Amazon has a feature called Budget Rules for Sponsored Products ads, which permits sellers to set budgets for each of their campaigns in advance.

Amazon Budget Rules allows sellers to automatically increase budgets during major events such as Prime Day, Black Friday, Cyber Monday, or during seasonal/categorical events like Easter, Halloween, and back to school.

How Sellers Benefit Using Budget Rules

Budget rules:

  • help ensure that high performing campaigns do not run out-of-budget
  • reduce missed opportunities for sellers due to insufficient budgets
  • help to improve the chance of receiving additional clicks and sales
  • provide recommended budgets based on historical shopping activities
  • help sellers to save time by setting budget rules that automatically increase campaign budgets for strategic events instead of them having to manually adjusting campaigns

The Two Types of Amazon Budget Rules

Sellers can set campaign budgets in advance using two types of budget rules for Sponsored Products (Scheduled-based and Performance-based).

Schedule-based Rules

Schedule-based rules allow sellers to set budgets in advance for a customized date range or special sales event.

The rule will increase the campaign budget by the percentage a seller specifies during the date range the seller sets in the rule or during the special event selected.

For schedule-based rules, sellers can choose from Amazon recommended shopping events (like Valentine’s Day or Prime Day), or they can select a custom time period with daily or weekly recurrence. Sellers should choose the recurrence based on their understanding of the type of traffic that their campaigns usually get (daily, on a specific day of the week or on the weekends).

Sellers can also increase their budgets for a limited time in a day according to the specified percentage.

There are four parameters that sellers need to provide when setting the Schedule budget rule. They are rule type, date range, recurrence, and 'increase budget by'.

Pro Tip: Amazon will recommend special events based upon the products in a seller's campaign and when they anticipate more demand triggering a need for an increased budget. For example, a seller may receive information related to their previous best budgets for a Cyber Monday sale. If a seller removes or updates their products from a campaign, Amazon will not remove the rule, but the recommendations might change.

Performance-based Rules

Performance-based rules allow sellers to set rules to increase their Sponsored Products campaign budgets when their campaigns meet a certain performance threshold using campaign performance metrics such as ACoS, click-through rate, conversion rate and ROAS.

Amazon calculates these metrics using data from the previous seven days for sellers and fourteen days for vendors. Campaigns must have a minimum daily budget of $10 to use performance-based rules.

Playing By the ‘Rules’

  1. Budget rules are evaluated on a daily basis in order to calculate the campaign budget for the day.
  2. A seller's rules must satisfy the conditions to increase the budget according to the specified percentage. Otherwise, the daily budget rule will be implemented on specific campaigns.
  3. Whether a seller creates a new budget rule or makes an update, it will be evaluated immediately.
  4. If a seller has specified more than one rule and the conditions of more than one rule are met, then after Amazon's evaluation the rule having the highest budget will be applied.
  5. The seller's budget rule can either be active, paused, on-hold, pending start, expired, or the budget threshold not met.
  6. Sellers can check the historical values of their budget rule for up to 90 days. Along with it, they can also view changes in the daily budget.
  7. Sellers must still go campaign-by-campaign to set these rules into place, rather than having a bulk update or an option to choose multiple campaigns all at once, to set the rules.

Pro Tip: Once a seller has implemented either a scheduled or a performance-based rule, he or she will not be able to decrease their budget for that campaign. Amazon only allows a seller to increase their campaign budget or go back to their ‘normal’ budget for the campaign.

Budget Rules permits sellers to exercise better control over their budgets, which can be a life-saver during seasonal sales periods or on peak days. If you are interested in learning other proven strategies that can help your Amazon business to be more profitable while reducing your Ad Spend budget, schedule a call with the Entourage Management Services team.

Entourage: Software to Scale Amazon Ads and Results Driven Management.