Amazon Advertising – Step-by-Step Guide to Amazon PPC
One of the most common mistakes for those who want to sell on Amazon is that when they find the product and send it to Amazon, they think everything is great and done. However, there should be something to differentiate products from other sellers. Advertising on Amazon with PPC (Pay Per Click) will increase the visibility of your product by moving up while increasing the chances of selling.
Table of Contents
- 1 Advertising on Amazon
- 2 What is Amazon PPC?
- 3 How Does Amazon PPC Work?
- 4 Keyword Matching Types
- 5 Amazon PPC Bidding Strategies
- 6 Types of Amazon PPC Ads
- 7 Running a Advertising Campaign on Amazon
- 8 Analyzing Amazon Advertising Results
- 9 Final Thoughts
Advertising on Amazon
Back in 2018 Amazon launched “Amazon Advertising” which allows third-party sellers to gain more visibility for their products or brand on the platform. These Amazon ads work very similarly to Google search when you type in a keyword and the results matching that said keyword appear. Some of the results are sponsored, which the website indicates with a subtle “sponsored” text below the image.
What is Amazon PPC?
Amazon PPC is a widely used ad where you pay per click, regardless of the number of actual sales. Word choice is the biggest factor determining whether the campaign is efficient or not. Well-managed advertising moves you forward, the ultimate goal is reaching the target audience with the right word choices.
Likewise, there will be words that get clicks but don’t return to sales. If sellers use these negative words wisely, they can help the campaign run more effectively and increase sales. Confused? Read on to find out more.
How Does Amazon PPC Work?
To find the answer to this question, it is first necessary to understand some metrics. Let’s learn!
- Impression: Tells how often the product shows up in Amazon search results or product detail page.
- Clicks: The number of when someone clicks on the ad.
- Advertising Cost of Sales (ACoS): ACoS is a metric that shows the ratio of total ad spend over total sales. It is an important percentage to determine whether the campaign is successful or not. For instance, if you spent $87.5 on advertising resulting in attributed sales of $350, the ACoS would be 25%. (calculated by $350/ $87.5=25%)
- Conversion rate: The rate at which the customer purchases your product after clicking on the ad. This ratio is low if the ads are incorrect or not optimized.
You can improve the conversion rate with the right keyword choices. There are 3 different keyword matching methods. Each of them has its pros and cons, and the function is different.
Keyword Matching Types
A lot of people ask which keyword matching type is the best. However, you already know the answer because you are the person who knows your business best. Furthermore, it depends on the situation. One matching type may be working well in one product but it does not mean it will be efficient in another one. Let’s learn the definitions and try to explain the differences between these matches through an example. Assume that you are advertising a product “Silicone Baking Mat”.
It is the most certain type. Although the general opinion is that this type always matches the exact keyword, the situation is different. It also gives results with the following situations: Plurals, singulars, and misspellings.
- Silicone Baking Mat
- Silicone Baking Mats
- Silcone Baking Mat (misspelling)
Consider phrase match as the middle stage. Unlike the exact match, words can be added before or after the search criteria, and spelling errors are also taken into account.
- Silicone Baking Mat (original keywords)
- Silicone Baking Mat for Women (added word to end)
- Red Silicone Baking Mat (added word to front)
- Red Silicone Baking Mat for Woman (added words to both sides)
- Silcone Baking Mat (misspelling)
Broad match is the type that appeals to the widest audience. Amazon may advertise your product in any search, where the search criteria include the words “Silicone”, “Baking” or “Mat”. Pay attention that this type also considers the marching order of all search criteria. For instance:
- Silicone Baking Mat
- Baking Mat for lamb chops
- Apple slicing & Baking
- Mat for cake and bake
One of the important points to mention here is finding negative words. As mentioned earlier, these words can get clicks but not turn into sales, which ultimately reduces profits. Find these words and use them as negative words.
Selecting different keyword matching types is available for Manual Targeting. However, if you want Amazon to handle the campaign, you have the Automated Targeting option. In the automated campaign, Amazon will advertise your product by optimizing it on every keyword it thinks is relevant. It is faster but more expensive.
Now that we know the metrics, keyword matching types, and targeting options, we need to decide on the bidding strategy.
Amazon PPC Bidding Strategies
When deciding on the budget, it would be healthier to start small and increase this amount after seeing some results. Set your budgets to a comfortable level and don’t forget, you can change your daily budget later.
When you set up your campaigns, you will enter a budget for the campaign and specify the “Default Bid” for any keyword (automatic or manual campaign) in each ad group where you are trying to promote a product. This means if you set your default bid at $0.10, you would only bid $0.10 for each item.
Amazon has introduced a feature called ‘Dynamic Bidding’, which gives the sellers three options to modify the bidding strategies.
- Bid Down Only: If Amazon believes the term that is searched for your item is not relevant, or less likely to convert, it bids down to the appropriate sponsored position, for a lesser dollar amount.
- Bid Up and Down: If Amazon believes your ad is more likely to result in a sale, it may increase your bid to give you better placements. Similarly, if it does not convert to sales and is seen as inefficient, Amazon lowers the bid.
- Fixed Bid: There won’t be any changes.
We are almost there but there is still one issue that needs to be discussed: The available ad types. There are 3 different ad types and they are located in different places, with different costs.
Types of Amazon PPC Ads
There are different types of Amazon PPC ads available and naturally, you should choose the right type for your business. If your are new to advertising and don’t know which one to pick, you can start by testing first. Especially sponsored products ads are a great way to get data and optimize the performance.
Sponsored Products Ads
Sponsored product ads allow companies to promote their products based on keywords. In terms of click-through rate and sales conversion, sponsored product ads perform well.
Sponsored Brand Ads
Formerly known as Headline Search Ads, are displayed on Amazon search results and product detail pages. They are keyword-targeted ads that can be used to attract more channel customers.
Product Display Ads
This is another PPC advertising displayed in the product page-similar products section. These ads are designed as self-service options and used in conjunction with ASINs to provide marketers with more options to focus on behavioral segmentation.
Running a Advertising Campaign on Amazon
After learning and deciding on the best methods, now it is time to launch! To get started with campaign creation, log into the Amazon Seller Center. Hover over the “Advertising” header, and then click on “Campaign Manager”.
When you reach the “Campaign Manager” page, click the “Create campaign” button as shown below:
Then select “Continue” where the red arrow will appear below:
Now make sure you enter or select all the information that the red arrows point to.
Note: If there is no end date, it will run indefinitely until you manually stop the campaign or add an end date to the campaign.
Then create an ad group name and start adding similar products to the ad group below this campaign:
Now is the time to choose your default bid amount.
Usually, if you’ve added similar products to an ad group, there will be a suggested offer where the red circle is in the image below.
When starting any new ad group, we recommend that you ignore the negative keyword section for now until you have more data.
Analyzing Amazon Advertising Results
After you have created the campaign, it may take up to 48 hours before it goes live. Additionally, it takes a certain period of time to interpret the data (the average time is 7 days).
To understand the data, it is necessary to understand the reports well. There are different types of Amazon Advertising Reports and each of them gives another perspective to analyze your campaign.
- Search Term Report: Can be used to find products and their conversions. This type of report has columns for advertising metrics and search terms, as the name suggests.
- Targeting: If you want a summary of targeted keywords in all campaigns with match types, this report will be your guide.
- Advertised Product: This report is useful to review performance on product/SKU level. Especially when we consider it is the only report that gives Advertised SKU info.
- Campaign: Allows to analyze different campaigns in one report.
- Placement: Reveals the effect of different placements.
- Purchased Product: Shows which keyword is associated with the purchase of that product.
- Performance Over Time: This report provides clicks, CPC (cost per click) and, total spend. You can found this data also on the dashboard.
Amazon PPC advertising is a powerful way to increase sales. However, there is a lot to learn and process. All the numbers and keywords may be confusing and can be analyzed deeper with charts. Let Eva be your advertising guidance.
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