[Journey] Lottery Ads: The Low-Risk Way I Started Amazon Ads
Once the workflow was working and I had products posted, the next thing I added was ads. Amazon ads aren't required for any of this. But the way I run them, lottery ads, is a bet I think is more likely than not to bring in sales, and more likely than not to be profitable.
That's what I mean by asymmetric risk. The downside is small, and the upside is sales you wouldn't have made otherwise.
If your listings already get clicked and bought (the part I worked on here), this is how I started amplifying them, and how I still run it now.
What happened when I tried ads before?
I lost money. Before lottery ads, I tried ads with different strategies and lost money.
A lot of people will tell you to spend money on ads to rank yourself higher. I don't think that's the case for print on demand, or at least not for the way I'm running it.
What is a lottery ads campaign?
It means bidding a very low amount on a lot of products, and targeting a lot of keywords.
You're not betting on one product converting really well. You're putting so many eyes on your products that it's reasonable for them to convert eventually, and you still make a profit when they do.
You don't need a winner. You need enough eyes.
What numbers do you need before you start?
Two things: your profit and your target.
My target with lottery ads was still to make a profit. I was making around a 35% margin, about $7 per mug at the time, so I was happy to spend up to half of that on ads and still make the sale. A lot of ad sales are sales I don't think I would have made otherwise.
Once it's running, keep an eye on what you make per sale and what you pay per click. That's what lets you read your data and adjust the campaign based on whether it's profiting or not.
Without your numbers, you're running the ads blind.
How do I set up my lottery ads?
It's pretty simple. This is how I set it up at the start, and how I still run it now:
- Targeting: an automatic campaign, with only close match left on.
- Products: every product in the same niche goes into one campaign.
- Bid: I started around 7 cents.
- Bidding strategy: dynamic bids, down only.
- Placements: 350% top of search, 250% rest of search, 100% product pages.
What does it actually cost?
I end up paying an average of around 16 cents per click, and I average around a 20% ACOS. ACOS is the share of your ad sales that goes back out as ad spend.
That's still profitable, and it brings in more on top of the sales I would have gotten anyway. I put a full year of numbers from this campaign together here.
Want to follow the build in the order it happened? You can get it by email.
Cheers,
Nick T
