Don't Use Amazon Negative Keywords: Reduce Loss in Sales

Negative keywords on Amazon are specific terms or phrases that advertisers can exclude from their campaigns to ensure their ads reach the right audience. But what if we told you that using negative keywords in PPC campaigns could actually be costing you sales in the long run?

We recently conducted 2 case studies across all m19’ accounts to explore the long-term impact of negative keywords in Amazon PPC campaigns, and the results were nothing short of surprising. What we discovered challenges conventional ideas: while it might seem logical to negate low-performing search terms, doing so could mean missing out on valuable boost for ad sales and conversions over time.

Instead of simply cutting ads costs, m19 is dedicated to enhancing efficiency and driving growth. In this article, we’ll dive into why you should not use negative keywords in your automated campaigns.

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Here is a quick peek into the article:

1. What are negative keywords on Amazon?
2. Limitations of negating low-performing keywords
3. Case study 1 & 2
4. When do you use negative keywords?
5. The final: Embrace the potential

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What are Negative Keywords on Amazon?

Negative keywords on Amazon are specific terms or phrases for which you do not want your ads to appear.
Amazon Negative keywords are used to prevent your ads from showing when users search for certain keywords or phrases. This helps avoid wasting money by preventing your ads from appearing in places where they might not be relevant or effective. This is a common keyword targeting tactic that Amazon sellers use when they sell on Amazon.

For example, if you're selling furniture, good keywords might include "office furniture," "home decor," or "modern furniture." However, some keywords like "DIY furniture" or "furniture plans" could result in clicks from users looking for tools to make furniture rather than buying ready-made pieces. Adding these words as negative keywords can reduce irrelevant clicks and improve the effectiveness of your ad campaigns.

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Why Low-Performing Terms Shouldn't Be Negated in Automated PPC Campaigns?

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In automated PPC campaigns on Amazon, it is crucial to pay attention to low-performing terms and not simply dismiss them as irrelevant. Here's why:

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Identify Potential Growth Areas

Ignoring low-performing keywords means missing out on the chance to uncover potential growth areas. These keywords might not currently generate significant traffic, but with strategic optimization and targeting, they could become valuable assets in the future.

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Evolve Search Trends

Search trends can shift due to changes in consumer behavior, seasonal fluctuations, or external influences. A keyword that seems ineffective today might gain relevance in the future as trends evolve. it is crucial to keep an eye on these terms for potential future value.

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Uncover Consumer Intent

Over time, new users with varied search intents or at different stages of their buying journey may come across your ads. These users might engage with previously low-performing keywords in ways that current audiences do not, potentially leading to valuable conversions and insights.

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So here we provide 2 case studies for you to understand deeply why we don’t negate keywords while doing automated Amazon PPC campaigns.

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Case study 1 

Every click and keyword could mean the difference between skyrocketing sales and a missed opportunity. Many sellers tend to neglect low-performing keywords because they don't generate enough sales while consuming a portion of the ad spend. 

The team, like many others, believed that removing these low-performing keywords would save money and boost overall efficiency. After all, why keep something that isn’t driving immediate sales, right? However, this approach often overlooks the potential value these keywords might bring over time.

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Implementation

We tried to explore the impact of neglecting low-performing keywords in Amazon PPC campaigns. By tracking these keywords over a nine-month period, we discovered how removing them could result in significant missed opportunities and losses in sales.

We conducted a nine-month experiment for a brand that mirrored a real-life PPC campaign. Every 15 days, we carefully remove the low-performing keywords in the bidding process, just as many sellers do. We wanted to see what would happen if these “bad traffic” search terms were negated from the very start.

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Results

As time passed, the results of our experiment began to unfold. The orange line on our graph—representing sales attributed to the negated keywords—started to tell a very different story.

Instead of saving money and boosting efficiency, negating these low-performing keywords led to a substantial loss in sales. Over a 285-day period, we found that this decision has cost the brand significantly—the loss in sales amounts to almost half of the revenue! The keywords you dismissed as underperforming were, in fact, more valuable than they appeared.

Despite an impressive Advertising Cost of Sales (ACOS) of just 17%, the overall sales performance suffered greatly. Don’t be too quick to dismiss what might seem like “bad traffic.” The potential long-term value that these keywords can offer was clearly shown in this case, even if they don’t show immediate results.

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At m19, we believe that even “Low-performing players” can be optimized for future success, rather than simply negated.

To further prove this, we continue to do another test for all the accounts connected to m19.

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Case study 2 

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Background Information

"Wasted ad spend" refers to ad spend on search terms that result in no sales. For example, if an ASIN spends money on search terms but generates no revenue, that spend is considered wasted. Traditionally, Amazon sellers might negate these terms to avoid further waste and increase advertising ROI.

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Implementation

For each account, we separated the "wasted ad spend" and compared what would happen if we optimized that traffic instead of cutting it out. We tracked the total spending and sales every 30 days and evaluated how it affected the overall ACOS.

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Results

We analyzed what would happen if we negated this so-called wasted ad spend. The results were interesting: sales dropped 35% over one year. Picture that—one-third of your potential revenue simply vanished. 

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Here are three examples from our accounts.

ASIN A:

• A Significant wasted ad spend was noticed in the initial period.
• Eliminating the search term would have resulted in missing €13,500 in sponsored sales over the next 90 days, with a 26% ACOS.

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ASIN B:

• Low performing keywords (Negative Keywords) observed in a later period (period 3), so we negated it to try to reduce wasted ad spend.
• But in the end, it would have led to missing €5,544 in the next 90 days, with a 9% ACOS.

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ASIN C:

• Missing €7,243 in sales over the next 90 days, with an 11% ACOS.

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Even more surprising, the ACOS was nearly identical to what it could have been if we had chosen to optimize the traffic rather than dismiss it in the long term.

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We saw that with m19 tool’s management, the ACOS began to stabilize. After just 60 days, it had already closed much of the gap, and after 150 days, it was nearly aligned with the overall account ACOS. The gap between the ACOS for low-performing keywords (Negative Keywords)—those associated with higher wasted ad spend and the account's overall ACOS becomes smaller and smaller.

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(Size groups: We categorized accounts based on their average monthly ad spend, ranging from micro accounts with less than €2,000 per month to extra large accounts spending over €50,000 monthly. )

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When do you Use Amazon Negative Keywords?

A helpful reminder: With the m19 AI tool, you can effortlessly optimize ad spend and ACOS, as demonstrated in the two case studies. However, if you're managing your Amazon PPC campaigns manually, we recommend negating those poorly performing keywords to ensure your budget is used more effectively.

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If you want to know about how to add or remove negative keywords on Amazon, please review our negative keywords guide for beginners.

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The Final: Embrace the Potential in Negative Keywords

The message is clear: Our recent case studies demonstrate how even low-performing keywords can be optimized to unlock their true potential. Instead of negating numerous keywords manually, here in m19, sometimes less really is more, our AI optimizes even low-performing keywords and facilitates the legwork of manual management. Our algorithms explore the most profitable keywords and set up optimal bids to maximize ad performance when sold on Amazon. 

The key features that make m19 so effective are its:

• Amazon PPC automation: Automate bidding so your ads remain competitive in the auction, in turn maximizing your ad visibility and click-through rates.
• Keyword tracking: Monitor and analyze the performance of your bidding keywords to adjust strategies accordingly.‍
• In-depth reporting: Generate comprehensive reports that provide insights about product groups and ads performance to make informed business decisions.

We’re proud of this approach because it not only simplifies the management of your PPC campaigns but also showcases a significant achievement. We always want to bring you innovative solutions for Amazon PPC ads. Start a free trial to stay updated with the latest advancements and insights that can transform your advertising strategy.