There are many reasons that can explain a drop in sponsored sales, here are the main ones :
- The ACOS target of a strategy was drastically decreased. For example, a change from 40% to 20% for the ACOS target will lead to a massive decrease of all bids in all the advertising campaigns that are linked to the strategy. If before the change the bid for a given keyword was 1$, after the change it will be 0.5$.
- A high-selling ASIN runs out of stock. For example, when a bestseller that represents 70% of sales runs out of stock, there will be a drop of 70% in sponsored sales figures.
- A high-selling ASIN was ineligible. Sometimes Amazon flags accidentally some ASINs in the wrong category where advertising is not allowed, this might lead to stopping the PPC on the impacted ASIN.
- A competitor is running an aggressive PPC campaign. Amazon advertising is based on a second price auction, this means that the impressions will be mainly won by the advertiser that is willing to pay the highest CPC. If a competitor starts bidding much higher on some high-volume keywords, he will likely get more impressions and more sales, this might lead to a drop in your sponsored sales.
- A big shift in demand happened. This is usually the case in seasonal categories.