How to create your Amazon PPC Strategy: Campaigns, Expectations, Outsourcing
If you want to become a successful Amazon seller in 2024, you need to have a serious grip on your PPC advertising. Why? Because it makes or breaks your success as a seller on Amazon.
The Most Important Lesson on Amazon PPC
You can easily create and launch ads on Amazon; anyone can. However, you can also burn a ton of money on this if you don’t know what you are doing.
If you only learn one valuable lesson today…If you don’t read anything else- just know this….
It takes a long time for a newbie to truly get a firm grip on ads.
It takes months for most new ad campaigns to become profitable.
Why? Well, of course, we’ll get into the weeds on that a little later. For now, another super simple but much-needed fact…
A Basic Critical Fact Of Amazon PPC
Your competitors are all using Amazon PPC, so you need to use Amazon PPC. This article could change how you run your business in the next 12 months, so pay attention to the details. This article isn’t just Amazon PPC advice. This is also solid business advice to protect you from making costly mistakes.
What are Amazon PPC Ads?
In case you are new to the game, let’s first understand what PPC is: Pay-per-click (PPC) is an online advertising model where you pop up ads on the internet, and you pay when someone searching clicks your ads. You see these ads all day, all over the internet. Today, we’re just focusing on Amazon PPC ads because those are the ones inside the Amazon ecosystem that can seriously change your business for the better.
Amazon PPC is a specific advertising platform that allows all Amazon sellers to advertise their products on the Amazon marketplace. You get to target a specific audience of profiled customers. For example, Amazon-sponsored products appear at the top of search results.
What is the goal of Amazon PPC?
Your goal for running an Amazon PPC ad campaign should be to drive traffic as profitably as possible while improving organic rank to drive traffic at no cost.
PPC alone will not make your brand successful on Amazon; it is only half of the equation. Without a good product, reasonable demand, and an optimized product listing, no amount of traffic will make your product convert.
The goal of PPC is to drive traffic and to drive it as profitably as possible. And the most profitable way is to rank organically. But, when you have just started selling on Amazon, you need PPC campaigns to boost the organic ranking
Put simply, PPC is a means of placing product ads in front of shoppers at the top of Amazon search results.
The Amazon PPC process bottom line
You submit bids to place ads in front of Amazon users for specific keywords related to your advertising products through an auction-based system. That means you compete with other sellers to buy a specific ad placement shown when a visitor searches for that particular keyword.
When a potential buyer clicks on an ad, you pay a fee to Amazon based on the bid amount you agreed to. This means that you now operate as an advertiser who buys advertising space regularly to get eyeballs on your own ads with the purpose of making profitable sales from the process.
PPC advertising is a complex game. Amazon gives you the option to create a ton of different campaigns and ad types. This way, you can match your ad types to sellers and use the endless options available in areas such as keyword targeting and product targeting. If you don’t want to go deep on Amazon PPC, that’s fine. If you’re going to use Amazon ads even just a little bit, then you really need to understand keyword targeting and product targeting…
Understanding Keyword Targeting
When you shop on Amazon, did you know that over 95% of purchases start from just regular keyword searches? When you use keyword targeting, you can leverage these keywords to place your products right where shoppers can see them, both in search results and on product detail pages. For example, if you're a pet brand selling pet products, you'd benefit from including keywords like “dog food” or “cat food” in your advertising campaigns.
Getting to Know Product Targeting
Unlike keyword targeting, which matches your ads to shoppers' search queries, product targeting allows you to pinpoint specific products, categories, or brands for your ads. This means you can target either your own products or even those of your competitors.
Comparing Keyword and Product Targeting
Now, let's differentiate between keyword and product targeting. The main difference you'll notice is where your ads appear. If you choose keyword targeting, your ads can appear on search result pages or product detail pages. However, with product targeting, your ads will specifically show up on product detail pages.
But with all those options, it makes it very easy for you to burn a ton of cash in advertising spend if you aren’t really on top of Amazon PPC optimization.
What is the goal of Amazon PPC?
Your goal when running an Amazon PPC ad campaign should be to drive traffic as profitably as possible while improving organic rank at a price with a great RoAS (return on ad spend).
Why are Amazon Ad Campaigns so important for sellers?
Did you know that most searches for physical products don’t start on Google, they start on Amazon?
The number is just over 50% globally, and then that number jumps up to 66% in the US and Europe (according to Statista).
The goal of your Amazon PPC campaign is not just to drive immediate traffic to your product listing. But, it also helps to rank high on Amazon search results, which boosts your favor with the algorithm.
One of the main benefits of your Amazon PPC campaign is that it is the quickest and most direct way for shoppers to get to your products. We love low friction, and PPC, if done right, can be rocket fuel for your business.
The Holy Trinity of goals on Amazon PPC
- Get more sales - retargeting repeat customers as well as new-to-brand purchasing.
- Get better data - PPC campaigns help discover profitable search terms that can be incorporated into product description pages for Amazon SEO and launched as keywords in new campaigns.
- Get a better organic rank - the roll-on effect of increasing sales volume and indexing for highly relevant keywords helps improve organic ranking and get free traffic.
With the current level of competition on Amazon, you should generally understand that without PPC, your product won’t be visible. The most significant value comes from making sales, but you can’t ignore the power of the data and the insight that PPC provides. You get vastly improved insights into an extra level of metrics to identify very specific opportunities to optimize your systems.
How does an Amazon PPC Campaign work?
To understand how Amazon PPC advertising works, let’s take an example-
- The seller searches for a keyword like “Spiderman kids watch.’’
- Amazon collects all relevant products (Organic + Sponsored Ads) for the word ‘’Spiderman kids watch.’’
- All the Amazon sellers bid for the keyword, and the highest bidder seller wins.
- Amazon automatically shows the winning product ad on the top of search and more details.
- As the buyer or any person clicks the ad, a seller needs to pay some fee to Amazon.
Amazon’s ad cost depends on your product category. As an Amazon seller, you should decide your budget. Set your advertising budget and bid to a level that makes your product profitable. It is better to start with a smaller amount, test, analyze the results, and then make more investments. PPC is all about trying things out and making quick adjustments to see what’s working.
Amazon PPC Key Terms and Features
If you’re going to play this game, you need to know the rules but also the names:
- Advertising Cost of Sales (ACoS)- ACoS is the ratio of ad spending and sales revenue. For example, if you spend $5 on advertisement and get $20 in sales in return, your ACoS will be 5/20*100=25%.
- TACoS or Amazon TACoS, or total advertising cost of sale, is a metric to measure ad spend relative to an Amazon seller's total sales revenue, including ad sales and organic sales. TACoS gives Amazon sellers a good view of their overall ad performance and business profitability.
- Organic Sales are sales that come from organic search, and not from paid ads.
- Impressions- The number of times your advertisement is viewed or clicked.
- Ad daily budget- The amount you spend daily for an advertisement.
- Clicks- The number of times a buyer or a person clicks on your ad.
- Click-Through-Rate (CTS)- It is the ratio of clicks to the number of impressions for an ad.
- CPC - Cost-per-click - bidding means that you pay for each click on your ads. For CPC bidding campaigns, you set a maximum cost-per-click bid - or simply "max.
- Conversion rate, or CVR, is a common metric used in digital marketing to denote the percentage of website visitors who 'convert' by taking a desired action, such as making a purchase, filling out an online form, or subscribing to a newsletter.
- AOV - Average order value tracks the average dollar amount spent each time a customer places an order on a website or mobile app.
- Keywords- A search term given to a product or category to increase its discoverability on Amazon. The keywords are usually 1-3 words long.
- Bid- the amount of money you pay to Amazon each time someone searches for a product and clicks your ad.
- Campaign budget - A campaign budget is often regarded as a particular campaign’s objective in terms of spend.
- Amazon Standard Identification Number (ASIN)- a 10-digit no. Amazon gives to each product to identify it uniquely.
- Attributed sales- the total amount of sales your ad generates from clicks on your ad.
- Match Type- This applies to keywords to allow how the ads will appear on the Amazon search. Match types are Phrase, Broad, Exact, and Negative keywords.
- Return on Ad Spend (RoAS)- This is the revenue generated to advertising costs ratio.
- Sponsored Product: Sponsored products on Amazon are ads that appear on top of Amazon search results of related keywords.
What are the different types of Amazon PPC?
When you first create a PPC campaign, Amazon offers three types of ads-
- Sponsored Product Ads- the most common ad type used by 70% of Amazon sellers. Sponsored product ads appear at the top of the search results page and the Amazon product listing page. Buyers can see sponsored Ad tags on sponsored products. It gives instant visibility and results to your Amazon listing. You can use automatic or manual targeting as per your experience.
- Sponsored Brand Ads- These advanced Amazon PPC ads are available only to brand-registered sellers. These ads include the brand’s tagline, logo, and products from the brand. Sponsored Brand Ads boost visibility by curating brand experience to potential buyers.
- Sponsored Display Ads- These are automatically generated, self-service display ads to target more audiences based on the shopping interests of buyers.
Other Ad types that you can create on Amazon:
- Video Ads- This type of Ad appears on and off Amazon, IMDb, publisher channels, and connected TVs. Videos increase product visibility, and these videos are usually 15-30 seconds long and have all the relevant information about the product.
- Audio Ads- These ads play on Amazon music and Alexa-enabled devices on desktop and mobile devices.
- Amazon DSP- is a demand-side platform allowing advertisers to bid and purchase advertising display, space, audio, and video ads.
- Amazon OTT- It lets you reach shoppers with video on Amazon. These ads allow brands to express their stories and provide an engaging experience to Amazon customers.
Amazon PPC Campaign Structure and Best Practices
The Amazon advertising console is structured in hierarchal levels. If you are new to Amazon, you should clearly understand these levels to optimize your Amazon advertising campaigns effectively. It will help you save time and money and get a good RoAS (return on ad spend).
Portfolio gives you a dashboard to track, monitor, and manage campaign performance. You should use the portfolio to arrange the campaigns, drive valuable insight efficiently, and get an overview of all campaigns in one place.
The portfolio allows you to group all campaigns of one parent product to quickly glance over the key metrics such as ad spend and sales data. It is a great tool for Amazon PPC management and enables you to analyze data at the parent product level to see which products perform well and which ones require your attention.
- You should keep one parent ASIN per portfolio.
- You should monitor performance and generate reports at the parent product level.
Different Types of campaigns
Campaigns include Sponsored Products, Sponsored Brands, and Sponsored Display advertising. You can choose a manual or automatic campaign based on your experience and requirements.
As we mentioned earlier - an Amazon PPC campaign can absolutely burn cash. So, if you’re trying to learn this yourself, you should talk to someone who knows what they are talking about. Dropping some investment on a course is a solid idea ( just do your due diligence first). However, the truth is that Amazon PPC is a whole set of expertise on its own. If you’re making a reasonable amount of money, then you should consider the option of outsourcing. Of course, this is another set of problems to deal with. If you’re serious about becoming a success as a business owner, then sooner or later, you’re going to need to hire people, so maybe this is also an opportunity to start engaging with that process.
Let’s be clear. We are not telling you to go out and hire the first Amazon PPC guy you can get your hands on. If you want some advice on hiring Amazon people, then let us know. We’ve done a lot of it here at Seller Candy….!!
Let’s get back to strategy…..
- You should keep one product per campaign to advertise.
- Separate campaigns based on match types apply to manual and automatic targeting campaigns.
Successful Amazon PPC Strategy
Do you know 60% of Amazon sellers struggle to launch a successful Amazon PPC campaign?
The message here is super simple:
- Focus on using the budget in the most efficient way
- Allocate more budget to keywords that are converting
- Test, test, test!
Optimize your Product Listing
Before you start your PPC campaign on Amazon, you need to 100% optimize your product listing to the absolute best standard for Amazon’s search algorithm. Why? Amazon SEO is the core of your listing. The PPC will support it but cannot replace it. Do whatever it takes to get your listing fully optimized before you make a start on Amazon PPC.
If you spend money on something that doesn’t convert, it is like setting fire to money and watching it burn. Also, CRO (conversion rate optimization) can actually be a fun process. When you figure out how to make your listing convert well, you’ll feel a lot more confident about your Amazon PPC campaign. In addition, if your PPC isn’t working, you don’t want to be trying to find the leaking holes in your listing. You want to be focused on finding the issues inside the PPC (which is complex enough as it is).
Amazon Listings Optimization
The first thing to do when it comes to listing optimization is, of course, keyword research for the listings. It considers using some of the Amazon tools for keyword research, like Helium10.
After conducting research on keywords, separate them into three groups for title, description, and back-end strings.
Finally, implement those keywords into your content and enjoy the results of organic sales.
And one more thing, make sure that all graphics and videos are of great quality and display product benefits in the best way to sell.
Define your PPC Ad advertising goal
You should understand that creating Amazon PPC advertising without a clear goal is like roaming on the road without a destination - you just waste a whole tank of gas and get nowhere. You can’t hit a goal that you haven’t clearly defined.
So what’s your goal?
- Awareness of your brand or product?
- Increase conversions?
Just as importantly, how you can measure success and track performance is crucial.
You need to measure what matters. If you can’t measure it, you can’t manage it…
Calculate your Default Advertising Bid
You should set a realistic advertising bid rate if you want your ad to appear in the top Amazon search. Remember your target ACoS, and don’t bid an amount that makes your product unprofitable. This is challenging stuff! Get help with understanding the nuts and bolts before you spend any money on your PPC.
Start Advertising on Amazon
If you are new to Amazon, then sure, throwing investment at some ads that might not work for your profit margins is a scary business. We don’t recommend starting a campaign without some serious research and starting with a small budget. There is also the issue, as a business owner, as to whether you should even be doing it yourself at all. We recommend talking to some agencies and freelancers and getting a good feel for what to look out for. Definitely talk to a few experts before you kick off!
If you need help with your Amazon Ads, reach out to trusted industry experts like Trivium.
Remember, there are three ways to deal with Amazon PPC:
1. Hire an agency
2. Get a freelancer/ staff member
3. Do it yourself
There is no simple answer to which one you should choose as they all have positives and negatives. The main thing is that you weigh up the options correctly.
Next week, we’ll explain the pros and cons of hiring for your PPC. This one is going to be pretty comprehensive. We’ve consulted with recruitment pros to discuss hiring and the actual issues around specifically hiring an Amazon PPC specialist and what to look out for.
If you’re not getting our tips specifically for Amazon sellers and want to stay ahead of the game every week, grab them here.
At Seller Candy, we’ve supported Amazon sellers with optimizing their listings for years. We spend our days solving problems like:
- Account health
- Non-PPC promotional activities
- Seller Central support service
- Inactive listings
- Inventory management
If you want to learn how we help sellers, “Never talk to Seller Central ever again,” book here for a call.