Managing Amazon Ads in Tough Times to Protect Your Organic Sales

Managing Amazon Ads in Tough Times to Protect Your Organic Sales Michael Erickson Facchin: What's going on, Badger Nation? Welcome to The PPC Den podcast, the world's first and longest-running show all about how to make your Amazon advertising life a little bit easier and a little bit more profitable. Today on the show, we have Michael Tejeda, who I have worked with here at AdBadger for five years. He's one of the most grounded Amazon PPC Managers I know, which is why he has such success working with his customers. We're going to be talking about what it means to cut budget on Amazon Advertising or to lean into your budget on Amazon Advertising and how that can influence your total A-costs, advertising sales, organic sales, and overall profitability. Let's jump in. And really, I think the best question to ever ask on the show from anyone who works with lots of people in their Amazon advertising. If you think back to the last few conversations you've had with clients, what kinds of things got brought up? What were they worried about? And how did that conversation go? Michael Tejeda: Yeah, so there's actually with the tariffs going on, there's a ton of that. So everything always goes back to always, always, always tacos, right? Because we want that nice mix of organic and ad sales to support it. A lot of my conversations lately have been around how do we maximize our budget and really how can we, is there any budget that we can cut back on? Really now is not the time to cut back. I know that there's a lot of people that want to cut back just because there's other places they want to put that money, but really pulling back on ads is, it's not the time for that. So really with all of that, a lot of the conversation has been driven around I know we've talked about it in the past, but there's kind of like keywords and grouping keywords and grouping keywords into routes. So for example, if I have one client that sells a particular item and one of the variations is based on numbers or viewable numbers as a gauge on that, so that's one route is numbers and breaking them out into other routes like that as well too. That is one thing that keeps coming up because it is showing success and that's something big. Michael Erickson Facchin: So I want to pull on that thread a little bit in terms of the roots and how it connects to everyone's biggest concern. And I would say that is a big concern. But I've heard from a lot of people, which is just like feeling a budget crunch either here already or coming already. And not only do you sort of have these tariffs, but you also sort of have an uncertainty about what exactly the tariff will be. And in addition, I think 2025 has seen some like consumer spending softening in general. So you get it from sort of both sides. And making the most of your budget is always a goal, right? And when things are going fantastic, the conversation is generally like, where's my next area of domination? And then when things are potentially a little bit softer, it's like, can I cut back anywhere? Like, where should I cut back? What does that conversation look like? And I know that you mentioned in your answer just now that like, it's not the time to cut back. Could you explain what you mean by that? Michael Tejeda: Yeah, if we have a nice bit of organic ranking, and we're kind of usually support that a lot of the times by what's happening with ad spend, just making sure that we're keeping that, keeping ourselves relevant, making sure that the impressions are keeping the PSR and all that sort of is, you know, a portion of organic, but then also ad sales, too. If we pull off the gas now and we start to lose ranking there, really, how's that going to affect everything? Because if we start to lose those positions or we're not as high up on the page and we have less sales and then we have consumer confidence is kind of shot to as well. So then there's less sales altogether there. We were kind of. I guess fighting for fewer sales now. So that's something that we don't want to really get involved in is losing our ranking as well. Michael Erickson Facchin: Fantastic point. You know, today, even in 2025, I talk to about 80 people a month of various levels of experience and different stages of the game on Amazon. And even today in 2025, I still talk to people who aren't fully familiar with the PPC and organic You know, they do open themselves up to a potential negative spiral. And in case, you know, there are members of that audience on listening to the show right now, just break it down. Like, what do they need to know about the relationship between PPC and organic? And how could this sort of potential unintended consequences of like, hey, let's scale back, lead to actually this negative spiral? Like, can you can you break that down for anyone who's not familiar? Michael Tejeda: Yeah. So everything on Amazon is based on, I mean, there's tons of things that go into the algorithm and, you know, only the scientists know exactly what comprises that algorithm, but you know, there's, there's our best guests that we do have. So we do know that part of it is Amazon ad sales, that it's helping support visibility, which is helping support where you're at on the page, which is helping just overall visibility for your product. If your product's not visible. It's obviously not going to be clicked. So we're helping to do that artificially with the ads. But then once we do have that sell through on those particular ads or further down in the places that are not ad related sales units, then you can purchase on those too. So those are the organic ratings. So if we have organic and ad sales, that helps with our sales velocity. So the more sales velocity that we have, the higher click through rates that we have, the more sales we have, the more Amazon loves you. So of course, Amazon wants to sell just like you want to sell. So they're going to prop up the best items and hopefully you'll get the better ranking and get a badge. And once you have a badge, then You're very golden. Michael Erickson Facchin: You can create your own tailwind on Amazon. You can create your own positive momentum on Amazon by pushing it with ads. So to your point, and in case anyone isn't familiar with this, so what happens in a worst case scenario where someone calls you up and they're like, hey, Michael, I need to cut my budget on my PPC by 50% right now. So I'm currently spending $1,000 a day. By the end of the week, I need to be at $500 a day. What goes on in your head when you get that call? Michael Tejeda: What goes on in my head is immediately, okay, well, what items do you want to stop supporting? Because we have to cut something. If we cut everything and we're cutting those hero items that are Essentially going to be pushing the majority of your sales and your revenue, then you're going to be killing your own sales and your own business. Michael Erickson Facchin: Oh, yeah. What would you expect to see in the organic side of that? Oh, you know, like, how about that question? You know, if we did drop ad spend by 50%, what would you anticipate would happen to the organic? Like, what does our timeline look like for the organic? Michael Tejeda: Yeah, so it's actually pretty Pretty quick on what is going to happen. If we're looking at any tool that's going to measure BSR, whether that's Helium 10 or any other Chrome extensions, I mean, there's multiple of those that are out there that can measure that. But we can see those on an hourly basis where they're measuring the BSR. And you can see the impact of that within a few hours. And it's relatively immediately. So if you're talking about cutting it and cutting it 50% in one week, then you're going to see that BSR drop for sure. For those ones that you're not supporting. Michael Erickson Facchin: Is it always a sort of like one to one pairing? So like, let's say you cut your ad spend and your ad sales by half. Would you anticipate And this might be impossible to say, but like, would you expect organic sales to also fall by half? Michael Tejeda: Yeah, that kind of depends on a bunch of other elements of it, right? Like just how well, like, say that your page looks and how good your A plus content is and your images are at actually converting what's actually thrown to the page, the clicks that are thrown to the page. So no, they're not going to all be that one-to-one relationship. And it's weird because I kind of want to talk about the opposite side of that. So that's like kind of the negative of it, right? So if we're pulling out budget and we're pulling that away and we're starting to see that sort of chip away in a road and we're going to see the BSR drop. I had a success story last week where there was a client that said, OK, well, surprisingly enough, they're like in this time, let's spend. I have a bunch of stock. I have stock that's here that's purchased. We're going kind of out of season, so let's press the gas. Let's get as many sales as we possibly can. It was a little bit strange because we extended the budget about two and a half times overall. It was within the matter of essentially like 15 days that we really pushed on the gas. There was a meeting and a conversation that happened and then the budgets were discussed. Immediately after that, they're like, yeah, let's go for it because we presented some good data. And then right after that, they're like, how quickly can we do it? And immediately we just stepped on the gas and got it going. So the funny thing about that whole situation is, yeah, we spent a ton more. We had a bunch more impressions. We had a bunch more sales, but we did see the ACoS click up. And I know that there's this conversation of like, OK, well, there's a lot of clients and a lot of people that are out there that are very ACoS sensitive, right? We were just having that conversation about bringing the tacos conversation into it. Then also we need to talk about profitability too. So with the ACOS, one of the things that happened was that rose, that rose three points. But on the taco side of it, we dropped two and a half points. So that was a good relationship to see because we can see, and I was looking at the day-to-day data, some of those organic sales days, they were looking fantastic and we had a ton of organic sales. Michael Erickson Facchin: So it's within that like two, two, three week timeframe. Michael Tejeda: Yeah. Yeah, exactly. And it's not that one-to-one relationship back to that question. So back on the negative side or even on the positive side, not a one-to-one relationship. Michael Erickson Facchin: Yeah. And I would say the way that I've always thought about reasons why it's not a one-to-one relationship, because the difference in sales that you get in position one versus position 5 versus position 15 is stark. If you fall down from position 2 to 10 to 20, it's basically like you've fallen off a cliff. And vice versa, if you've jumped from 10 to 2, That is like being teleported to a higher dimension, right? So that is generally why it doesn't scale perfectly one-to-one. That's always been my conclusion. So that's awesome, man. That's a really cool success story. And I guess the question is, if someone's listening, if someone just heard that, how do they know it's possible to do that? Is there any market consideration? What was the indicator? Because you mentioned you did a little test first to assess it. What did that look like? Could everyone do this? What do you think the factors were that led to the success? Michael Tejeda: Yeah, I think the factors were really being smart with just the keywords that were developed and really having a plan before we actually set things in motion. So part of that was there was probably about a two-week cycle time with the data that we presented because earlier in the conversation, I was telling you about the data that we presented to the client and they actually considered all that data before they actually gave us a green light. Now, with all of that, there was a lot of back-end research on, well, how much can we expand into this marketplace? What position number are we currently at? And we had a strong position. We were currently at, I think it was four. And they had another product that was in the two position. So this this product was a little bit weird because we had some that were vendor central and then some that were on seller central. So it's a little bit weird sort of situation. But then going back to the stock, the stock was trapped in certain locations. So with that, we did see that there was more availability in the market share. And then we also saw that there was a little bit of soft spot. For the competitors that we're going up against. So there was a little bit of variance in what was happening with the products amongst the best competitors. And we saw that we could chip away and erode some of their sales there. So it's just being smart about the tactics to really attack those. Michael Erickson Facchin: Identifying where, if there was an increase, it would actually be worth it. Like, where can we actually feasibly begin to appear for? Where can we begin to go after and rank for? Where is there the extra opportunity? That's awesome. And I was preparing for a presentation the other day that I was giving And I was like researching like historically what have brands done during times of like potential economic softening. And every single example that you look at is like There are some companies that have the reaction of like, let me scale back. And there's other companies that are like, let me use this as my opportunity to pull ahead. In my own career, I've experienced this in, you know, 2020 when COVID happened. And I think anyone listening to this experienced some of that in 2020, where there was intense, it like happened rapidly. Like intense economic softening, and then Everyone was like slungshot out of a slow time, and then 2020 was a banner year for e-commerce in general. And the ones who leaned into the slowdown that happened at first were the ones that sort of sprung the fastest, right? And Amazon is very inertia-based. So like, even having, you know, if you think back to March 2020, even having a couple weeks lead time on your competition, who's maybe like pulled back a lot, whereas you like leaned into it, identifying like, is there opportunity here? Let's lean into this. And like, there's plenty of stories like that, that like is probably studied at business schools left and right, like Kellogg's versus Post. During the Great Depression, one of them pulled back, one of them leaned into marketing, and the one who leaned into marketing was like, whatever their market share was in the past was many times better afterwards because they leaned into it. And in some ways, it's actually a little cheaper or a little bit more economical to advertise during slow times because other people have pulled back. And maybe there is slightly less demand, but thinking relatively, You know, obviously you cannot create market demand if like nobody wants the thing, but it's more so like, oh, like this is a good opportunity to move from, you know, number seven in my market to number four in my market. How do I get there? So that's his tale as old as time. And you've mentioned something, I think in the first answer that you had, which was looking at root words and finding these sort of keyword clusters Can you talk about that? Can you maybe give us an example of what that analysis looked like? Michael Tejeda: Yeah, so it goes back to sort of the initial analysis that I was talking to that we presented to the client. So finding the soft spots and the soft spots that are going to target the competitors and target those the best. So we did see trends on what keywords were actually being purchased most frequently or they spent the most amount of their PPC budget on. And I noticed that there was certain keywords that we were not targeting as much, but they were within the subcategory. They were very, very high volume keywords and some were mid volume. So that's part of the process too, is like breaking those things out. We want to target high volume, mid volume, and then some low volume too as well. Michael Erickson Facchin: But. Michael Tejeda: That's not how we broke keywords out. We broke them out into clusters of different roots. So one example, like I had given you, this was something that had a measurement on it. And one of the things was, was it easy to see the numbers of that measurement and from a distance? So one of the number, one of the clusters was called numbers. Another cluster was called EasyRead, another cluster was called. And this is an outdoor product as well, too. So since we're going into times that, you know, well, here in the U.S. on the East Coast, we have more freezes. So this had to be something that was freeze-proof as well. So that was another cluster that we were really focusing on. Not relevant during the summer, but something that's going to be relevant a little later. Michael Erickson Facchin: Interesting. And then sort of what do you do when you identify these keyword clusters? Michael Tejeda: Yeah, so it's it's really spin them up. And when we're talking about breaking out of budget, this really helps us with the budget as well, too, because when we have these groupings of keywords that we're putting into clusters, we're going to let the data speak to us and tell us what is going to convert the best. Right. Because I have these different clusters. I am breaking them out into two separate types right now. Currently, Just because of budgetary constraints, I'm not using phrase right now. I'm using exact and I'm using broad modified. So I'm using those two to really push and try to get as many variations of the keywords as possible for the clusters. And what I'm doing is I'm breaking my budget out to more on the exact side of it, but then leaving about 40% of that budget for the broad modified side so I can get a lot of variations of it. So, I'm trying to let the data speak to me right now. I'm actually looking at the page, underneath the page that we're on right now, and I can see that there's one cluster that's just not working well for us. And since I told you it was an outdoor product, mountable is something else that gets done. We can either put it into the ground or we can mount it on something. Amountable are words that are not working very well, so I can see that I can take money out of that portion of the budget, reapply it somewhere else that has some good ROAS, and then, you know, it's kind of off to the races with that budget. Michael Erickson Facchin: So what benefit would you say having keyword clusters Over not having keyword clusters because it sounds like you've separated them by campaign. Is that right? So like you have separate clusters of campaign themes, of keyword themes. What benefit are you seeing over potentially not having them and having them co-mingled? Michael Tejeda: Well, I know that we had talked about in the past, and I know you have several podcasts on this, but budget optimization. So this really adds that additional layer to it. So we have bid optimization, right, that we're doing, we're constantly doing on each one of the campaigns. But since they're broken out into different keyword clusters and also different campaigns, I'm able to do a lot of budget optimization too as well. So within my portfolio, because these are all wrapped up into a separate portfolio, I have about 20-ish or so campaigns that are currently in there right now and I can adjust accordingly. Into where I want that to go specifically for budget. So a lot of budget optimization is being done too. So that's really the main benefit of these clusters. Michael Erickson Facchin: Right. So you mentioned like mountable was one theme that wasn't working. It didn't eat up budget from other themes that are working and you can scale it down and get it to its correct size. That's really great. So, I mean, I think what I love having you on the show is You've been doing this for some time and you always seem very calm about approaching these scenarios. It seems like you always have a plan. Would you say that that's in the day-to-day? Do you feel relatively calm when you're navigating these PPC campaigns? Michael Tejeda: I guess it's one of those things where you have You know, people talk about a duck, right? They're going crazy under the surface. So as long as I can present that, I think that I've seen enough to not get completely jarred by something. Especially with what happened with what you're talking about in 2020. I mean, this is just kind of another iteration of that. There's a lot of changes and things that we're going to need to adapt to, but hey, that's just Amazon. That's Amazon on a day to day. So I think I've seen enough now where I'm not completely shocked. I would say that I haven't seen something that's knocked my socks off for like the last six months or so. And that's, you know, you and I see a lot of stuff come through. Michael Erickson Facchin: We see a lot of stuff. I know that's why when I talk to people and they're like, oh, like, tell me about the team or like, oh, they're telling me about their situation. And my response is like, between everyone here, we've seen a lot. You know, one of the coolest things about this podcast is how it's like helped expand My network, so I get to know a lot of people. So whenever we do need to hire, we can find exceptional people. So yeah, having people that have seen a lot of stuff is really useful. And they stick out to you. And there are some situations that are more rare than others. One thing I always find interesting, I actually love these kinds of situations, like really specific stuff, like a wholesaler who has a skew count of 10,000. It's such a fascinating thing for me to study. So I love all these different intricacies and I'm learning like how they are navigating a situation like this versus someone maybe with like three to five SKUs or someone who's launching a product for the first time or someone who's trying to scale from, you know, $500,000 a year in revenue to a million in revenue versus one to five. So I find all of these different stages and phases and themes. Everything from like clothing is different versus, you know, singular distinct ASINs is different. It's all fascinating. Michael Tejeda: It is. That's the beauty of Amazon, right? Unknown Speaker: Mm-hmm. Michael Erickson Facchin: Keeps you on your toes. Well, Michael, I think we've given people like a lot of a great mix of like tangible tips and also like calm information and practical things to do. I thank you so much for coming back on the show. Michael Tejeda: Thank you for having me. Michael Erickson Facchin: Until next time. Unknown Speaker: And bad mistakes, I've made a few. I've had my share of rocky ones, but I've gone through. We are the PPCs and my friends. And we'll keep on amazing. We are the BBC, and we talk about Amazon. No time for Medicoms, because we fix the game.