How To Allocate Your Amazon PPC Budget

You know the overall PPC strategy: have an auto campaign that looks for new keywords and then gradually shift spend to the manual campaigns that will drive most of your sales.

But how do you allocate your funds between these campaigns? And how should that allocation shift over time?

The answer is to split your overall PPC budget into Research and Performance allocations to control costs and optimize sales. As you create more new keywords in manual campaigns, move spend allocation from Research to Performance.

Why have a research campaign at all?

First things first. You should always have a research campaign because before you can hit your PPC targets you must know what targets are reasonable. In other words, what keywords to bid on and how much to bid on them. This requires research.

Trying to hit your target without budgeting in research will be frustrating and expensive.

How to Structure Campaigns: Research and Performance

Structure your campaigns into Research campaigns and Performance campaigns. Find good search terms and make them into keywords in manual campaigns. (Look across all campaigns, auto and manual, to find new search terms.)

Don’t forget to set negative keywords for the search terms that you pull out of a campaign, so that you can stop “researching” that word/phrase. 

It’s tempting to break your PPC lifecycle into phases: Research and Sales, and in some sense that’s true. However, remember that research should be ongoing. Having a “research phase” makes it seem like you can stop doing research. Don’t!

Let’s Get Specific: How Much to Spend?

Here’s how to set specific budgets that will allow you to scale your performance campaigns without worrying about bad keywords bleeding money.

  1. Set aside a dollar amount for the initial research.
    • $100 at the very least.
    • $500 is better.
    • We’ve seen $3,000.
    • The exact amount for you depends. Some important factors:
      • Your product
      • How well your listing converts
      • How expensive your keywords and product are
      • How much your competitors are paying for ads.
  2. Once your Performance campaigns are running well, you should gradually reduce the Research auto campaign to about 10% of your overall budget. 90% should be going to the manual/performance campaigns.
  3. Increase manual/performance campaigns as long as the ACoS is below your profit margin. Yes you’ll be spending more, but you’ll be earning more as well. Plus, ad sales drive organic sales and boost your ranking.

A Note on ACoS Expectations

As keywords are moved from the research campaigns to performance campaigns, expect that the research campaign’s ACOS will increase.

This is normal and a sign that you’ve harvested all of the good keywords. The performance campaigns’ ACoS should be much lower.

The End

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