Ritu Java 10:55

Yeah, so I think the one metric that I would like to draw everybody’s attention to is the PPC to organic ratio, like that ratio will tell you what percentage of your sales are coming from ads, and what percentage are coming from organic. And if you look at that percentage, over time, you will see that there’s been a significant shift, there used to be a time when 20% of your sales could come from ads. And you could basically spin up the flywheel and get relevance for a lot of important keywords. And you know that that was the formula for success, right? Just a little bit of your ad spend would drive a lot of organic rank, not anymore, right? In fact, now we’re seeing a shift in the other direction, where 50 to 60% of a lot of brands sales are actually coming from ads, which is scary. But it’s also inevitable because Amazon is becoming more and more pay to play, right, the first page is crowded with ads, right? And then there’s so many competitors, you know, including from mainland China, the factory brands that are competing side by side with us right on with Western brands. And they have an unfair advantage, they have just too many advantages. And they can easily kind of knock us out right? To the post I was reading recently where they were talking about, you know, how ChatGPT has kind of leveled the playing field even more and Chinese brands can now have access to perfect English and perfect bullet points. And so then what is the way to differentiate, you know, everything looks good for, for them, and it’s very hard, anymore to stand out great. So organic ranking is good, great. But then what we’re actually seeing is that we’re even fighting for PPC ranking. Like we’re not even getting the first four spots on PPC, which is crazy, you know, no matter how much you pay it, you know, you’re you’re really having to struggle to get just to stay in that part. So, which is why it becomes even more important to understand everything that advertising has to offer, look for low hanging fruit that other people are not paying attention to. So you’ve got to be very kind of vigilant, looking out for new opportunities, because as soon as new updates or new opportunities come out, that’s the time you want to get in real quick. Because you know, as time goes by, everybody’s going to catch up, all those techniques will be out, and then you lose your advantage of first mover advantage. So being vigilant being, you know, aware of the space and even embracing advertising, because you can’t I know there’s a love hate relationship there. I know everybody, you know, hate the fact that Amazon not only takes a share of their profits, but then you have to also keep aside a bunch of that for to advertising. So I guess the faster you embrace the fact that it’s inevitable, and come up with smart strategies to help you stand out the better.

Josh Hadley 14:09

Yeah, Ritu, I think you did.. that was a great summary. I think like, the faster you adopt the PPC, the better. Because I think there’s a lot of sellers that kind of pull the cover over their heads and like, I’m just gonna pretend that I don’t need to do anything with PPC or or I’m just gonna turn on my auto campaigns, because PPC is just so complicated. Right? And we’re definitely moving over the next five to 10 years. Where Yeah, I think I love what you noted there, that right now we talk about what’s your organic ranking, and how do we get ranked organically? I think that conversation five to 10 years from now is like, how do we get ranked on our PPC ads in spots one to four right like yes, what are the things we should be doing now in order to qualify to be at from number one or number four on that top of search from Amazon. Right?

Ritu Java 15:04

Yeah, that that is the struggle at this point. How do you even get shown with ads? Yeah.

Josh Hadley 15:10

So I love that. I also love the fact that you talked about that first mover advantage for advertising. I think that is extremely important. You want to talk about, you know, any type of low hanging fruit? How do I reduce my CPC? Because, you know, CPCs can be crazy expensive in certain categories? Well, honestly, the only way to really reduce those CPCs, because right now, they’re only going to get higher is to take advantage of anything new that Amazon gives us in regards to advertising. So anything new that comes out, if you can take advantage of be that first mover advantage? Advantage? That’s where you’re going to create the most success? I want to loop back to that PPC-to-organic sales ratio that you talked about at the beginning re to what is what would you recommend from the hundreds of accounts that you viewed the sellers that are using your platform and software? What do you see right now is a healthy balance of PPC sales to organic sales for an established brand?

Ritu Java 16:16

Yeah, and I think it’s very dependent on the category, some categories are so saturated, that 60 4060, PPC and 40%. Organic is becoming the norm. For example, just giving an example from the pet space, just so crowded, like especially if you’re selling any kind of dog toys, or, you know, pet products and things like that, there’s so much competition there that, you know, 50 to 60%, coming from ADS is pretty normal, like there’s no chance you can compete with mainland Chinese brands with just organic, they’ve already got 20,000 reviews and more like, can you you know, how can you even compete begin to compete with that, right. So the ad become your only way, your only chance of being seen. And that leads to the 6040 ratio, but in some of the other categories were a little bit more, you know, difficult for anyone to imitate you, or to provide services that don’t require human, you know, intensive work like the board or whatever, like after the fact, it’s probably still okay to get like 40% from ads, and 60% from organic. So let’s say research heavy products, or products that require or have a good margin, right, have a good margin, that aren’t not so easy to imitate those categories, you’re still seeing quite a healthy ratio. So it totally depends on the category. I would recommend just making a note of that number today and just watching it over time, because this baseline that and that, you’ll see whether it’s going up or down.

Josh Hadley 18:06

Yeah, that’s good input. And on that note, while we’re talking about metrics, what do you see as a healthy TACoS percentage for an established brand? And I’m sure it changes based on what category you’re in for sure. If your supplements you’re playing a much longer term game, and you’re playing on subscriptions and repeat customers. But let’s say for an average brand, right, that has, you know, one time customers more often than not, what do you think is kind of the ballpark? Tacos numbered to ensure that they’re, they’re healthy and competitive? Across the board?

Ritu Java 18:41

Yeah, so that’s such a great question, really a million dollar question. So okay, here’s what I think of tacos. Now your tacos is going to be different at different stages of your journey. So you know, when you are starting off your tacos needs to be competitive with the market. You can be looking at tacos or the profitability metrics, it’s more of like, what’s the maximum I can afford to spend in order to get this business off the ground. But then as time progresses, and you start to see, you know, revenue coming in flywheels, working, everything is going fine. Then you start to tweak the, you know, the tacos, target a little bit to kind of make it more profitable. So I think it’s the kind of calculation that I look for in a three point. So I look at spend, I look at revenue and I look at profits, right? So initially, when you’re just starting off, you know, even the smallest amount of spend will result in a drop in profit. You know, you’re starting off you’re spending money on ads, all of that is eating into Your profit. But at a certain point, the spend, as you increase your ad spend, it’s actually going to generate revenue for you. Right? So what’s the sweet spot when those two lines kind of cross over that the target tacos that is going to ship with, with, you know, the majority of your of your account. So we do say that the guideline is that we don’t want to spend more than 50% of net margin for your for your advertising. So I guess if you can keep that just general rule of thumb in mind, you should be fine. So no more than 50% of net margin, eventually, you want to get there. But in the beginning, you’re probably just going to be so breakeven, that it’s going to be like adding or taking away from from your profit, and you’re not left left with anything. So yeah,

Josh Hadley 20:56

excellent. So you say 50% of the net margin, right? Yeah. So that in for our listeners, what that basically means. And I would assume that’s kind of your gross margin, right? Because you’ve got your Amazon sales generating revenue, right. So that’s metric number one revenue, then you’ve got to deduct your cost of goods sold, that would be number two. And then the other metrics that you’re going to need to take into account are going to be your FBA fees. And then that Amazon referral fee, right, so you got 15% for the referral fee, your FBA fees that you’ve got to add in, and your cost of goods sold. So let’s say at the end of the day, your gross profit margin after you take your revenue and subtract those expenses that we just talked about, you’re sitting at about 40%. Let’s assume, right, you’re saying that you could probably spend up to or probably have a 20%, tacos, number? Is that what you’re recommending? Or do you even hear 20%? You’re like, wow, that’s way too much blood too. What’s your feedback on that?

Ritu Java 22:02

Yeah, so so, you know, for an established business, it’s okay to do to that, you know, to the gross margin. But I would say net margin is more accurate. Like, you’ll probably want to also look at your overheads, just to see how healthy your business is overall, right? If you’re spending on the tip five employees, we’re also helping us all of that needs to be taken into account and amortized over whatever inventory you have and come up with some numbers. Initially, you won’t need to do net, and I think your calculation works fine. But the moment you know, you’ve gotten to a point where, okay, you’re looking at like it like it’s a sustainable business, then definitely, you know, look at the net margin and try to peg your target to no more than 50 so that you can take back something, right. Yeah. Reason why we’re all doing Amazon businesses so that we can make income that you know, will sustain us. You know,

Josh Hadley 23:00

I love that approach. Honestly, you’re the first one to ever, like provide that type of approach. Usually, somebody’s just gonna pull out a ballpark number, right? It’s gonna be Well, I think it’s 10%. I think it’s 15. Other people are gonna say it’s 20%. But what I love that you talked about is Yeah, even on that net margin number, right? So what’s your net profit every month, right? When What’s that percentage of your revenue, then divide that by 50%. And that’s probably the budget that you should allocate. It’s just a general rule of thumb. And as your business matures, you can, you know, open up the floodgates, or, you know, shut them down a little bit more, according to your needs. But the most important thing that you talked about is focused on that profitability standpoint. If somebody is bootstrapping their business, you know, you could real quickly just drive yourself into the red overnight, just by turning on Amazon advertising, right? Like you can, Amazon will spend as much money as you’re willing to, to give them right. And so if you’re not looking at your financial metrics, and you know how to calculate, hey, you know, what’s my, what’s 50% And my net profit margin, then that’s probably where you need to start focusing is getting your books in order so that you can calculate that number. So that’s some basic accounting 101 there. But really, to let’s dive into the real meat and potatoes of today’s conversation, yeah, Amazon’s laid out a lot of new ads, they’re always coming out with with new stuff, new console, new you UI etc. One of the newer things that we have seen has been sponsored display and kind of being charged on a cost per impression, right? A CPM basis. And there’s some interesting data that we’re finding from that. So, Ritu, why don’t you kind of spill the beans and what you’re seeing from your side as it relates to sponsored display ad campaigns on Amazon.

Ritu Java 25:03

Yeah. So, sponsored display, you know, has been imitating DSP to quite an extent. And the closest kind of DSP sibling on the the Amazon ad platform is the vCPM campaign type. The way you start these ads is when you create an SD ad or responsive display ad, in the bidding section, they will ask you whether you want to optimize for reach, optimized per page visit or optimize for conversions. So the first one which is optimized for which is the one that we’re talking about today, which is a CPM based model, which means that you will get charged on views or viewable impressions and not on clicks. So people can see your ad for just one second, like if they see have your ad for just one second, it will be counted as an impression that you will pay for. And this is exactly what the model is right? The DSP model is based on impressions. Now, the problem with this kind of ad is that the reporting kind of failed us. Everything else on Amazon is a CPC based model. This is the only ad type that is charging us on impressions. Now Amazon has tried to include data coming from this ad type on the same platform on the same console. And they’re, I think they’re failing miserably in the reporting side of things. Because if you’ve seen an ad from the corner of your eye, you’ve not ever clicked on it. How can you say for sure that that’s the one that contributed to the sale, right. And so that becomes very tricky, because Amazon is reporting, sales, even when those sales happen to just regular organic visits to your product. Digitation. The way it plays out is as follows. Let’s say someone is on your product video, they came through whatever path they came through an ad they can throw organic, whatever it is, they’re on your page. Now, the CPM shows up on the side at the bottom at the top somewhere on the right, we don’t know, right, it could be just a viewable impression. And because Amazon reports last touch attribution, which means that the last ad they saw will get the credit, not the first one, right, the last one will get credit. So this vCPM campaign is getting credit for something that you’ve already spent maybe a lot of money bringing people over to your page, or through organic two people are already there. And then they see this ad, it acts as a closer, which means that it’s basically assisting sales, in a sense, it’s blocking out some competitor, maybe, yes, it’s doing all of that. But it’s also not clear whether someone really noticed that like imagine half an ad for one second is counted as an impression. That’s, that’s a pretty low threshold for being counted as you know, the the thing that contributed to the conversion. So so that was the confusion. I think everybody was confused about it. But now we have conclusive data to show that this archetype is actually misleading in many ways, right? So let me explain how we found this and how you can also kind of detect if this is happening in your case, the first thing we noticed was that the A cause on these campaigns is amazing. Point 5%. A costs 3%. A costs.

Josh Hadley 28:42

Oh, yeah, I’ve seen that even in my own ad account, right? Like, oh, my goodness, I’ve I’ve found the golden nugget of Amazon point 5% A cost, right.

Ritu Java 28:53

Yep. And this is wishful thinking, because everybody wants their ads to work like this right point. 5% a cost beautiful, wonderful. What they don’t understand is that this is being calculated based on impression. So if you have, you know, impressions and no clicks on your ad, you will still be charged and you will still be shown that you had a sale from this impression, which is great, right? That’s what they want to have us believe. So because it was so low, the cost was unbelievably low. We were very suspicious of this data from the start, but there is no way to prove it. We ask Amazon they say everything is fine. You know, this is driving new sales. People are looking at it. This is you know, this is what brand awareness is all about and all that stuff, right? Then comes this new report that we discovered, which is called the actually it’s just a campaigns report. So if you go into your sponsored display, or if you go into your ad console, look for reports then go into sponsored display, and within that down All the campaign’s report, the campaign’s report now has an extra column, which is called 14 day total orders by clicks. This is the metric that you want to pay attention to how many sales came from click based conversions, not new based conversions. So the difference is darkling, right. If you just do this calculation yourself in the same sheet, you will see both these columns just orders put in the total orders and put in the total orders by clicks, you will see the difference. And I could show you one. Let me share my screen. I know people who are listening won’t be able to see this, but

Josh Hadley 30:45

but if you come check out the YouTube channel, you’ll be able to watch this video and see what Ritu is sharing. So quick shout out, go find eComm Breakthrough. Remember e-comm with two M’s on YouTube, and you can see Ritu’s screen here.

Ritu Java 31:02

So here’s the discrepancy. As you can see, I have on my screen, the cost type, which is the CPM, we spent $23,000 on most and the sales reporter by Amazon on this on these ads was $241,000 in sales, right, which gives me an A cause of only 9% 9.6%, which is pretty good, right? Pretty good. However, if I look only at click based sales, the click based sales, that means someone actually clicked on my the CPM ad was only 6876, which means my click based a cost is 337%.

Josh Hadley 31:40

Just a little difference, just a little different.

Ritu Java 31:43

So this is this is something, you know, everybody can, you know, download today and, you know, find this discrepancy on their own. That’s one kind of way of looking at this data. But as you know, I am very fond of data science. So I actually went and played with Amazon Marketing Cloud. So Amazon Marketing Cloud is a little advanced, it requires a setup. And then it gives you a lot of good data. The one that I was most interested in was first touch attribution versus last touch attribution. So last touch attribution, which is the default model on the Amazon console, which is how they’re reporting such inflated numbers is going to show that everything is great, but with the CPM. But if you look at the same data and say what if this was a first touch attribution model? Did vCPM initiate I mean, we know that it closed but didn’t initiate any conversions. So when I compare those two side by side, the difference was, you know, absolutely plain and clear. So for first touch attribution, we saw that 3000 sales came from vCPM. And if you look at last touch attribution, 68,000 sales came from recipients. So that’s the amount that’s the magnitude of difference that, you know, we’re basically ignoring because of the way the reporting is happening on the console type. So it’s an eye opener. So what did we do? Right, so now, here comes the action, right? The action is, we bought all our vCPM campaigns, like all of them. And then this is for one, one of our accounts, they went from 8.5 Tacos, down to 4.9%. Tacos. Crazy amazing, because what basically what this means is that we were spending a bunch of money, pushing these ads looking like this was causing all the growth, but the growth was the same. There was basically no growth on the top line. Everything was just the same, it was just our spending a lot of money. So we just got rid of that archetype. Got a little bit of pushback from the client, because they were like, What happened to our sales? Like, those sales were not real. So the the ad sales dropped quite a bit, but the tacos went down as well. And we gave them a bunch of money back to keep. And I think that that was the right right thing to do. Now, do I think that the CPM campaigns are garbage entirely, maybe not. Because they do serve a purpose. Right now, if you are a big brand who’s looking for maximum exposure, don’t want anyone to get in, you know, on the side rail, the bottom the top of your bar detail page, you don’t basically want to block out all your competitors with as much ad real estate as you can get. This ad might be good for you. I mean, keep a limited budget and drive it. It’s going to show up like it’s going to show up as as many times as you’d want it to Um, the other thing is, you know, because it’s reach based, it can also show up off Amazon. Right. So those, those are other advantages. But what we’ve noticed is that most of these, especially DSP, basically prioritizes, the Amazon platform and not outside. So this is also following most likely the same kind of model. So yeah, it might be good, but be mindful of how much you’re spending on it, like keep your budget cap on this, if you just want to use it as a side experiment, go for it. But if you’re always focused, if you are looking to, you know, increase your profit, then I would just stop you. Yeah,

Josh Hadley 35:40

yeah, I think that is such an important like, highlight that you just identified. Because, again, a lot of sellers are going into this thinking that oh, my goodness, like I found the goldmine of Amazon advertising. This is newer ish. And so yes, first mover advantage, look at these low a cost that I’m getting. And I think here’s the big mindset shift that everybody needs to understand as it relates to DSP, or even sponsored display, effectively what you’re doing. And the strategy is typically used by very big established brands. Let’s take American Airlines, for example, right? American Airlines, may put up some billboards right along the road, just to raise awareness, right, just to be on the top of your mind. That’s about it. Right? They’re not saying, well, because this person saw this billboard, while they’re driving, they’re going to immediately start searching for a flight. No, that’s not the intent. Same thing, American Airlines sponsored the American Airlines Center in downtown Dallas where the Mavericks and the Stars play, and all of it, they have their logo on the court, they have their logo on the building their intent, you know, people going there, they’re not going there to buy airline tickets, they’re going to a sporting event, or concerts, or whatever it may be. Yet, it’s just kind of that brand awareness. Now, in my opinion, for those of us that you are bootstrapped, you are trying to build your own brand and growing it to eight figures and beyond, you know, a lot of these, you know, I’m not gonna go put up a billboard, for my business, just to raise awareness. Because that’s not at the that’s not where we’re at in our business in terms of the needs of the marketing. There we are much lower down the funnel. And I would argue that 90% of our Amazon sellers, 95, if not 99% of them should just be focused on that bottom of the funnel, there’s still so much room for optimization there, that turning on sponsored display, you’re in a whole new ballgame of Imagine if you are considering advertising on billboards as you’re driving down the road, or consider advertising at the American Airlines Center. That’s kind of the analogy I think people need to see in their mind. And then, Ritu, let’s piggyback off of this. The reason why this is such a big problem is because Amazon is going to start inflating your advertising data to make it appear as though it’s so effective. When in reality, let’s imagine I’m going I need to go to Walmart today to go pick up some groceries. But while I’m driving on the road, there’s a built a billboard for Walmart. And all of the sudden, you know, in some amazing way, you know, Walmart gets that feedback of oh, he saw the Billboard, and then he showed up at the store. So this the reason why Josh showed up at Walmart today is because he saw the billboard, know that that is not the case, I was going there already. That’s what’s happening on Amazon, effectively. You’ve already seen this product, you’ve already clicked on it from a you know, a regular sponsored ad, or a headline search ad or you’ve seen it on the storefront. And then lo and behold, it loads somewhere on some other random page. All of a sudden Amazon saying Well, it’s because they that they saw this, Amazon doesn’t even know if that end user actually even saw that impression. They have no idea it just loaded on the screen. So I think that I mean, you’ve dispelled a huge issue, I think with sponsored display, and I think sellers before you get into it need to go into it with a full open, you know, their eyes wide open in terms of like what Amazon’s reporting, I like that you uncovered, you know, that first click attribution, there is a way that you could actually see is it being effective? Because yeah, maybe there is a place but not at 300% A cos for most people. Right?

Ritu Java 39:47

Right. Yeah. Yeah. And just a couple more things like I have nothing against sponsor display in general. So there is one other type of positive display ad that I absolutely love and use, but is actually to so use remarketing and purchase remarketing those two are really powerful because we bring back people that may have visited a page and did not purchase so they at least keeping track of the purchase part of it that they did not purchase your ad won’t go waste, you will be shown only if the purchase has not yet occurred. And the purchase Remarketing is great for people who have like, you know, a repeat purchase component or something that can be purchased refill supplements, for example, or Subscribe and Save type of products, those will really benefit from the remarketing because you know people are nine times more likely to buy from you if they have purchased from you in the past. That’s just general statistics. So those are those are types are, are really powerful. And also use sponsored display for product targeting, which gives me a really nice placement on the right rail under the buy box. And those ads are still powerful. The only thing you need to be careful about is the bidding setting that you pick, don’t pick optimize for which you should pick optimize for conversions. If you do that, then you won’t have the the vCPM type you will get the CPC type of you know, ad which means only if someone clicks on it. Would you get charged you know, so those are safe. You know, there’s still opportunity with positive pics that it’s not the vCPM that’s that’s the evil one.

Josh Hadley 41:37

Yeah. And that’s that’s a great summary. Yeah, so don’t don’t get me wrong. Sponsored display is not completely out of the question. It’s the different types of ads that you can generate, right? So remarketing, obviously, to an abandoned cart, shopper that’s extremely low down the funnel, great opportunity, you know remarketing to somebody that’s already purchased your product for repeat purchase. Another great strategy. It’s, it’s when you consider using sponsored display higher up the funnel that you need to be aware. And those you know, selecting whether it be reach or conversions, makes a big difference. So I think that is fantastic information. For our listeners. Now Ritu, I know we’re kind of running up on time. But there’s an important thing that I think we need to share with our listeners. And that is the importance of doing a regular audit. That’s something that you’ve been preaching from stages, it’s something that you’ve built a 100 point checklist for so why don’t you tell our listeners specially established brands? Like why is it so important for them to do regular audits on their account? And what do you mean by doing an audit?

Ritu Java 42:47

Right? Yeah, so you know, you know, we audit so many accounts, you know, even established ones. And we always find, you know, areas of improvement, like we always think, Gosh, I wonder why they’re not doing this or that or what made them skip this step or that step. So it’s the question that we’ve always kind of wondered. And so we just started writing down, you know, all the different things we look out for like, what what is it that we look out for in an account to see if it’s healthy or not? So we basically came up with this checklist that has been growing and growing. So by the time you hear this, maybe it’s 120 points? I don’t know. But, but generally speaking, the checklist looks at the health of an account from different perspective. So for example, the first thing we look at is, what is the account level performance? Right? So that just the top level metrics and are looking for any kind of red flags on the numbers that we see there? Then we look at the brand performance, we look for things like is this brand looking out for itself? Is it doing enough? defends our offense and conquesting? You know, is there a new brand is there like strategies in place for new brand acquisition or not? Then we look at campaign structure. How healthy are the campaigns are they set up for success or failure? To give you an example, recently, we on boarded a client that had 20 ad groups within a single campaign, which is a formula for disaster, a recipe for disaster because you know you can do anything with that campaign. The moment we increase the budget, even slightly on those campaigns. It went from from being a very good a cause to a very badly cause, like overnight almost, because all these are groups that behave that behaved roguishly in The past had been suppressed because of the budget gap. And these are groups only came alive because Amazon is like, okay, my budget has improved or increased at the campaign level. So we’ve got to start firing these other ad groups up. And that’s how, you know, overnight, that campaign just got destroyed. Like we had to kind of bring it back and say, okay, okay, stopped off. So, because budgets are set at the campaign level, you don’t want to have that many ad groups, it just creates confusion. So anyway, we look for that and a bunch of other things. With campaign structure, we look at campaign health, which basically means that, you know, we’ll we’ll basically look at how many keywords have sales, how many keywords that have clicks, and no sales, what’s the wasted ad spend, what is the number of Louis calls, campaigns that are being kept on budget, etc, etc. So we’ll do a bunch of those thoughts, checks. And then we look at ad type coverage. So I’ll type selection and performance. I have, though many good examples of people not even looking at sponsored brand ads, not even testing sponsored video, and sponsored display, of course, out of question, because it’s too complex for people that don’t even know that. So everybody’s focusing on the crowded pond sponsored product, keyword based ads, that’s all they’re focused on. Because they’re thinking I want to rank I want to rank I want to rank, and they’re going after the most expensive ad type that’s out there, right? The CPC is on those are the highest. So nobody’s looking at low hanging fruit or, you know, balancing things out. So yeah, that’s another thing we look for. We look for competitor tracking and targeting, are they doing a good job of harvesting competitors that are already leading sales in your direction? One way or the other? Amazon is finding us and showing our products? And, you know, to these, on these pages, and people are coming in? are we capturing that information? And using that as data? Are we looking at important tools that Amazon is providing so much data with? That can be useful harvesting competitor information? And then we look at keyword performance keyword performances, obviously, you know, so many things to check with keywords? Are they following a strategy for ranking or not? Are they looking at goal keywords, ranking keywords and related keywords separately or not because we have a in house methodology for ranking very sustainably and profitably. And we’ve seen some really good success with that topic for another day. But pretty pretty involved system for keyword ranking. SKU based performance, people don’t look at the SKU, how each SKU is performing from the outside. Why? Because, you know, Amazon does not give us data on a SKU level. But, you know, our software helps us to do that. So we get reporting on a school by school basis. So looking at skill performance, you know, are there any low hanging fruits, even within your your skills, that you might be getting a really good a course on, but you’re not advertising enough, things like that. So just a different slice of the same data. And then finally, we look at retail readiness. So that’s our ninth point. I mean, I wish I could share my screen and show you everything, but it’s a lot. Maybe briefly, I can just give you a glimpse of our, our spreadsheet here. So, you know, viewers on YouTube can take a look. So this is what our checklist looks like. So we start with BBC performance, brand performance, campaign structure, campaign health, our ad types, election performance, competitor tracking keyword performance, skew performance, retail readiness. So this is basically our, our checklist. And I know that you know, you can pause and view it at leisure, but we use this to not only look for opportunities with our existing clients, but then we also kind of use this from time to time on our, you know, on clients that have been around for a while and see how we can find any, you know, opportunities, but they’re always hiding somewhere like you just have to go find them. Right. So yeah, I think that that was the thing that I thought might be useful for people, just making sure that the account is healthy and stays healthy.

Josh Hadley 49:33

I love that. Now Ritu, I’m curious, you know, what is your recommendation? Let’s say somebody is doing PPC by themselves, right? Or they have an in house at their business. Would you encourage them to kind of follow through this checklist that you you went over in terms of an audit, or are you actually recommending that people reach out to agencies and experts like yourself to say hey, Would you mind conducting an audit on my account? And tell me what I’m overlooking, right? Because I think that, you know, a third set of eyes and other third parties opinion, can actually be very revealing and eye opening at times. So what’s your perspective?

Ritu Java 50:16

I agree. So I think most agencies will do a light audit that is fairly automated, like you just provide a few reports and they can give you an audit that is, you know, quite quick to carry out now this audit that I showed you is a pretty intense one. And if it’s gonna take a long time, right, and it’s probably best to do this kind of odd audit, when when either you have an in house team, or you’re really serious about going ahead with an agent, because it is pretty time consuming to do all these checks. But you know, light audits, anything that can reveal issues, problems, opportunities, definitely ask an agency to do it for you and see what they say. And we I mean, at PPC Ninja also, we offer free audits. If you are above a certain, I think it’s we need them to be at least 10,000 ad spend in order to qualify for a free audit. But yeah, I would be happy to do it for your audience and take a look at your account and, you know, give you some inputs, maybe one or two of those might be useful right away. Who knows?

Josh Hadley 51:27

Awesome. Well, there you have it for our listeners, if you would like somebody to do maybe not as comprehensive as all of those checklist items. But at least maybe pointing out some options in areas for improvement. In your PPC campaigns reach out to PPC ninja. Now Ritu, as we wrap up here, I love to leave our audience with three actionable takeaways from each episode. Here are the three takeaways that I noted. Let me know if you think I’m missing something. Number one is that sellers and brand owners need to come to Amazon or approach their PPC management with a budget in mind it rather than just you know, kind of picking a number out of the air in terms of hey, my tacos should be 10. Just because I heard about it on some podcast, you provided some very clear metrics and some guidelines for people. So what retool had recommended is take your net profit margin, okay, whether it’s a percentage that you take, or whether it’s, you know, actual numbers, then divide that by half. And that should be your budget. Well, not necessarily your budget, but that’s what you should be aiming towards for your tacos, right. So if you have a, you know, a 15% profit margin or net profit margin, maybe you should be targeting about seven and a half percent for your tacos, is that correct? Three, two.

Ritu Java 52:56

Yeah. And that would be like an eventual goal. And some people in the initial stages of their journey might be willing to take up all of that 15% For just to make their brand take off on Amazon. Yep.

Josh Hadley 53:08

Perfect. Awesome. So that’s number one. If you don’t have those metrics, go get those metrics. And number two, start to use that as a baseline and just start tracking from today. Action Item number two, is to be wary of sponsored display ad campaigns. As Ritu mentioned, it is a very complicated kind of ad set up. But we’re very, we’re all very used to the keyword based sponsored product ads, even headline search ads to an extent in video ads. But when it comes to sponsored display, there are a lot more different settings, there’s a lot of different audiences that you can be targeting here. And so the you know, just be aware before you set things up, that if you’re seeing point 5% 1% Tacos, it’s, it’s seems too good to be true. It’s typically because it always is. And she walked us through the perfect way of how you can discover that. So rewind the podcast, you can definitely you know, hear the details of how you can uncover that. But just an FYI, there, there is a purpose for using sponsored display, just make sure you’re using the correct purposes and that it’s actually serving your needs. So just go into it with your eyes wide open. Now, action item number three is to perform regular audits on your account, don’t become complacent. And I think along with these audits is I would probably add on the fact of like, you should be staying ahead of the curve, and consuming information from experts such as Ritu, another PPC experts that are in the know of the latest things that Amazon is releasing and staying up to date with those things because it’s easy to kind of take a step back and PPC can be overwhelming and too much to do in one day. But it’s always important to take that first mover advantage. do regular audits so that you can clean up air Is of improvement. So, Ritu, is there anything you think that I’m missing that we should relate to the audience here?

Ritu Java 55:06

Oh, that was a great summary. Thank you.

Josh Hadley 55:08

Awesome. Alright, Ritu, as we wrap up today, I like to ask the final three questions that I ask every guest. So the first question is what has been the most influential book that you’ve read and why?

Ritu Java 55:20

The Goal by Eli Goldratt. I read it way back in the 90s. And I reread it this year as part of my New Years, kind of goal setting exercise. And the reason why I love The Goal is because it helped me understand bottlenecks. And those are everywhere. Like, if you want to do anything efficiently, you need to understand how bottlenecks work and how you can ease the flow of work through different bottlenecks and make sure that you get to the result profitably, and in a timely manner. I really love that book.

Josh Hadley 55:59

Yeah, a quick shout out on that book. That’s one that I read when I was in college. And it actually is a very good book, I think at the time I was reading it as like, this is just assigned reading. Now, as a business owner, if you are sitting in that CEO visionary seat, that book, The Goal, is super, super important. Because your job if you want to scale your team and grow your organization, all it is is a matter of identifying the bottlenecks in your business. And as soon as you relieve one bottleneck, there’s going to be another bottleneck, and then there’s going to be another bottleneck. So the book is a very good way of like how to methodically approach those situations, things to consider. So I definitely highly recommend anybody that again, is in that leadership role, and you’re trying to scale your team, I definitely recommend that book. Ritu, next question here is, what is a new productivity tool or software that you’ve recently discovered that you think is going to be a game changer?

Ritu Java 57:03

ChatGPT. You know, it’s my buddy now, like I have signed up for the paid version, because I can’t I don’t have the patience to wait. When other people are using it. I’ve just signed up for it. And I use it so often, just to be an financers, to all kinds of questions that helps me be more productive. It helps me take an idea and bring it to the next step. So I think ChatGPT is the game changer.

Josh Hadley 57:35

I agree. And I think I’ve asked that question. And I’ve received that response every time. And if, if I were to answer that question, I would respond with ChatGPT as well, I think I need to refine my question. And so I’m gonna put you on the spot. Sure. What is your favorite prompt that you’ve given to ChatGPT?

Ritu Java 57:54

Yeah. So I think my favorite prompt is when I ask ChatGPT to create a Google Sheets formula, because that’s my second favorite tool, right? So Google Sheets, I use it all the time for all kinds of like mini tools, micro tools, and charge up, it helps me do my work in Google Sheets much faster, because I, I know formula, but I don’t remember that. Like if someone says, you know, how, how do I extract, you know, this word from another column, I’ll just tell tragedy. So I’ll say my column A has this column B has this and I want this in column C, give me the formula. So in no time I have the formula. I don’t need to research I don’t need to do anything else. The store is a

Josh Hadley 58:36

I love that. That is a great recommendation. Love that. So now I’ve effectively changed this on the spot. You are the first, Ritu, you can always remember that the first GPT specific prompt question. All right, last question, Ritu. Who is somebody that you were admire or respect the most in the e-commerce space that other people should be following? And why?

Ritu Java 58:59

Kevin King? So I met Kevin, seven years ago, or six years ago, I can’t remember in Hong Kong at the Global Sources Summit, and he just blew my mind because he came up with so many hacks that you know, Midler, who was the coordinator at the time, was having a tough time, you know, containing Kevin’s, you know, session which was just exploding and people just kept wanting him to go on and on and on. And he introduced us to so many new concepts, so many new ideas about sourcing, about AB testing, about PPC, about back-end keywords, like just so many ideas and hack them to this day, Kevin is just full of ideas, and I just love listening to him. So I think everybody should follow Kevin King.

Josh Hadley 59:51

Awesome. I’ll echo that as well. Well, Ritu, thank you so much for your valuable time today. If people want to learn more about you, you’ve got many different masterminds. You’re you were generous to offer a free audit to our listeners, where should people go to take advantage of the these offers and learn more about you and follow you in your journey?

Ritu Java 1:00:13

Yeah, so you can just reach out to me, my email is Ritu@PPCNinja.com. Just send me a message and we’ll take the conversation from there. You can also follow me on LinkedIn, I post a lot of content there. So it’s my full name, Ritu Java. And yeah, I think you’ll find me around. So just reach out and I’ll be happy to help and engage.

Josh Hadley 1:00:38

Awesome. Well, Ritu, thanks again for your time and for sharing your wisdom with us.

Ritu Java 1:00:44

Absolutely. Thank you so much for having me. Amazing. Thank you.

Outro 1:00:49

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