One of the most common challenges in Amazon Ads is watching ACOS rise over time. Campaigns that once delivered strong performance gradually lose efficiency, with advertising costs climbing faster than sales. For advertisers, this signals shrinking margins and declining return on investment.
ACOS does not increase randomly. It typically reflects changes in competition, shifts in keyword performance, evolving shopper behavior, or product positioning. By identifying the underlying cause, advertisers can take corrective action and bring ACOS back under control.
This article explores the seven most common reasons for rising ACOS in Amazon Ads and offers practical fixes, complete with examples and optimization tips.
1. Increased Competition Driving CPC Up
Competition on Amazon Ads intensifies as more sellers and brands bid for the same keywords and placements. When CPC (cost-per-click) rises, ACOS naturally increases unless conversions improve proportionally.
Example scenario
- During Prime Day, multiple brands in the home appliance category compete for vacuum cleaner keywords. CPC doubles compared to the previous month, but conversion rates remain steady. As a result, ACOS jumps by 30%.
Fixes
- Monitor competitive CPC trends during seasonal peaks and adjust expectations.
- Reallocate spend to keywords with sustainable ROI, instead of overspending on highly competitive terms.
- Use Placement Reports to identify whether Top of Search or Product Page placements are worth the cost.
- Test long-tail keywords with lower competition to balance portfolio spend.
2. Keyword Saturation and Fatigue
Even strong keywords can lose efficiency over time. Once the same audience has been reached repeatedly, engagement drops, lowering CTR and conversion rate.
Example scenario
A brand selling protein powders relies heavily on the keyword whey protein. Initially ACOS is strong, but after six months, shoppers show less interest as competitors increase visibility with fresh creative and variations like vegan protein powder.
Fixes
- Refresh keyword lists every quarter.
- Expand to long-tail variations to capture new demand.
- Regularly analyze the Search Term Report for emerging terms.
- Rotate ad creatives (new Sponsored Brands headlines, updated images) to maintain relevance.
3. Decline in Conversion Rate (CVR)
Even with stable CPC, ACOS rises if conversion rates drop. Poor CVR can be driven by weak product detail pages, stronger competitor listings, or misaligned pricing.
Example scenario
A household cleaning product had a 20% CVR when it launched, but after new competitors entered the market with better A+ Content and lower prices, CVR dropped to 10%. ACOS doubled despite steady click volume.
Fixes
- Update product detail pages regularly: new images, videos, and improved bullet points.
- Monitor competitor pricing and adjust positioning.
- Build review volume: campaigns supported by higher ratings and >50 reviews generally convert better.
- Use A/B testing tools (Manage Your Experiments) to optimize titles and images.
4. Budget Draining on Low-Performing Keywords
Campaigns often continue funding keywords that no longer deliver sales. Without intervention, these terms consume budget, inflate ACOS, and reduce efficiency.
Example scenario
A brand continues bidding on wireless headphones even though recent reports show high CPCs and no sales. The keyword absorbs 25% of budget each week, driving overall ACOS up.
Fixes
- Review Search Term Reports weekly to identify unprofitable terms.
- Pause or reduce bids on consistently high-ACOS keywords.
- Reallocate spend to proven keywords or new opportunities.
- Apply negative keywords to block irrelevant traffic.
5. Poor Campaign Segmentation
When branded and generic keywords are mixed in the same campaign, performance becomes unclear. Branded terms usually deliver lower ACOS, while generic terms drive new-to-brand sales but at higher cost. Combined reporting makes optimization difficult.
Example scenario
A brand runs a single campaign mixing BrandName shoes and running shoes. The branded terms skew results positively, masking the fact that generic terms are running at 40% ACOS.
Fixes
- Create separate campaigns for branded vs. generic keywords.
- Track new-to-brand sales vs. returning customers.
- Allocate budget differently across funnel stages (awareness vs. conversion).
- Use portfolios to manage spend distribution.
6. Seasonality and Shifts in Demand
Shopper demand changes throughout the year. Off-peak seasons often reduce sales volume, making ACOS rise even without changes to CPC or targeting.
Example scenario
A sunscreen brand runs campaigns in September with the same budget as in July. Click volume remains steady, but conversions drop by 40% as seasonal demand falls. ACOS doubles.
Fixes
- Plan campaigns according to seasonal cycles.
- Scale budgets down in low-demand months while maintaining presence with branded keywords.
- Increase spend strategically in peak periods when conversion rates are highest.
- Compare historical data year-over-year to anticipate shifts.
7. Lack of Continuous Optimization
Amazon Ads campaigns require ongoing adjustments. When campaigns remain static, inefficiencies accumulate and ACOS rises gradually.
Example scenario
A consumer electronics brand launches campaigns in January and makes no adjustments for three months. Over time, CPC increases, competitors improve listings, and ACOS drifts upward by 25%.
Fixes
- Review campaigns weekly or bi-weekly.
- Adjust bids, targeting, and budgets incrementally instead of large changes.
- Leverage automation tools like Pacvue or Sellics for continuous bid optimization.
- Set alerts for spikes in ACOS to catch issues early.
Practical Checklist
- ✅ Monitor CPC trends and reallocate spend.
- ✅ Refresh keyword lists to avoid saturation.
- ✅ Keep product detail pages updated and competitive.
- ✅ Pause or reduce bids on unprofitable keywords.
- ✅ Separate branded vs. generic campaigns.
- ✅ Anticipate seasonal demand shifts.
- ✅ Apply weekly optimizations.
Tools and Resources
- Amazon Ads Search Term Report – uncover keyword performance.
- Amazon Ads Placement Report – evaluate ROI by ad placement.
- Amazon Ads Budget Report – monitor pacing and overspending.
- Helium 10 / JungleScout – keyword discovery and tracking.
- Pacvue / Sellics – automation and bid management.
- Amazon Ads Academy – courses and certifications.
Conclusion
When ACOS rises in Amazon Ads, it signals a shift in campaign dynamics: higher competition, weaker keywords, falling conversion rates, or seasonal changes. These challenges are manageable with consistent monitoring and strategic adjustments.
By addressing the seven main causes — competition, keyword fatigue, declining CVR, wasted budget, poor segmentation, seasonality, and lack of optimization — advertisers can stabilize ACOS, protect margins, and maintain profitable campaigns over time.
👉 Next in the series: Hidden Costs in Amazon Advertising: What’s Eating Your Margins?
Senior E-commerce & Retail Media Leader with 8+ years across Amazon and leading marketplaces. Focus on full-funnel strategy, programmatic retail media, and international media governance. Sharing frameworks and operating models for growth.
