Why we cut a skincare brand’s Amazon ad spend from 24% to 8.5%, and revenue still grew

The headline number on this site is that a US skincare brand we operate finished 2025 with Amazon advertising at 8.5% of revenue, down from roughly 24% in the years before, with revenue for the year at $227,787 and net margin at 60.87%. People assume that means we slashed the budget. We did not. We changed what the budget was allowed to do.

What was actually running

A structure most beauty accounts recognise: auto campaigns from launch that had never been retired, broad-match campaigns on category terms, a brand-defence campaign bidding aggressively on the brand’s own name, and sponsored display running on placements nobody had reviewed in a year. Total spend tracked revenue almost perfectly, which is the tell. The ads were not driving sales; they were following them.

Change one: a target per product, not a budget per account

We set a maximum advertising cost of sales for each hero product based on its actual contribution margin after fees. Campaigns that could not meet it were paused or restructured. This alone removed about a third of the spend, almost all of it on category terms where the brand was paying to appear next to cheaper competitors and losing the click anyway.

Change two: retire discovery campaigns that had finished discovering

Auto and broad campaigns had generated the search-term data years ago. The converting terms were long since harvested into exact-match campaigns. The originals were still spending. We negated the non-converting terms and cut the budgets to a small ongoing research allocation.

Change three: stop overpaying for people who were already buying

Branded search was bid as if it were contested. It was not. Reducing brand bids to the level that still held the top placement recovered spend that had been going to Amazon for customers who typed the brand name in on purpose.

What we deliberately did not touch

The hero product’s exact-match campaigns on its two best converting terms kept their budgets and their bids. Cutting winners to hit a spend target is how brands lose ranking and then spend more to get it back. And we did not cut advertising during the two seasonal peaks, because the margin sheet showed those weeks paid for themselves even at the old ratio.

Why revenue went up anyway

Three reasons, in our reading. Ranking on the hero product held because its winning campaigns were protected. Listing conversion improved in the same period from image and copy work, so organic traffic converted better. And the money no longer wasted on category terms funded a subscription push on Shopify that lifted repeat purchase. Advertising did not stop working. It stopped being the only thing working.

This is the audit we run on every beauty account before anything else. Most of the time, the spend is not too high. It is just pointed at the wrong things.

Filed under Amazon