Portfolio Management: Why is my portfolio overspending/underspending?
Why is my portfolio overspending/underspending?
Underspending portfolio: the portfolio spends less budget than desired
There are several reasons why the Ad Optimizer is not able to spend all the budget as desired. Here's an overview of what can be done:
- Check if campaigns are actually delivering (e.g. not rejected or ineligible for advertising, lost buybox or availability issues)
- Add further campaigns to scale up the costs efficiently (e.g. add further products, add further campaign types, add further targeting types)
- Increase the TACoS if the current settings are limiting the performance (ACoS higher or equal to the TACoS)
-> see “How to adjust the Target ACoS of a campaign?”
Overspending portfolio: the portfolio spends more budget than desired
First case: There a several reasons why the Ad Optimizer spends more budget as desired. However, with our optimization, this will only happen on single days. The Ad Optimizer automatically reacts and decreases spending on the following days. Here's an overview of what can be done:
- Too little budget: increase the budget on portfolio level.
- Too many campaigns: focus on certain products/campaigns.
- Keywords: which keywords are driving the costs? Identify and set negatively if irrelevant.
Second case: On the other hand, it may occur that Amazon's expenditure exceeds the allocated budget. Due to variable traffic on Amazon, the daily portfolio budget is typically set at twice the planned amount per day, allowing for flexibility in spending on days with higher traffic. This dynamic budget allocation is managed by the Ad Optimizer, which automates the process. However, without real-time monitoring, there are instances where Amazon's spending surpasses even the augmented portfolio budget. This overspending can arise from various factors, such as delayed updates or potential bugs within Amazon's system.
For instance, as illustrated in the example below, a portfolio's expenditure was 23% higher than the projected amount within the additional budget. In such scenarios, Amazon reimburses the excess spending in the subsequent invoice.
For further information on potential performance issues and how to solve them, refer to this article: Performance Issues
