Amazon PPC – Know The Basics

Running an Amazon PPC campaign can be a very lucrative method for sellers to drive substantial sales for their product, increase the potential for more reviews, and boost visibility for new products.

However, it requires Amazon sellers to invest in a substantial amount of time to ensure their ad campaigns are correctly structured from the start. As a seller, this becomes critical as your business scales and you quickly find yourself managing a rapidly growing set of ad campaigns.

• What Is Amazon PPC?

Amazon PPC (Pay-Per-Click) is an auction-style system in which advertisers bid on keywords. When an Amazon customer performs a search for a product, the sellers with the highest bids on relevant keywords win the auction, and their product ads get listed as a “Sponsored Products” in the search results. Advertisers only pay the bid price if their sponsored product ad gets clicked, hence, “pay-per-click”).

Since Amazon PPC campaigns are auctions, you will only ever have to pay one cent more than your competitor for the ad placement in the search results.

That is if you bid $3 for a keyword, but your competitor only bid $1, Amazon would only charge you $1.01 for the ad placement. But remember, Amazon sellers only pay when their ad gets clicked, not every time it appears in the search.

• An Overview Of PPC Advertising

Paid traffic has an interesting history. It’s been around since 2000 and is both a science and art for many online businesses. It all started with Google AdWords (now called Google Ads). If you’ve done a Google search in the past 20 years, chances are you’ve seen some ads in your search results. In 2012, Amazon PPC Advertising came into play by allowing vendors and sellers to show off their products on Amazon’s site.

• How To Structure Your Amazon PPC Campaign

1. For each product (ASIN), you will create two campaigns; one automatic campaign and one manual campaign.
2. Create your automatic campaign first and let it run for 1-2 weeks minimum.
3. After you’ve collected a reasonable amount of data, download your Search Term Report and go through it to find your high converting keywords to add into a new manual campaign.
4. For your manual campaign, you will want to create three separate Ad Groups (for each keyword match type); one for Broad Match, Phrase Match & Exact Match.
5. Set the duration and budget for your automatic and manual campaign. For your manual campaign, you will also want to set the daily bid; start with the estimated bid provided by Amazon and adjust accordingly.

Note: If this is your first ad campaign, we recommend setting up a budget of $10 per day and keep the duration open-ended to track ongoing changes in your campaign.

Tip: Make sure to comb through your Search Term Report for long-tail keywords; these are the keywords used by customers with more specific search intent, meaning you will be targeting customers further down the conversion funnel. Long-tail keywords are lucrative for sellers because they tend to have a higher conversion rate and a lower CPC cost, as there is less competition for these keywords.

• Guidelines For Amazon CPC Optimization

• If your actual ACoS> target ACoS, it means you’re spending too much, i.e. you should lower your bid to test whether you can lower your ad spend without it affecting your sales considerably.
• If your actual ACoS< target ACoS, it means you have more budget to spend, i.e. you should raise your bid and test whether your ad reach (and therefore your sales) can expand exponentially.
• If your keywords are not receiving any impressions, check the product category (‘browse node’) and make sure that it is correct and that you have the keyword included in your listing or backend keywords. If your product category is correct and the keyword is included in the listing, then you will want to start increasing your bid, to test whether a higher bid can make the keyword ‘active’.
• Keywords that do not generate any sales over a longer period of time and remain unprofitable even after the keyword bid is lowered, should be removed from your manual campaign and added to your negative keyword list.

For Amazon sellers, it’s important to invest the time to learn how to structure your PPC campaigns correctly on Amazon. This becomes critical as your product volume grows, and you will want to have an optimal ad campaign structure in place which you can easily scale to support the growth of your Amazon business.