Today I’m going to show you how we were able to increase our client’s ad revenue by $11,303 in 4 weeks by simply refining his Amazon PPC campaign structure.
How did we achieve this growth in such a short period?
The Silo Method. A method that we developed to help to address poor Amazon PPC campaign structure, and a method that sets our clients up to scale while controlling ad costs.
Read on to learn how the silo method can set you up to scale while controlling ad costs and how you can implement it in your own campaigns.
How Changing the Amazon PPC Campaign Structure Increased Sales from $2,408.34 to $13,712.02 in One Month
When I met Chris in late August 2019, he had just purchased a company that sold commercial cleaning products primarily on Amazon. While the products and reviews were great, the previous owner never did much advertising.
In fact, when I pulled the reports, the products had generated $2,408.34 in the previous 12 months.
So while Chris had the advantage of having great products and reviews, he had no clue how to improve on the minimal sales.
However, Chris knew that his ultimate goal was to sell the company in a few years once sales and the value of his company had increased. With that goal in mind, Chris sought some professional help.
That’s where we come into the picture.
We teamed up to help manage Chris’ advertising campaigns on Amazon to increase the value of his business. We showed him our silo method and he jumped onboard and never looked back.
Over the last 12 months our silo method has been able to generate over $509,577.02 in sales for Chris at an ACoS of 21%. Because of the increased volume, his organic keyword rankings increased, and he was able to renegotiate better terms with his supplier to further increase his profitability.
- Campaigns have now scaled to produce an average of $54,000 in sales per month
- Average ACoS is held steady at 20%
- Consistently top 3 organic search results for important keywords
- Renegotiated with supplier to get more profitable terms
The Quick Background of the Silo Method
I initially learned about the silo method in 2003 when I was learning how SEO worked for websites.
In SEO speak, silos help both the search engines understand the content on your site, and the site owner keep everything organized.
Let me explain. In farming practices, silos are used to store and protect grain. They help farmers keep the wind from blowing everything away. In SEO terms, this is valuable because it keeps your website organized and easy to navigate for your users; no topics blowing across pages and getting all messed up.
And while the search-engine benefit isn’t applicable to Amazon sellers, we felt we had hit upon something useful.
Through some trial, and some errors, and lots of success, we adapted the silo method for Amazon marketing.
The Rules of the Silo Method
During our adaptation of this SEO technique, we discovered two rules that must be enforced for the silo method to be effective on Amazon:
- A product could only be placed in one silo.
- The targeting for each campaign could only be placed in one silo.
And while there are always exceptions to the rules, we found that by sticking to these rules our success rate became much more predictable.
So let’s look at how we implemented this strategy for Chris and why it works.
6 Steps to Implementing Silo Method:
While every account and client we work with has a few exceptions—we assume you probably do too—we wanted to detail the steps we took to build out Chris’s strategy and campaigns to see if the success was replicable. It was. And here it is.
1. Determine Which Products / Categories were Important to Advertise
The first step was to determine which product and categories were important for Chris to advertise.
This step sets up our initial silos and gives us a single spot where we will place the related products and keywords as we move through the steps listed below.
Side note: Don’t worry if you need to change your silos as you progress through the rest of the steps. It happens to us all the time.
Since this was a new business to him, but had many years of selling on Amazon, his organic sales were strong for about half of his products. And after looking at his margins, there were a few more products and categories that he decided weren’t worth advertising.
This was surprising to him, but he was glad that he took a look at his numbers to make a more informed decision.
We highly recommend you follow these steps and understand your numbers and priorities.
2. Analyze Campaign and Overall Sales Data
Since Chris had very little advertising data, there wasn’t much to look at. But we still didn’t skip this step.
The two advertising reports we suggest you run:
1. 60-Day Bulk Operations Report
2. 90-Day Search Term Report
Pro Tip: To get the full 90 days in the search term report you need to manually select the dates on the calendar instead of using the default options.
Armed with both of these reports, you now have everything you need to get a clear picture of how everything is set up and running.
We use the bulk operations report to get an overview of how the campaigns are set up and which products are currently being advertised.
We use the 90-day search term report to find which search terms and queries are driving sales and/or wasting ad spend. We also use this report to give us ideas for keyword research.
3. Conduct Keyword Research
With the limited data we had from Chris’ past campaigns, we started conducting our keyword research for each silo.
While we are always testing our new research methods, we find that the results we get from Wordtree.io, and making note of the suggested search terms Amazon provides directly on Amazon, are usually all we need to get started.
4. Conduct Market Research
After we have finished our keyword research, we will pick out our top 5 – 10 keywords and search each on Amazon to see which products show up on the first page of the search results.
While this might seem like an unnecessary step, we have found that it has greatly increased our success rate and in some cases will add a few additional silos.
Armed with this data, we know which products should be advertised with specific keywords.
For example, Chris has a product that comes in three sizes. After quickly searching on Amazon, we found that Amazon seemed to favor one size in particular. Because of this, we immediately knew which variation to advertise.
At the same time, we found that most of the products for a certain keyword had a price range from $20 to $30. Because of this, we eliminated the premium versions of this particular product and prioritized the standard version that was in this price range.
5. Finalize Silos
During this step, our goal is to identify the top product(s) and related keywords that will represent the silo.
After we finalize our research, we will send it over to our client and make sure that they are on board.
In certain cases, they might suggest a different ASIN based on changes from the manufacturer or a change in goals.
However, in Chris’ case, he was good with our plan and didn’t suggest any changes.
6. Rebuilt Campaigns and Launched
Armed with our new silos and game plan, we quickly built out and launched our new campaigns.
During the first few weeks we let the campaigns run and accumulate data. At the 30-day mark we typically have enough data to see if we need to build out any additional silos or simply adjust the ones we launched.
In this case, we had to do a little of both and build out 2 additional silos and make a few adjustments.
For the new silos, we will repeat the steps mentioned above to ensure that we are setting ourselves up for the best results possible.
As you can see, there is a little more involved than just quickly grouping products together and launching some campaigns. However, the extra time and effort that it takes to run through the steps has paid off for many of our clients.
And while there are certainly additional reasons why this success was realized, simply taking the time to pair your products and keywords together builds a foundation that makes expanding much easier and predictable.
So whether you have current campaigns that aren’t doing great, or are getting ready to build new ones, by following the six steps listed above and improving your Amazon PPC campaign structure, you will be setting yourself up for success.