A Campaigns page littered with red warning signs can be alarming, but never fear! Once you understand them, and know how to address them, you’ll be one step closer to more efficient advertising campaigns.
What does the column mean?
The Pre-Ad Product GM% Range column on the Campaigns page shows the margin range of products within the campaign, before accounting for ad spend. To learn more about what goes into the gross margin calculation, click here.
Knowing the margin range is important for analyzing performance and changing/setting MACS, so this is why the data is included on this page.
***For data to populate in this column, you’ll need to connect MWS and input COGS, since order and cost data are required to calculate margins.
Why is there a warning sign?
Flywheel will highlight in red any instances where the range of product margins is greater than 10 points. In these cases, you run the risk of advertising products in an unprofitable way.
It makes more sense if we think about the tool that controls ad spend -- MACS. Since this setting is adjusted at the campaign level, all products in the campaign are affected. As a result, products with vastly different margins won’t be impacted in the same way.
Consider this example:
You’ve set a MACS of 40% for a campaign, but you see that the gross margin range for products in the campaign is 20-50%. The bidding system is placing higher bids according to the 40% MACS, and so the products with a 20% margin will likely see fewer profitable sales.
Pause ads for outlying products, and create new campaigns when applicable
Dive into the offending campaign by clicking "View Campaign Details" and navigate to the "Products" tab
Review the the est. pre-ad gross margin column to see what products are responsible for the margin alert and check the status of the ad as well
Hop into Seller Central, pause the ads for these outlying products
If you’d still like to advertise these products, set up a new campaign(s). Be sure to follow our best practices when creating campaigns.
For campaigns with many ad groups and/or products, consider downloading a Bulk File from Bulk operations in Seller Central. As long as you’re comfortable using spreadsheets, this will allow you to more easily pinpoint products outside the desired margin range.
Consider increasing prices for products on the lower end of your gross margin range. Higher prices mean you’re taking home more per sale, thus expanding the margin for the product.
If the offending product(s) exist in more than 2 mirrored campaigns, pause the ads wherever else they exist. Use the Associated Campaigns column on the Product Metrics page to pinpoint unnecessary campaigns. This will also increase the margin, because you won’t be spending as much money on advertising.