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What Target ACOS Should I set?
You have connected your account to Perpetua and now you're ready to set your target ACoS. The key question: What should it be?
We strongly recommended that your initial target ACoS be set as close to your historical ACoS as possible prior to transitioning to Perpetua. Below is a briefing of what could happen to your campaign depending on the initial target ACoS that you set.
Additionally, for new campaigns with limited historical data, the ad engine may adopt a conservative approach, leading to lower bids and slower data collection. To mitigate this, consider starting with a higher Target ACoS to enable experimentation and data gathering.
What Happens When Starting with a Low Target ACOS?
Let's say your historical target ACoS was 35% and you have set your initial target ACoS at 15%. While we understand that you may want to lower your ACoS to 15% eventually, doing so at the outset may lead to a significant drop in spend/sales.
In some cases, bids may drop to the platform minimum (e.g., $0.02), making them uncompetitive and further reducing spend and sales.
💡 By setting your ACoS much lower than historical, you'll effectively be dropping bids on all of your targets.
If the bids are dropped below what's competitive, you won't see conversions and bids could be dropped even further until spend slows. A low target ACoS (that's unrealistic or not competitive enough for the space) will prevent the ad engine from exploring higher bids and getting conversion data.
For example, if bids are reduced to the platform minimum, they may no longer be competitive, resulting in a lack of visibility and conversions.
Conversely, initiating the target ACoS at historical levels will allow the ad engine to learn from the volume of conversion data. Over time, you can start slowly lowering your target ACoS to get to where you want to be.
For new campaigns, it is recommended to start with a Target ACoS in the range of 50–70% to allow the ad engine to gather sufficient data and optimize effectively.
Starting with a Historic Target ACoS
This is an ideal ACoS rate for Perpetua's engine because of four things:
1️⃣ It eliminates any unnecessary guessing that would otherwise have to be done by the ad engine.
2️⃣ It significantly reduces the risk of bidding less on keywords and ASINs that have performed well in your previous campaigns
3️⃣ When the engine becomes "smarter" and becomes efficient at managing your campaigns, it will enable you to adjust your target ACoS to see what works and what doesn't.
4️⃣Finally, this ensures as smooth as a transition possible from your campaigns to Perpetua-optimized campaigns and sets up a foundation for success.
Strategies for Bid Optimization
Increase Target ACoS Temporarily: For new campaigns, a higher Target ACoS can help the engine learn faster and make more aggressive bids.
Adjust Stream Schedules: If bid reductions occur during certain hours, consider separating stream schedules for specific goals to ensure consistent performance.
Use Fixed Bids: Temporarily apply higher fixed bids on high-priority targets to boost visibility and gather data.