This article describes how to use budget automation in Kapoq, and contains the following six sections:
Introduction
Budget Group Settings
Campaign Settings
Enabling Budget Automation
Calculation Example
Limitations
1. Introduction
Kapoq's budget automation automatically calculates suggested budgets for each of your campaigns and sends them to Amazon/Walmart. Both Amazon and Walmart are supported. Please note that budget automation is not available for DSP.
The objective of Kapoq's budget automation is to hit the monthly target that you set at the budget group level. For example, you might set a monthly target of $50,000 for a budget group composed of many campaigns. Kapoq's budget automation algorithm will update budgets for campaigns in the budget group each day to try to hit the monthly target as closely as possible.
The primary data source for budget automation is Amazon Marketing Stream
(AMS) which provides near real-time advertising metrics and budget usage data.
Whenever AMS data is unavailable (or for channels like Walmart), Kapoq
uses data from the standard reporting APIs to optimize budgets.
Budgets are calculated at least once daily. Updated budgets are sent to Amazon/Walmart in batches every 15 minutes.
We recommend the following three step approach to setting up budget automation:
Set up budget groups in the advertising manage grid in Kapoq. This includes entering a monthly budget automation amount
Review Kapoq suggested budgets in the campaign grid, and adjust any other budget automation settings as desired (see below)
Enable budget automation at the budget group level to send the suggested budgets to Amazon/Walmart!
2. Budget Group Settings
At the budget group level, there are three settings related to budget automation:
Enable budget automation - turn on this toggle to activate Kapoq's budget automation algorithm for the campaigns mapped to this budget group.
This will send updated budgets to Amazon/Walmart. Please ensure you have reviewed all settings before turning on the enable budget automation toggle.
Monthly budget automation amount – The total monthly ad spend target across all campaigns in the budget group.
Optimization Metric - select which metric the Kapoq budget automation algorithm should optimize for.
Note that the three optimization metric choices in Kapoq are:
1. Prioritize Spend: Allocates spend proportional to historical spend, without consideration of campaign efficiency |
2. Prioritize ACoS: Prioritizes budget to campaigns with lowest ACoS = ad spend / ad sales |
3. Prioritize CPA: Prioritizes budget to campaigns with lowest CPA = ad spend / ad orders |
These settings are shown in the Advertising module under "Manage Sponsored Ads > Budget Groups", and are located in the budget group grid as illustrated in the picture below:
Example: Suppose an account has 10 campaigns in a budget group and has a monthly budget automation amount of $20,000. Kapoq will update budgets for each of the campaigns, aiming to spend $20,000 across these 10 campaigns for the month.
Additionally, clicking the calendar icon to the left of the budget group name allows you to enable additional overrides, as shown in the picture below:
For example, you can set a different monthly budget automation amount for a particular month (e.g., higher for November at $30,000 instead of $25,000) or for any specific day (e.g., 10% of monthly spend on Black Friday). If no overrides are set, the remaining budget is distributed evenly across the remaining days of the month.
3. Campaign Settings
Each campaign has the following settings related to budget automation:
Minimum budget - optionally set a floor for the minimum budget that will be suggested by Kapoq's budget automation algorithm
Maximum budget - optionally set a cap for the maximum budget that will be suggested by Kapoq's budget automation algorithm
Freeze budget - turn on this toggle if Kapoq should never change the budget for this campaign
Note: Even though Kapoq won't adjust this campaign's budget, its spend still counts toward your budget group total monthly limit.
Kapoq's algorithm always considers marketplace minimum and maximum budget constraints, but will also consider any campaign-level minimum or maximum budget settings. For example, you might set the minimum budget for a particular campaign to $500 and maximum budget to $1000. In that case, Kapoq will always set a budget for that campaign between $500 and $1000. By default, there is no minimum or maximum budget override set for any campaign and freeze budget is turned off.
These settings are shown in the Advertising module under "Manage Sponsored Ads > Campaigns", and are located in the campaign grid as illustrated in the picture below:
4. Enabling Budget Automation in Kapoq
In order for Kapoq's budget automation to apply, you must:
In the budget group grid:
Turn on the "Enable budget automation" toggle
Set a value for "Monthly budget automation amount" (must be a positive number)
Not use Amazon's budget rules
If budget rules are enabled for any campaign in the budget group, Kapoq will not apply budget automation
Have at least one campaign mapped to the budget group
Remember that campaigns map to strategies which map to budget groups. If you need help setting these up, you can do so in the manage grids or through the bulk uploads. Reach out to your customer success representative if you have any questions.
5. Calculation Example
This example illustrates how the Prioritize Spend vs. Prioritize Efficiency (ACoS/CPA) approaches optimize budgets differently.
Setup
For this example, assume the following setup:
Monthly Budget Group Target Spend: $20,000
MTD Spend: $10,000
Current Day: Morning of the 21st of the month for a 30 day month (10 days left in the month)
Then, the first step is to calculate the target spend for the budget group on the 21st:
($20,000 - $10,000) ÷ 10 days = $1,000 / day.
Assumptions
For this simplified example, assume the following:
3 enabled campaigns in the budget group with daily budgets
No calendar overrides set (as described above)
Ignore overspend allowance
Spend Forecast
The "spend forecast" is the amount a campaign would spend today if it had no budget limit.
Example: If a campaign has a $50 budget but usually runs out of money halfway through the day, Kapoq calculates that this campaign could have spent $100 if it stayed active all day. We use this $100 "forecast" to understand the campaign's true potential.
Sample Campaign Performance Data
Campaign | Spend Forecast | ACoS | CPA | Efficiency Rank |
Campaign A | $600 | 15% | $0.80 | Best |
Campaign B | $360 | 20% | $1.20 | Average |
Campaign C | $240 | 25% | $1.50 | Worst |
Budget Allocation Results
The table below summarizes how Kapoq distributes the $1,000 / day for the budget group based on the optimization metric chosen.
Suggested Budgets
Campaign | Option 1: Prioritize Spend | Option 2: Prioritize Efficiency (ACoS / CPA) |
Campaign A | $500
(Allocated proportional to spend forecast) | $600
(Most efficient campaign gets filled up to spend forecast first) |
Campaign B | $300
(Allocated proportional to spend forecast) | $360
(Second most efficient campaign gets second priority) |
Campaign C | $200
(Allocated proportional to spend forecast) | $40
(Least efficient campaign gets remaining $40) |
Total | $1,000 | $1,000 |
Conclusion
Prioritize Spend allocates budget proportionally based on spend forecast, ignoring efficiency metrics. This gives every campaign a proportional share, meaning even the least efficient campaign (C) receives a significant budget.
Prioritize Efficiency funds the most efficient campaigns (A & B) first and aggressively cuts the least efficient campaign (C). This results in allocating more budget to more efficient campaigns.
6. Limitations
Kapoq's budget automation does not currently:
Pause or unpause campaigns
Impact bids in any way
Consider portfolio limits
Update "lifetime" or "total" budgets
Budget automation only updates daily budgets. Other budget types (e.g., lifetime) are not updated, but their spend is counted for budget group pacing.
Also, please note that the goals set in Kapoq under "Analytics > Goals" have no impact on budget automation.
We do not recommend using native automated budget rules on Amazon/Walmart while using Kapoq budget automation, as this creates conflicting logic:
For Amazon: We automatically detect if Amazon budget rules are active. If found for any campaign in the budget group, Kapoq will pause budget suggestions to prevent conflicts.
For Walmart: Walmart currently does not allow external tools to detect automated budget rules. Please ensure all automated budget rules are disabled if you would like to use Kapoq's budget automation.
FAQ #1: Do I need to enable Kapoq bid automation to use budget automation?
No. You do not need to have bid automation turned on to use budget automation. You can use budget automation whether bid automation is turned on or off.
FAQ #2: Do I need to approve budgets?
There is no "budget approval" screen in Kapoq like there is for bid approvals. If you have turned on the enable budget automation toggle at the budget group level (and completed all other requirements stated in Section 4 of this article), then updated budgets will be sent to Amazon/Walmart. Therefore, please ensure you have reviewed all settings before turning on the enable budget automation toggle.
One workflow you might consider is to first set up all budget automation settings while keeping the enable budget automation toggle off. Then you can review the Kapoq suggested budget for each campaign first, and then when you are ready for budgets to be sent out you can turn on the enable budget automation toggle.