it is recommended that broad ads account for more than targeted ads (broad ads here refer to: auto/broad/phrase, etc.)

b. In the early stage, conversion rate and conversion volume are used as the core follow-up indicators to confirm that the conversion rate reaches the category average or even higher (for advertising, you can view the brand indicators in the advertising background, and for ASIN-level keywords, you can view the search term performance of the ASIN dimension in ABA)

c. Do not use big words for broad matching. In the red ocean category, if the product itself is not strong enough, it is difficult to achieve a good conversion effect. You can consider using a phrase or a broad match with a certain root word. Precision advertising can also be played in this direction. "Encircle the point and attack the reinforcement"

d. There must be a purpose for AUTO ads to enable four matching methods, whether it is for new products to be indexed by the Amazon system or to increase traffic. For the personal care category, there should be many similar competing products. It is recommended to enable the same category at a low CPC, and the association can be closed in the early stage; if the listing has run many highly relevant keywords, the broad ones can also be considered to be closed to reduce unnecessary budget expenditures.

Looking forward to the explosion of orders every day

Agree with: Young people should not work, wk984658261, ccdzd1, JamYaung, hdd1108 more »

1. Confirm product positioning and how many orders you want to achieve

2. Set strategies to achieve your goals, including pricing, products, advertising, off-site resources, etc.

3. Looking at the current price of 25.99, the customer order is in the upper middle range among similar products, but the style is innovative. New products can be automatically closely matched with similar products to see the quality and inclusion of listings.

4. Big words are not very friendly to new products that do not have many off-site resources. It is not recommended to be precise. You can try broad phrases for big words.
5. In the early stage, we basically focused on long-tail keywords

6. Determine the conversion rate of competing products and categories, and ensure that the conversion rate of the new product on the main promotion word is equal to or higher than the average

liulixian

Agree with: Young people should not work, wk984658261, JamYaung, Eat and drink

The bidding for big keywords is a bit high, so it’s better not to open it for now. Open automatic advertising, closely follow similar keywords, separate them into separate ad groups, and open only one of the same category. Wait for 3-7 days

It is recommended to open several groups, and then add different bids to different groups to see the exposure and click-through rate. Do not deny words in the early stage, and observe for 7-14 days.

Then try to place a set of low bids in other positions and product positions. The click-through rate does not need to be too high, as long as it can be clicked out. The bid does not need to be too high. Test CPC at around 0.25-0.4, and then control TACOS within 40% in the first three months.

Bikini Bottom Zhang San - Cherry blossoms only bloom for one season, true love only comes once, if you are just lonely, please don't say you love me

Agree with: Young people should not work, Little Tomato who works hard, Honghahah

In the early stage, make good links. Make good comments on vine and seed links. When the performance is not good, think about the reasons and make timely adjustments. If the advertising conversion is good, it is definitely best to keep it online. If the keywords of new products perform well, it is relatively easy to get on the homepage. The performance of advertisements at different exposure positions and time points is also different. It is related to competing products and buyers' shopping habits. You have to try and explore it slowly. ERP time-sharing price adjustment is very useful, but I don’t know the timetable rules in the advertising background. I haven’t used it much.

I feel like asking others about advertising budget and bidding is not helpful. If you simply increase the bid because the click-through rate is low or the budget is spent quickly, then it doesn’t matter who makes the product. Whether it can be promoted depends only on the product itself and the company’s resources. You need to make adjustments purposefully.

YSC666 - Post-90s

Agree with: Young people should not work, Mr. Robin

It is not recommended to start with big keywords in the early stage of a new product. First, do Vine to improve the link score, and then focus the budget on a few long-tail keywords under big keywords to slowly accumulate weight. Or just run automatic advertising to see if you can get some orders at a low price. The specific budget can only be obtained after 7 to 14 days of testing. That is, the CPC under a 10% conversion rate multiplied by 20 clicks is the budget that can achieve your minimum target requirement. However, from the description of the questioner, it seems that your company does not intend to vigorously promote this product, but is determined to enter the red ocean category. What kind of mentality is this? Can you explain it?

vanitas - I'm emo again

Agree with: Young people should not work

Two ways to play

1. Set a low bid to automatically test the potential of the product.

2. High budget, medium to high bid. Your category is too small, and running low bids alone may not be effective. In the case of little exposure and conversion of the product, it is recommended to run a link with a high budget. I suggest both automatic and precise. Even if the precise performance is poor, it can still show something. You can run the advertising bidding according to the suggestions, first look at the exposure, then the conversion, and don't be afraid of too much loss and dare not run the advertisement.

Some operators are afraid to launch ads, which is just a slow death. You don’t need to think too much about the early stage of advertising. Run it for a week and then analyze the data. It is better to choose a lower bidding mode.

Of course, this is all based on the assumption that your listing already has some reviews.

Cool Jason - cross-border e-commerce, from entering the industry to changing careers.

Agree with: Young people should not work

3 groups of automatic
Group 1: Suggested Bid
Group 2: Two-thirds of the recommendations
Group 3: Half of the recommendations
In the early stage, the big words and head brand words were automatically denied.
Run for 7-14 days and adjust based on the results.
 
Manually open the big words widely and select the big words in advance.
Run for 7-14 days and adjust based on the results.
 
Each ad group must be paid enough for at least 10 clicks, otherwise there will be no visible results.

Anonymous user

Agree with: Young people should not work

It is recommended that you do not need to turn on manual bidding before 10 orders are placed per day (it is not impossible to turn on manual bidding, but the effect will not be very good if the product is not in the first 2/3 of the homepage). I think it is okay to turn on automatic bidding first, and you can gradually increase the bidding to find the most suitable bidding price; if the price of new products is stable, it is not a problem to see 2 or 3 orders a day as you said. The top sellers sell 900 a month, and 30 a day is at most a yellow sea, so there is no need to worry too much; the seed link does not matter, in fact, it is very powerful to catch variants now, and fewer variants mean less risk.

cb small yasuo

You can use an automatic close and long-tail keyword. For long-tail keywords, you can find some absolutely accurate keywords. The ABA ranking is lower than 100,000 and higher than 500,000. If you have extra budget, you can also open an ASIN positioning ad to target your weak competitors, giving each one $10. Later, optimize the negative words according to the effect, or tilt the budget.

Young people shouldn't work

I have seen long-tail keywords, but there are few accurate keywords in this category, and the bidding is even more expensive than big words.