Before you change anything: set your target ACoS
ACoS is ad spend divided by ad-attributed sales. Lowering it for its own sake isn't the goal: a low ACoS with few sales can leave money on the table. The starting point is your break-even ACoS (your margin before ads) and the target ACoS for each product, as we explain in how to calculate your target ACoS. If you still mix up ACoS, TACoS and ROAS, see what ACoS, TACoS and ROAS are.
With the target in hand, every target (keyword, product, category) gets an objective question: is it above or below target, and with how many clicks of evidence?
1. Negate search terms that spend without selling
Open the Sponsored Products search term report and sort by spend. Terms with lots of clicks and no sales are the most common leak. A simple rule: if a term has already received enough clicks to have generated at least one sale at your average conversion rate and it hasn't, it's a candidate for a negative.
- Use negative exact to cut a specific term without affecting variations that sell.
- Use negative phrase when the word itself points to a different product (for example, a material or model you don't sell).
- In auto and broad match campaigns, also negate ASINs of products that only eat clicks.
- Before negating, check that the term doesn't sell in another campaign — so you don't lose a sale that simply moved.
We cover the criteria in detail in how to add negative keywords without losing sales.
2. Set each target's bid from your target ACoS
The bid that fits your target comes from a straightforward formula: max bid = average selling price × conversion rate × target ACoS. If the product sells for $40, converts 10% of clicks and the target is 25%, the bid that keeps ACoS on target is around $1.00.
- Targets above target ACoS with enough clicks: lower the bid in steps (for example, 10% to 20% per round), not all at once.
- Targets well below target ACoS with few impressions: there's room to raise the bid and gain volume.
- Targets with few clicks: wait for more data before drawing conclusions.
Swap the target for your break-even ACoS (the margin before ads) and the same formula gives the max profitable bid: above it, each click loses money. EcomVision shows this cap for every keyword and keeps automations under it; see max profitable bid and the safeguards against high ACoS.
3. Separate campaigns by goal
Mixing discovery, winning terms and branded searches in the same campaign lets budget flow wherever it's easiest to spend, not where it sells. A simple structure:
- Discovery: auto and broad, with lower bids, to find new terms.
- Performance: terms that have already sold, in exact match, with bids calculated from your target.
- Brand: searches for your brand name, which usually have a low ACoS and shouldn't mask everything else.
When you promote a term from discovery to performance, negate it in the source campaign so the two don't compete for the same click.
4. Review placements
The same target performs differently at top of search, rest of search and on product pages. In the placement report, compare ACoS and conversion for each. Use placement bid adjustments only where conversion justifies it — boosting top of search without better conversion is the fastest way to drive ACoS up.
5. Make hours of the day work for you (dayparting)
If conversion drops at certain times of day, lowering bids during those hours cuts unproductive spend. Amazon offers schedule-based bid rules in Sponsored Products, and we cover the topic in how dayparting works on Amazon. Decide based on weeks of hourly data, not a single day.
6. Improve ad conversion
ACoS depends on how many clicks turn into sales. If the page converts poorly, no bid change will fix it on its own. Review the main image, title, bullets, reviews, available inventory and whether you hold the Featured Offer (Buy Box) — without it, Sponsored Products ads may not even show. More conversion at the same cost per click lowers ACoS directly.
Suggested weekly routine
- Monday: search term report — negate what spent without selling.
- Tuesday: recalculate bids for targets with enough clicks, based on each product's target.
- Wednesday: promote winning terms from discovery to the performance campaign.
- Every two weeks: review placements and hours of the day.
- Monthly: review the product pages with the worst conversion.
How EcomVision helps
The Ad Spend Leak Finder lists the terms and targets that spent without selling across all campaigns, with the amount wasted, so you can negate them in bulk. Target ACoS is calculated from each product's real margin (cost, fees and other expenses), and Ads Automation rules and Dayparting apply bid changes with a simulation mode before they go live.
