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What Does the Cannibalization of Organic Sales Mean?
If a high percentage of your sales are attributed (i.e. they come from your ads), continue to climb over time, and remain high, this could be an indication that a) you are heavily reliant on ads, and b) your attributed sales might be eating into your organic sales.
There are a few steps to identify and revert this trend...
Identify Through Search Insights
Optimize ad placements to target specific customer touchpoints or areas where organic listings might be weaker, rather than duplicating efforts where organic visibility is already strong.
Review TOS Share of Voice (SOV) and Organic Share of Voice via Search Insights on your top terms. If you have a strong organic rank and high TOS SOV, then consider lowering bids for those organically well-ranked targets.
- Search Insights
Budget Allocation: Allocate ad budgets strategically, focusing more on products that need visibility support and less on those already performing well organically to prevent unnecessary competition.
Review ASINs with high organic rank and invest more aggressively on the ASINs that are low on organic rank.
Revert Through Organic Rank Optimizer (via Custom Goal)
Leverage the Organic Rank Optimization tool (Beta) through Custom Goals to reduce organic cannibalization. By utilizing this tool, you can strategically manage your ad spend based on the target’s organic rank. The organic rank threshold and bid rules are set by the user.
Here's how it works:
1. Optimized Ad Spend: When a product + target’s organic rank is performing well, the tool will lower bids. This strategy prevents excessive advertising for a product that's already gaining traction organically. As a result, you avoid saturating the market and potentially competing against your own organic listings.
2. Dynamic Bidding: Conversely, if the organic rank of a product starts to drop, the tool automatically increases bids again (based on the user-set threshold). This proactive adjustment helps regain visibility and traction through advertising, compensating for any decline in organic rankings.
Overall, this strategy helps in maintaining a balanced approach to advertising, preventing excessive ad spend on products and targets already performing well organically while strategically boosting visibility for products experiencing a decline in organic rankings. As a result, it minimizes the risk of cannibalizing your own organic traffic on Amazon.
🚨Note: This information pertains specifically to the cannibalization of sales related to unbranded terms. For guidance on branded term cannibalization, please refer to the following article [Link].🚨
Article last updated December 2023. If you find this information to be out of date, please contact hello@perpetua.io.