Our latest major upgrade to Sponsored Products Smart Campaigns enhances your advertising performance. This introduces goal-based automation, advanced AI bidding, and smarter keyword recommendations. Here’s what you need to know:
Key Changes:
Goal-Based Automation: You choose your campaign goals, such as Product Launch, Grow, Profit, ROAS, or Liquidate. Our AI will automatically adjust bidding to align with your chosen goal.
Predictive AI Bidding: We've updated the controls of our AI bidder with ACOS Limit and Bid Multipliers to provide more precise and adaptive bidding.
Little Preparation Required for Smart Campaigns
If you're already using Smart Campaigns, there's minimal effort required to transition. However, there are a few important things to consider to get the most out of these enhancements:
1. Enable Profit Goal by Inputting Your COGS Data
Make sure you've entered your cost of goods sold (COGS) for each product. This information allows our AI to calculate your pre-ad gross margin, which then informs the ACOS limit for your campaigns. The ACOS limit is crucial because it determines the break-even point, guiding our bidder to optimize for profitability. When COGS is provided, the bidder can also drive higher profit dollars for your campaigns.
2. Understand the Campaign Goals
If you have launched Smart Campaigns before the latest enhancement, your existing smart campaign goals will become ROAS. The bidder will aim to maximize ad sales while staying within this target.
We suggest analyzing your advertising strategy and changing your goals to align to each campaign.
Goals should not be changed day to day. When setting goals we suggest giving each campaign at least 2 weeks before changing goal.
AI Smart Campaigns Lifecycle
When launching smart campaigns AI will use prior performance data and market analysis to start optimization at the optimal place. From this starting point, you can expect the following lifecycle for your smart campaigns.
1. Exploration Phase
After determining the optimal starting bids, the AI enters the Exploration phase. During this phase, the AI evaluates and incrementally increases bids to gather enough data to calculate the optimal bid for your new ad group. This incremental increase continues until the AI either registers a conversion or reaches 8 clicks. Once sufficient data is collected, the AI calculates the optimal bid.
Decrease: If the keyword isn't profitable, the bid may decrease.
Increase: If there's potential for growth, the bid may increase.
Stay the Same: If the optimal bid aligns with the final exploration bid, no change is necessary.
This exploration is an essential investment, allowing the AI to gather the data needed to achieve your long-term performance goals.
2. Optimization Phase
Once all keywords have exited the Exploration phase, the AI understands the optimal bids required to meet your input goals. In the Optimization phase, the AI continuously monitors performance and market trends to ensure your campaign remains on track to achieve the desired results.
Bid Adjustments: The AI automatically adjusts bid modifiers to align with conversion patterns.
Market Trends: The AI adjusts minimum and maximum bids in response to market changes.
User Input: The AI adapts to any changes you make, such as adjusting your ACOS limit.
During this phase, the AI ensures your campaigns consistently perform at or near your input goals.
3. Performance Maintenance Phase
For campaigns that have been running for more than three months, a steady state in performance may be reached. This occurs when the AI has optimized performance as much as possible based on the input parameters, and further improvements would compromise efficiency.
Steady State: The AI may be constrained by the given ACOS limit, preventing further increases in ad sales or profits without sacrificing efficiency.
Considerations: If you want to boost sales, consider increasing your ACOS limit, which may reduce your margin slightly but increase overall volume.
Reaching this phase indicates that your campaigns have been optimized to their fullest potential.
Smart Campaigns Ramp Up
Products Never Advertised Previously
If you are launching Smart campaigns for products that have never previously been advertised here are a couple things to expect:
Keyword Recommendations will be sourced from Channel suggested keywords and Chatgpt due to the lack of historical ad performance to source from.
Budgets will be set to default $10 unless edited by you before launch.
Post launch Smart Campaigns may take more time in exploration mode to gather significant data for all keywords. This time can be expected between 1-3 weeks depending on the seller.
Products Previously/Currently Advertised
If you were previously utilizing Flywheel Predictive AI bidding for ads containing the products in your new smart campaigns, Smart Campaigns will do the following to help ramp up performance quickly:
The auto-set bid modifier for the Smart Ad Groups will take the products’ previous bidder setting (ACOS Limits for the auto or manual SponsoredProducts ad groups previously running) into consideration. This will help to get ramp spend up to the previous level quicker.
Products anticipated conversion rate that is used to compute the bid will inherit the product-level conversion rate history. This give the bidder more historical data to find optimal bids faster.
Top performing Existing Keywords from previously running campaigns will be routed to your new Smart Campaigns. This will include all match types Broad, Phrase, and Exact depending on your current match types.
You should expect to see performance ramp up to previous levels of spend by the second week of running your new Smart Campaigns. A couple factors can limit this timeline which are insufficient budget, extremely low ACOS limits, or seasonality.
Why COGS Matters
By entering your COGS, you enable the bidder to understand your true profitability, allowing it to optimize campaigns accordingly. Without COGS, you may not have a clear picture of whether you're profitable or just focusing on ad sales returns. By understanding the difference between ad sales returns and profit dollars returns, you can make more informed decisions about your advertising strategy.
Enter your Cost of Goods Sold (COGS)
Providing accurate COGS data is crucial for calculating your pre-ad gross margin, which informs the ACOS limit. This helps our AI optimize your campaigns for maximum profitability.
Ensure Accuracy with ACOS Limit
The ACOS limit is key to the performance of our Predictive AI bidding. It serves as the anchor point for optimal bid calculations. When you provide COGS, Flywheel can calculate the pre-ad gross margin and automatically set the ACOS limit to maximize profitability.
What to Do if You’re Not Using Smart Campaigns
If you're currently not using Smart Campaigns, you might be missing out on some significant benefits. Here's what you can do to start leveraging the power of Smart Campaigns and enjoy a more optimized advertising experience:
Review your ACOS Target
If you were utilizing predictive AI before these enhancements, your prior ACOS target will be used to set the ACOS limit, which is critical for determining the optimal bidding strategy. Make sure your ACOS Limit aligns with the break-even point of the products within each ad group. For external campaigns, you can utilize the bid modifier to adjust desired performance based on that break-even point. For Smart Campaigns AI will automatically optimize your bid modifier to meet your goal.
Convert Existing External Campaigns to AI Smart Campaigns
If you are not utilizing Smart Campaigns, consider restructuring your existing campaigns and launching Smart Campaigns. This will give you access to our goal-based automation and advanced AI-powered features, allowing you to drive better results with less manual effort.
For a list of Frequently Asked Questions, click here!