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Increasing Target ACOS v/s Inserting Min Daily Spend

Not getting enough sales? The impressions are not sufficient, and you want to increase them.

Okay, so we already know that we have two options to do the same -

  1. Increase the Target ACOS 
  2. Insert a Target Minimum Daily Spend

But which option should you select?

Let's look at how the algorithm perceives both the options -

  1. Increasing Target ACOS - When you increase the ACOS Target of the strategy, the algorithm starts to increase the bids on the favorable keywords and ASIN’s pages to gather more impressions. But while doing so it also keeps a track of observed ACOS and tries to keep it under control, i.e. under the ACOS Target. In a nutshell, you can say it plays safe and tries to optimize the performance within the ACOS boundary set by the user.

  2. Inserting a Target Minimum Daily Spend - Now, when you set a minimum daily spend, the algorithm prioritizes spending on ads that overreach your target ACOS. It might lead to a surge in spending. It multiplies the bids by a certain factor (maximum up to 20%) depending on how much your current spending is below the threshold you set.

Now, when do we recommend either of these -

  1. Increasing Target ACOS  - When the Algorithm has enough data (sponsored sales in the past) and is already running in ACOS target management mode. But, the sales are dropping because we are not getting enough impressions (reasons can be new competitors, abnormal market conditions, etc.). Or when you want to capture more sales, thus increasing your market share.

  2. Inserting a Target Minimum Daily Spend - To ramp up new products or relaunch products which have not been advertised for a long period of time. It is mostly meant to accelerate the learning process when the algorithm is missing data. Or, When the strategy is struggling, it is usually due to the limited number of data points the algorithm is able to gather in order to evaluate your conversion rate.