Key Amazon PPC Metrics to Analyze
Before reviewing campaigns, understand the metrics that indicate advertising efficiency.
These metrics should be analyzed together rather than in isolation.
For example, a campaign with a high ACoS may still contribute to growth if it generates incremental sales or helps launch a new product. Conversely, a campaign with a low ACoS may produce very little volume.
How to Identify Wasted Ad Spend in Amazon PPC
The following steps provide a practical framework for auditing Amazon PPC campaigns.
Step 1: Export Your Campaign Reports
Start by downloading the relevant reports from Amazon Ads Campaign Manager.
Depending on your advertising setup, useful reports include:
- Search term reports.
- Targeting reports.
- Advertised product reports.
- Campaign performance reports.
- Placement reports.
- Purchased product reports, where available and relevant.
Analyze a meaningful period, such as the previous 30 days, and compare it with a longer period when sales volume is low or results fluctuate.
Allow for attribution delays and avoid making decisions based on incomplete recent data.
Step 2: Find Search Terms With High Spend and No Sales
Search terms that receive clicks and spend budget without generating orders are important audit candidates.
For example:
The first search term deserves investigation because it has generated spend without attributed sales. However, it should not automatically be paused after a single click or a small amount of spend.
A better decision considers the number of clicks, relevance, conversion history, average order value, and allowable acquisition cost.
Practical rule: Set a review threshold based on your break-even ACoS or allowable cost per order. Review targets that exceed that threshold without converting, rather than using one universal spend limit for every product.
Step 3: Identify Irrelevant Search Terms
Some search terms may attract shoppers who are unlikely to purchase your product.
For example, a seller advertising premium running shoes might receive clicks for searches related to sandals, shoe repair, or unrelated accessories.
If a search term is clearly irrelevant, consider adding it as a negative keyword.
Amazon generally supports negative exact and negative phrase targeting in applicable Sponsored Products campaign settings. Check the available options for your campaign type before making changes.
Use negative keywords carefully. An overly broad negative phrase can block valuable traffic and reduce sales.
Step 4: Audit High-ACoS Keywords
High ACoS does not always mean a keyword is bad. Compare the keyword's ACoS with the product's break-even ACoS and target profitability.
For example, if a keyword spends ₹2,000 and generates ₹5,000 in attributed sales:
If your target ACoS is 25%, the keyword needs investigation.
Possible actions include:
- Reduce the bid to lower the cost per click.
- Review the search terms triggering the keyword.
- Improve the product listing's conversion rate.
- Check whether the keyword attracts relevant shoppers.
- Pause the keyword if it consistently fails to meet your profitability requirements.
Avoid reducing bids solely because a keyword's ACoS is temporarily high. Confirm the pattern over an appropriate data period.
Step 5: Review Automatic Targeting Campaigns
Automatic campaigns can help discover search terms and product targets that you might not have considered manually.
However, not every target will perform equally well.
Review the available automatic targeting groups, such as close match, loose match, substitutes, and complements, where supported by the campaign setup.
Look for:
- Targets spending budget without generating orders.
- Targets producing sales at an unacceptable ACoS.
- High-performing search terms that could be tested in manual campaigns.
- Irrelevant traffic that should be excluded.
The goal is to retain useful discovery traffic while controlling spending on weak targets.
Step 6: Check Product Targeting and Competitor ASINs
Product targeting can help place your ads on relevant product detail pages and related shopping placements.
During an audit, review the performance of individual ASIN targets and product categories.
Ask these questions:
- Are the targeted products relevant to your offer?
- Is your price competitive with the target product?
- Does the target generate meaningful sales?
- Is the cost of acquiring customers acceptable?
- Are certain targets consuming a disproportionate share of the budget?
Reduce bids or pause targets when sufficient data indicates poor performance. Keep profitable targets active even if they generate fewer clicks than other targets.
Step 7: Audit Campaign Budgets and Bids
Campaign budgets should reflect performance, business objectives, and available inventory.
A common problem occurs when profitable campaigns run out of budget while weaker campaigns continue spending.
Review your campaigns and group them into three categories:
- Scale: Profitable campaigns with room to grow.
- Optimize: Campaigns with potential but inefficient spending.
- Reduce or pause: Campaigns that consistently fail to meet business targets.
For campaigns with strong performance, consider increasing budgets gradually and monitoring the results. For weak campaigns, review bids, targeting, and listing performance before deciding whether to reduce or pause them.
Remember that increasing a budget does not automatically increase sales profitably.
How to Calculate Your Break-Even ACoS
One of the most important parts of an Amazon PPC audit is understanding your break-even ACoS.
Break-even ACoS is the approximate advertising cost as a percentage of attributed sales that leaves no contribution profit after the costs included in your calculation.
A simplified formula is:
Suppose your product sells for ₹1,000 and your contribution profit before advertising is ₹300 after product cost, marketplace fees, fulfilment, and other relevant variable costs.
Your break-even ACoS would be:
This means an ACoS above 30% would generally result in a loss on those attributed sales under these assumptions.
An ACoS below 30% would leave some contribution profit before other unaccounted expenses.
Your calculation should use consistent cost assumptions and account for discounts, returns, taxes, and other applicable expenses where relevant.
How to Turn Audit Findings Into an Action Plan
After reviewing the data, document each issue and assign a clear next step.
Make changes in a controlled manner and record the date, reason, and expected outcome. This makes it easier to determine whether an adjustment actually improved performance.
Common Amazon PPC Audit Mistakes to Avoid
Even experienced sellers can make mistakes when interpreting advertising reports.
Pausing keywords too early: A keyword may need more clicks or a longer observation period before its performance can be assessed reliably.
Focusing only on ACoS: ACoS does not measure total business profitability or the full impact of advertising on organic sales.
Adding too many negative keywords: Incorrect exclusions can block relevant searches and reduce sales opportunities.
Ignoring product listings: Weak images, uncompetitive prices, poor reviews, or unclear product information can reduce conversion rates even when targeting is correct.
Changing too many variables at once: Making multiple adjustments simultaneously makes it difficult to identify which change caused the result.
Ignoring inventory and Buy Box status: Stock availability and offer eligibility can affect advertising performance and should be checked when results suddenly decline.
How Often Should You Conduct an Amazon PPC Audit?
The ideal frequency depends on your advertising spend, sales volume, product lifecycle, and campaign complexity.
- Daily: Monitor unusual spending, budget limits, stock issues, and major performance changes.
- Weekly: Review search terms, bids, budgets, and campaign efficiency.
- Monthly: Conduct a deeper audit of profitability, campaign structure, targeting, and product-level performance.
- After major changes: Reassess performance following price changes, product launches, promotions, or significant campaign restructuring.
Avoid making major decisions based on a single day's results unless there is an urgent issue, such as clearly irrelevant spending or a product becoming unavailable.
Final Thoughts
An Amazon PPC audit is an essential process for sellers who want to control advertising costs and improve campaign profitability.
By reviewing search terms, identifying irrelevant traffic, evaluating high-ACoS keywords, optimizing bids, and calculating break-even ACoS, you can make more informed decisions about where your advertising budget should go.
The objective is not simply to spend less. It is to reduce unproductive spending while investing more confidently in campaigns that generate profitable growth.
Make auditing a regular part of your Amazon advertising workflow, document each optimization, and evaluate the results using reliable data.
Frequently Asked Questions
1. What is an Amazon PPC audit?
An Amazon PPC audit is a review of advertising campaigns, keywords, search terms, bids, budgets, and performance metrics to identify wasted spending and opportunities to improve profitability.
2. What is a good ACoS for Amazon PPC?
There is no single ideal ACoS for every seller. Your target depends on product margins, marketplace fees, fulfilment costs, business goals, and whether you are prioritizing growth or immediate profitability.
3. How do I find wasted spend in Amazon PPC?
Review search term and targeting reports to identify irrelevant traffic, targets with excessive spending and no attributed orders, and keywords whose advertising costs exceed your acceptable limits.
4. Should I pause keywords with high ACoS?
Not automatically. Compare their ACoS with your target and break-even levels, evaluate conversion data, and determine whether bid adjustments or listing improvements could make the keywords profitable.
5. How often should I audit Amazon PPC campaigns?
Monitor campaigns regularly, review performance weekly, and perform a comprehensive audit monthly. Adjust the frequency based on spend, campaign complexity, and the amount of reliable performance data available.
