Understanding the fundamentals of Amazon PPC (Pay-Per-Click) advertising is essential to boost your product visibility and sales on Amazon. A well-thought-out and implemented PPC strategy can make or break your performance on the platform.
This article focuses on the basics of Amazon PPC, including its various campaign types, keyword targeting strategies, and bid management. Throughout this article, you’ll understand what constitutes a successful Amazon PPC campaign and how to use these tactics to optimize your ad budget and increase product visibility.
As you venture into Amazon PPC, remember that it’s all about testing, optimizing, and refining your strategy. With dedication and attention to detail, you’ll be well-equipped to unlock your products’ full potential on the world’s largest online marketplace.
Understanding Amazon PPC: The Basics
This section will explore the fundamentals of Amazon PPC advertising. You’ll learn about the different ads available on Amazon, how the auction works, and eligibility to use sponsored ads.
What is Amazon PPC?
Amazon Pay-per-Click (PPC) is an advertising platform that allows sellers to promote their products on Amazon. Sellers can create ads, set a budget, and pay when someone clicks on their ad. This model helps them reach more shoppers and increase their product visibility.
Comply with Amazon’s advertising policies and guidelines.
Have a registered brand on Amazon to use Sponsored Brand Ads.
Meet the minimum budget requirements Amazon sets for each type of ad campaign.
You can start creating and running sponsored ad campaigns on Amazon to promote your products and drive sales by meeting these requirements.
Amazon PPC and Organic Rankings: Do They Go Hand in Hand?
Amazon PPC positively impacts organic rankings. As your ads generate better sales, your organic ranking improves because Amazon’s algorithm favors products with high sales velocity. Running PPC ad campaigns can improve both your paid and organic sales.
Types of Amazon PPC Ads
There are three main types:
Sponsored Product Ads,
Sponsored Brand Ads,
Sponsored Display Ads
Sponsored Product Ads
Sponsored Product Ads showcase individual products and direct shoppers to the product details pages. You can target specific categories, keywords, or products to reach your desired audience. These ads perform well to boost sales and visibility quickly.
With Sponsored Products Ads, you can—
Control and spend with CPC (cost per click) pricing
Only show products relevant to shopping inquiries
Advertise on product pages and in search results
Sponsored Brand Ads
Sponsored Brand Ads help in promoting an entire brand or product line. When clicked, they lead to a custom brand landing page or Amazon Storefront. These ads are excellent for raising awareness and promoting a unique brand story.
With Sponsored Brand Ads, you can—
Manage and spend with cost-per-click (CPC) pricing
Appear on product pages and shopping results
Display videos, images, and custom headline search ads
Sponsored Display Ads
Sponsored Display Ads appear on Amazon and also on external websites. Sponsored Display Ads help retarget, reach new customers, and cross-selling. These ads require more advanced targeting strategies.
With Sponsored Product Ads, you can—
Manage and spend with CPC (cost per click) & CPM pricing
Appear on and off Amazon
Engage the audience on and off Amazon as shoppers browse, discover, and shop for products.
Setting the Stage: Preparing for Your Amazon PPC Campaign
Creating a solid foundation before commencing your Amazon PPC campaign is critical to increasing your chances of success. This section lists the steps to prepare for your campaign, such as completing keyword research, improving your product listing, and deciding on a budget.
Following these guidelines will prepare you to launch a successful Amazon PPC campaign.
A. Optimizing Your Amazon Listing Before Diving into PPC
Before you create ad campaigns or launch your PPC campaign, ensure your product listings are optimized. This includes compelling titles, high-quality images, and informative bullet points. An optimized listing increases the chance of conversion, ultimately improving your ad performance.
B. Identifying Your Target ACoS and Profit Margin
Knowing your target Advertising Cost of Sale (ACoS) and profit margin is crucial for an effective campaign. Calculate the breakeven ACoS by dividing your profit margin by the sale price. Aim for an ACoS lower than the breakeven point to maintain profitability.
Breakeven ACos > ACoS: profitable ads
Breakeven ACoS < ACoS: your advertisements are not profitable
C. Setting Goals for Your Amazon Advertising Campaign
Set measurable goals for your Amazon PPC campaign, such as increasing sales, improving organic ranking, or gaining brand exposure. These goals will guide your strategy and help you track the success of your campaign.
D. Budgeting: How Much Should You Spend on Amazon PPC?
Allocate a budget for your PPC campaign based on your goals and desired outcomes. Start with a lower budget and increase it as you analyze your campaign’s performance. Remember to include the cost of your PPC efforts when determining your entire profit margin.
Choosing the Right Amazon PPC Ad Type for Your Business
As an e-commerce entrepreneur, knowing which Amazon PPC ad type suits your business is crucial for optimizing ad spend and driving sales. Let’s dive into some essential ad types and their benefits.
Sponsored Brand Ads Benefits
Sponsored Brand Ads are perfect for promoting your brand and product portfolio.
Offer flexibility in ad creative – custom headlines, logos, and multiple products.
Drive traffic to your branded store page – enhancing the shopping experience.
Automatic-Targeting vs. Manual-Targeting Sponsored Product Ads
Choosing between automatic and manual targeting for Sponsored Product Ads depends on your goals and level of PPC expertise. Here are some considerations:
Choosing the right ad type requires understanding your brand goals and target audience. With this knowledge, your Amazon PPC strategy will be more effective and yield better results.
Sponsored Ads Best Practices
Sponsored Brands Ads are ideal for boosting brand awareness; product ads are relevant to showcase and promote multiple products simultaneously; display ads help capture potential customers.
Among ad types, Sponsored Brands Ads help indirectly promote brands and products simultaneously, and Sponsored Products Ads are the most popular.
Here are some best practices for Amazon Sponsored Brand Ads, Sponsored Product Ads, and Sponsored Display Ads:
Use high-quality images and concise, attention-grabbing ad copy to showcase your brand and products.
Target specific keywords and customer segments to ensure your ads reach the right audience.
Use branded keywords to increase brand recognition and drive traffic to your store page.
Use custom headlines and logos to create a unique brand identity and increase ad relevance.
Optimize your product portfolio and ensure your products are stocked and ready to ship to avoid disappointing customers.
Monitor your campaign performance regularly and adjust bids, targeting, and ad creative to optimize results.
Creating a successful Amazon PPC strategy necessitates extreme dedication to detail and a solid understanding of your target audience’s requirements. This section will explore the critical components of building an effective PPC campaign.
Keyword Research
Keyword research is the starting point for building your PPC campaign. Utilize tools such as Amazon’s own Keyword Planner, Google Keywords, or other third-party software to identify relevant, high-traffic keywords related to your product.
Foundation of PPC Campaign
Don’t just focus on high-volume keywords; consider long-tail phrases, which may have less competition, and offer them to a better-targeted audience. These will contribute to the overall performance of your campaign.
Branded vs. Unbranded Keywords
Divide your keywords into branded (related to your brand) and unbranded (generic terms). Targeting branded keywords helps you capture existing brand-aware consumers, while unbranded keywords expose your product to potential shoppers unfamiliar with your brand.
Creating a List of High-Performing Keywords
Analyze your initial keyword research to identify high-performing keywords. Look for those with high search volume, low competition, and high relevance to your product. Keep refining your keyword list, testing, and tracking performance over time.
Determining Your Campaign Budget
Setting a campaign budget helps control overall ad spend. Allocate your advertising budget based on performance history, product margins, and product lifecycle stages. Regularly review your budget to ensure your campaign remains cost-effective and meets desired objectives.
Manual targeting allows you to select ad groups with specific keywords and control bids, which, with careful optimization, can lead to better results.
Product Targeting (ASIN or Category)
Product targeting allows you to display your ads on other product detail pages or within specific categories. Targeting by Amazon Standard Identification Number (ASIN) ensures your ads appear on competitors’ product pages, while category targeting broadens your reach within the larger market.
Adjust Starting Bids for Your Keywords
Begin with a moderate bid amount for your exact match keywords and continuously monitor and adjust based on performance data. Balance your bids between competitiveness and profitability to stay on budget and strengthen ROI.
#1: Creating a Campaign and Filling in the Settings
Start by navigating your Amazon Advertising dashboard on your Amazon seller account and choosing Campaign Manager. Set your campaign budget and duration by entering a campaign name, start and end dates, and a daily budget. Be sure to select a targeting type, either manual or automatic, based on your desired level of control.
#2: Adding Keywords to Your Manual-Targeting Sponsored Campaign
To optimize your manual-targeting campaign, begin by researching relevant keywords. You can use tools like Amazon Autosuggest, Amazon Brand Analytics, or third-party keyword tools and extension.
Add these relevant keywords to your ad group by selecting Add keywords and adjusting bid amounts to stay competitive. Remember, the more specific the keyword, the higher chance of converting.
The Search Term Report shows the search terms that triggered your ads and how they performed. Use this data to identify profitable and negative keywords to optimize manual and automatic campaigns. Analyze the report regularly and adjust your bids and targeting to maximize ROI.
Amazon PPC: Key Terms and Features
Some key terms and features to understand in Amazon PPC advertising are manual targeting keywords, optimizing automatic targeting, best practices for sponsored brand ads, performance metrics, etc.
Understanding these basics is essential for developing effective PPC campaigns and optimizing performance.
Manual Targeting
Manual targeting lets you choose keywords and set bids for maximum control over your PPC manual campaigns. It requires more time and expertise but can yield better results.
Use data from your Search Term Report and other analytics tools to refine your keyword selection and bidding strategy over time.
To optimize automatic-targeting Sponsored Product Ads, use Amazon’s suggested bid range to set your bid at an appropriate level. Monitor your campaigns regularly and adjust your bids based on performance data to maximize your return on investment (ROI).
What is a Good Conversion Rate for Amazon Ads?
The ideal conversion rate for Amazon ads depends on various factors, including your product category, competition, and advertising strategy. However, a good benchmark to aim for is around 10%-20%, which means that for every 100 clicks on your ad, you should expect at least 10-20 sales.
How to Target Your Amazon PPC Ads?
Select the right keywords and targeting options based on your product and target audience to target your Amazon PPC ads effectively. You can target by keyword, product, category, or customer interest. Set a realistic budget and monitor your campaigns regularly to optimize performance.
Amazon SEO Sales vs. Amazon PPC Sales
Amazon SEO (Search Engine Optimization) is the process of optimizing your product listings to improve organic search results and sales. On the contrary, Amazon PPC (Pay-Per-Click) is a form of advertising where you bid on keywords to display your products in search results or other product listings.
Both methods can drive sales, but the key is to strike the right balance between them for optimal results.
Conclusion
As you’ve worked your way through this article, you have gained valuable insights into Amazon PPC marketing. Remember, a well-managed and optimized PPC strategy can boost your product visibility and drive sales. You’re on the right track to excel in the competitive Amazon marketplace by implementing the basics we’ve covered.
In the ever-evolving world of e-commerce, it’s crucial to continue optimizing your PPC ad campaign. Regularly monitor your campaigns and adjust your strategies as needed. Utilize data-driven insights and adapt your approach to stay ahead of the competition.
Continuous optimization and learning are critical to the ongoing success
Stay adaptive and data-driven in your approach
Your journey toward mastering Amazon PPC has just begun, and with diligence and persistence, you will uncover new opportunities and techniques to grow your business on this vast platform. Good luck!
Q. How do I calculate my break-even Advertising Cost of Sales?
Your break-even ACoS (Advertising Cost of Sale) is the amount of money you spend on advertising for every dollar of revenue you generate. To calculate it, divide your ad spend by revenue and multiply by 100.
This will provide you with the ratio of ad spend to target sales.
Q. Why is PPC important for Amazon sellers?
PPC is crucial for Amazon sellers as it helps achieve immediate visibility on the platform, leading to increased sales and market share.
The competitive nature of Amazon makes it difficult for new products to stand out organically, and PPC can provide a significant boost in visibility, especially for products in saturated markets.
However, as your understanding of successful keywords and campaign optimization improves, it’s a good idea to shift toward more manual campaign targeting, which offers greater control and precision in targeting and bidding.
Q. How does the Amazon CPC auction work?
The Amazon CPC auction works by allowing advertisers to bid on keywords related to their products. The advertiser with the highest bid for a specific keyword wins the auction, and their product is displayed at the top of the search results page.
The advertiser is charged the amount of their bid only when a customer clicks on the ad and lands on their product page. Amazon also considers ad relevance and historical performance in the auction process.
Q. Does Amazon PPC improve organic rankings for my FBA and FBM products?
This can increase your product’s visibility and improve its organic ranking. Additionally, increased sales from Amazon PPC can lead to more customer reviews, positively impacting your organic ranking.
8-figure Amazon seller and serial online entrepreneur since 2015. Research and practice various online business models, and apply his in-depth learnings to further expand and grow his businesses as well as help others to achieve greater successes. Ex-VP of a high tech VC in Vancouver and a Management Consultant with over a decade of experience in the industry. Master's Degree from HEC Paris.
