Diagnose Sudden Drop in Sales or ROAS

When you observe an increase in your ACOS, there could be one of two scenarios.

Either the ACOS has risen for a few products across all campaigns where they are advertised, or it's specific to a certain campaign and not necessarily related to the products.

So, how do you find the exact ASINs for which your ACOS might have increased in the current period?

Look into the “trending products” tab on the dashboard.

The trending product tab allows you to find products with significant changes in the ACOS, spending, sales, etc. in the current period in comparison with the previous period selected in the date selector.

If you notice that ACOS has increased for just one or a few products in your entire catalog, you should first look into the factors mentioned in the product and listing section.

On the other hand, if you observe an ACOS increase across multiple products, delve into the trending campaigns to find the exact campaign names for which ACOS has spiked in the current period.

Once you've identified the trending campaigns, it's time to assess all the factors mentioned below to find the reason behind the ACOS increase.

CPC and conversion rate are the two primary factors that impact the ACOS (Advertising Cost of Sale) of a campaign or target.

In our example, there has been a significant change in CPC (47.65%) compared to the conversion rate (5.51%) of the first trending campaign. Therefore, our initial focus should be on investigating the reasons behind the increased CPC in the campaign, which has led to a higher ACOS.

To begin, we will copy the trending campaign name and paste it into the campaign filter on the dashboard. This will allow us to quickly check the trending targets within this campaign.

Here, we go.

Now we have a list of all the trending targets from the campaign that had a significant increase in CPC. Interestingly, this increase in CPC has also led to a drop in the CVR (Conversion Rate) for these keywords.

An increase in CPC can generally be attributed to either an increase in the base bid or a placement modifier adjustment within the campaign.

Let’s begin by looking into the bid change history of the trending targets.

To do this, simply open the trending campaign, navigate to the targets tab, and click on the history icon of a trending target.

In our specific case, it's evident that the brand has raised bids from less than $2 in July to over $5 in August (more than a 150% increase), resulting in a significant increase in the CPC for the keywords.

If there are no notable changes in the base bid, we should look into the modifications made to the campaign's placement modifiers, as these can also influence the CPC for a target.

(Note: In some cases, an increase in CPC can also be attributed to aggressive bidding by competitors on a specific keyword or product target.)

Whether intentionally or unintentionally, if you've negated a search term that was contributing to a large portion of ad sales in the campaign, it can lead to a decrease in CVR or an increase in ACOS for the campaign.

To review account-level negative terms that have been added through automation, utilize the Adbrew global change history page.

To review the campaign-level negative terms that have been added through automation, use the campaign change history page.

If it was a manual change and you’re not seeing anything on the change history page because Amazon only provides change history for the last 80 days, you can simply look into the negative tab of a campaign to check all the negative keywords added in a campaign or ad group.

Whether intentionally or unintentionally, if you've paused a target that was contributing to a large portion of ad sales in the campaign, it can lead to a decrease in CVR or an increase in ACOS for the campaign.

To review account-level paused targets that have been made through automation, utilize the Adbrew global change history page.

To review the campaign-level paused targets that have been added through automation, use the campaign change history page.

If it was a manual change and you’re not seeing anything on the change history page, simply go to the target tab of a campaign and look at the status of the targets (green denotes active, yellow denotes paused, and red denotes archived).

If one of your campaigns was running consistently throughout the day earlier but has recently not been running the entire day due to changes in budget or higher numbers of impressions available in the market, this can also lead to a change in the ACOS of the campaign.

Amazon's hourly performance data is one of the best sources to check how long your campaigns are driving impressions in a day.

To check this, simply go to the 'Hourly Performance' tab on the dashboard, enter your campaign name in the campaign filter, and check whether it is receiving impressions throughout the day or not.

If it is not, then it is an indication that your campaign's budget is being exhausted frequently before the end of the day.

(Note: Ensure you have selected only one week of the month, as your campaign might be receiving impressions throughout the day on one day of the week but not on the same day in a different week).

When new targets are added to an existing campaign, it can potentially result in an increase in the ACOS (Advertising Cost of Sale) of the campaign.

This is because newly added targets may take some time to get to the optimized bids and perform effectively within the desired ACOS goal.

To review the new targets of a campaign in Adbrew, follow these steps:

Open the campaign, navigate to the 'Targets' tab, and plot the spending targets on the graph.

Look for targets that were previously not generating any impressions but are now receiving impressions. These targets could be either newly added or existing ones that have seen a significant increase in bids, leading to the acquisition of impressions.

(In this example - the plotted target on the graph was not generating any impressions but recently started driving impressions).

If you have recently added too many new targets, you can visit the 'Change History' page in the Amazon ad console and get a list of all the keywords that you have added recently.

When new ad groups are created in an existing campaign, it can also potentially result in an increase in the ACOS (Advertising Cost of Sale) of the campaign.

This is because the targets added within the newly added ad groups may take some time to get to the optimized bids and perform effectively within the desired ACOS goal.

Similarly, launching new campaigns can potentially lead to an increase in the ACOS (Advertising Cost of Sale) for the brand. This is because the targets added within the newly launched campaign may take some time to reach optimized bids, and in fact, some may not work at all, requiring you to pause them after testing.

The Trending Campaigns tab can be a good starting point for checking campaigns with no impressions in the previous period that are now receiving impressions in the current period, indicating a newly launched campaign.

If you have launched too many new campaigns, you may not be able to see all of them on the Trending Campaigns tab. In this case, you can simply visit the campaign manager page and sort the campaigns by their start date to obtain a list of recently launched campaigns and their performance.

Increasing the price of your product can lead to a decrease in the product's conversion rate, ultimately contributing to a higher ACOS.

To check the price change of your product, simply visit the Product Explorer page, and click on the price of a specific ASIN. A new popup window will open, displaying the price trend graph within the selected date range from the date picker.

If your product is losing the buy box, it can also lead to a drop in impressions and conversion rates for the product.

To check if your product is losing the buy box in a given time period, simply visit the product explorer page and look at the buy box percentage. If it is less than 100%, then it indicates that your products are losing the buy box.

Changes in the delivery time of the product can also lead to a decrease in the conversion rate of the products and contribute to a higher ACOS.

The lower the delivery period, the higher the conversion rate you can expect for a product.

If you have recently made any changes to the title, bullet points, description, or A+ content of your product, it can also lead to a decrease in the conversion rate of the products and contribute to a higher ACOS.

If you don't have an idea about recent changes in the listing, simply look at the last updated date of your product listing in Seller Central.

If some of your products have gone out of stock that could also lead to an increase in the ACOS of a campaign and overall account.

To check the product stock status, simply visit the product explorer page and use the ‘availability’ filter to check all the out-of-stock products

There could be various reasons why your product may become ineligible for advertising, here are some common reasons:

You can check the product eligibility status in the Amazon ad console campaign manager.

If your competitor starts bidding aggressively on certain keywords or product targets, you should also expect your CPC to go up and eventually impact the ACOS if you want to maintain the same sales velocity.

If your competitor has reduced the price of their product, it is more likely that more and more shoppers will prefer to buy their product. This could lead to a lower conversion rate and an increase in ACOS for your product. You can track your top competitor using an SOV tracker and check their price trend history using free extensions like 'Keepa'.

If a new competitor has entered the category with a lower-priced product or an overall better product, it could also impact the conversion rate for your product.

Your ACOS can be sometimes expected to go high around the sale event due to many factors such as lower discounts on the products compared to competitors, an increase in CPC, people holding purchases before the event, etc.

If your product is seasonal, it is expected that your sales will go down and ACOS (Advertising Cost of Sale) will go up as soon as the favorable season ends for your product.