ACOS Target Algorithm Overview
The ACOS Target Algorithm is designed to optimize your advertising strategy toward a specific ACOS goal (Advertising Cost of Sale). It carefully balances exploration (finding new opportunities) and optimization (improving performance) to achieve the desired ACOS while preventing overspending.
This algorithm is ideal if you’re optimizing for profit and efficiency. Once you’ve generated 5-10 ad sales per week for your product, you can switch to the ACOS Target Algorithm.
✅ Key Tip:
Start by setting an initial ACOS target close to your current ACOS. Gradually reduce it by 3-5% every few days until you reach your desired goal.
For example:
If your current ACOS is 60%, start with a target of ~60%.
After a few days, once your strategy stabilizes at 60%, reduce the target to 57%, and continue this process gradually.
⚠️ Avoid Aggressive ACOS Changes:
If your current ACOS is high (e.g., 60%) and you set the target too low (e.g., 25%), the algorithm may not perform effectively. The key is to adjust your target incrementally for the best results.
The algorithm bids on products and keywords based on:
Your historical data from the past 2 months.
Competition levels for each keyword.
Your ACOS target and desired goal.
Performance data from other keywords and campaigns.
When launching an ACOS strategy, It creates and splits keywords and products into different and multiple campaigns inside your Amazon Campaign Manager.
Keyword Management Process: What Astra Does Automatically
Astra’s ACOS Target Algorithm automates keyword management by identifying, refining, and scaling high-performing search terms without manual effort. Here's how it works:
1. Finds Relevant Keywords & Product Targets
Astra discovers high-potential keywords and product targets associated with your product.
2. Test & Refine Keywords
It refines promising targets by testing specific search term variations to find winning targets, and eliminates poor performers.
3. Scale Winning Keywords
Top-performing keywords are moved to Exact Match Campaigns for precise bidding, scaling, and maximum control.
4. Daily Bid Optimization
When a search term converts, Astra:
Adds it as an exact match keyword
Optimizes the bid based on performance
Negative targets the term in other campaigns to avoid overlap
This automated process ensures your budget is spent effectively on high-converting keywords while removing underperformers, giving you better control and improved ROI.
When a search term converts to one of our keywords, the algorithm will follow exactly the same process regardless of match type (except for exact):
Catch the search term
Add it as an exact keyword
Learns and optimizes the bid on the keyword
Negative target the search term in all the other campaigns related to the strategy
🎯 Why This Matters:
This process, which updates daily, ensures that your ad spend is allocated efficiently, focusing on search terms that drive the best results while cutting out underperformers. It also avoids overspending and saves this budget to reinvest in other potential keywords.
What happens when I change the ACOS Target?
When you change the ACOS target, the algorithm automatically recalculates bids and restarts the optimization process. However, it’s important to adjust the ACOS target gradually to allow the algorithm to adapt effectively.
Here’s how the algorithm reacts to changes in ACOS:
✅ When the actual ACOS matches the target:
The algorithm maintains the balance and tests historical search terms slowly.🔻 When actual ACOS is much higher than the target:
The algorithm will reduce bids in an attempt to reach the lower ACOS target. However, if bids drop too low, it may miss conversion opportunities. Hence why you should make sure you are making gradual adjustments.🚀 When actual ACOS is much lower than the target:
The algorithm becomes aggressive with historical search terms to capture more volume and sales. The algorithm will increase bids in an attempt to reach the higher ACOS target.
⚠️ Pro Tip:
Avoid making drastic changes to your ACOS target. Big swings can disrupt the algorithm’s learning process and cause inconsistent results. It’s best to allow a few days between adjustments for the algorithm to stabilize.
How does the algorithm handle keywords that don't convert?
If an exact match keyword in your default optimization campaign does not convert over the last 2 months, the algorithm pauses the keyword in the optimization campaign and shifts it back to exploration campaigns. This ensures that unproven keywords get another chance while avoiding wasted ad spend.
When to Use the ACOS Target Algorithm
Ideal for brands optimizing for profit and efficiency, aiming to hit a specific ACOS target.
Best suited for products with at least 5-10 ad sales per week, ensuring enough data for optimization.
Works effectively when you gradually reduce your ACOS target over time, allowing the algorithm to adapt and fine-tune bids.
By leveraging the ACOS Target Algorithm correctly, you can maintain better control over your advertising costs and steadily improve your overall campaign performance.