If you're looking for a simple guide to start doing Amazon PPC Ads, then you've come to the right place.
In this article, we'll cover all the basics of Amazon Pay-Per-Click advertising and even a step-by-step guide so you can start advertising your products on Amazon today.
Understanding Amazon PPC Ads
Let's start by understanding what Amazon PPC ads really are and how they function.
What are Amazon PPC ads?
Customers will always see both sponsored (paid) and organic results when they search for anything on Amazon.
The image on the left shows an example of a sponsored outcome, and the one on the right shows an example of an organic result.
To create sponsored advertisements, you must use PPC, or pay-per-click. Which is an auction-style system where you can bid on keywords, competitors, and categories.
The term "pay-per-click" originates from the fact that you only have to pay your bid price if someone clicks on your advertisement.
What's the Goal of using Amazon PPC?
The short goal of Amazon PPC is to advertise our products on EVERY single SERP that it is profitable to do so on. Doing this will earn us extra net profit in and of itself, but it also will help our organic ranking which will in turn earn us extra net profit.
This means that we need to capture every possible SERP and then manage the bid on that term so that it is actually profitable to advertise on it.
Why Amazon Sellers Need to Do Amazon PPC
Under ideal circumstances, our products will appear at the top of all relevant searches organically and stay there forever. Unfortunately, this is rarely or never the case. For any given product, there are thousands upon thousands of potential SERPs that it could rank under, and Amazon will naturally think that our product is the best option on only a very small percentage of them.
So, we need some way of capturing the traffic on the SERPs where we don’t rank well, or as high as we’d like, and the best available option is to pay Amazon for placement via PPC.
The Two Primary Benefits of Amazon PPC:
- Allows us to capture sales we wouldn’t otherwise
- Teaches the algorithm that we are relevant to that SERP and that people who search for that term like our product
Step-by-Step Amazon PPC Strategy to Start Advertising on Amazon Today
Now that we've covered the basics of Amazon PPC, let's get into the actual steps that you can follow to get started advertising on Amazon.
Step 1: Set Up Low-Bid Auto Campaigns
An “auto” campaign means that you will let Amazon automatically decide where to display your ad rather than inputting keywords or product targets manually (that is called a manual campaign).
You will want to create one low-bid auto campaign per ASIN.
In campaign manager, choose the Sponsored Product campaign type.
Select “Auto Targeting - Set Bids by Targeting Group” and then choose all 4 target groups.
Set each to a $0.20 bid
Down Only bid strategy
Why Do This?
These auto campaigns allow you to target the cheapest placements, products, and keywords on Amazon related to your product. Kind of like getting all of the scraps leftover from your competitors.
Typically these campaigns will have lower impressions because the bids are really low but the idea is that when you do get a sale, it’s highly profitable.
As you can see in the pic, we got an extra $3,190 in sales at a 7% ACoS from one of these campaigns over a period of 30 days.
Step 2: Create an “Exact” and a “PTA” campaign
The low-bid auto campaign that you just set up is also going to be doing some keyword discovery for you. So you might as well take advantage of it. In order to do that you will need 2 more campaigns.
First, create an “exact” campaign.
This campaign will allow you to “harvest” keywords.
Again go to sponsored products but this time choose “manual targeting” and “keyword targeting”.
Enter in a placeholder keyword and choose the “exact” match type. This is super important! You don’t ever want to mix your match types.
Then choose down only bidding again.
Next, create a PTA campaign.
This campaign will allow you to “harvest” product targets.
The set up is the same except you will choose “product targeting”.
Step 3: Harvest Keywords and Product Targets
Then, whenever you go into your campaign manager to check on the progress of your ads you’ll want to harvest from your low-bid auto campaign.
Go to “search terms” after clicking on the ad group.
Then, check to see which search terms have converted.
For any keywords that have converted, like #1 and #2 above” you can move those into your exact campaign with a starting bid of around 10% of your product’s gross profit.
For #3, if it had a conversion you would add the ASIN into your PTA campaign with the same starting bid.
For #4 you would do nothing since there was no sale.
Navigating through the world of Amazon advertising, understanding the different types of Amazon ad campaigns is crucial for maximizing your marketing efforts and reaching your target audience effectively.
Sponsored product ad campaigns are a powerful tool in the Amazon PPC guide for beginners. These ads appear within search results and on product detail pages, blending in seamlessly with organic listings. By using sponsored product ads, you can promote your Amazon products directly to shoppers who are actively searching for items similar to yours. This targeted approach can lead to higher conversion rates and increased visibility for your Amazon product.
Monitoring your advertising cost of sales (ACoS) is essential to ensure that your sponsored product ads are generating a positive return on investment.
The Three Types of Amazon PPC
To be clear, PPC and DSP are the two primary forms of advertising that you may use on Amazon. However, we'll be concentrating on the PPC (Pay-Per-Click) aspect of things in this article.
Three PPC Ad Types are:
Sponsored Product Ads
This is where the majority of Amazon sellers begin their journey, and even if you branch out into other ad formats, Sponsored Products will probably still constitute the bulk of your advertising approach.
With Sponsored Product ads, you can target competitor products, relevant keywords, or product categories to build campaigns for specific products.
Shoppers will see your ad when they use a search term that is relevant to your target. You can learn more about the difference between keywords and search terms here.
Benefits of Sponsored Product Ads
These advertisements appear at every stage of the customer's buying process. Including:
- On product detail pages
- Within search results
- On the right side of search results
- On the bottom of search results
This means you have lots of opportunities to reach potential customers.
Sponsored Brand Ads
These are also commonly called “headline search ads”.
For Sponsored Brands, you have a variety of formats to select from, such as showcasing your logo alongside three highlighted products (as in the image above) or even adding a video.
On a desktop device, these advertisements may show up in three different places:
- Above search results
- To the left of search results
- Below search results
Benefits of Sponsored Brand Ads
Sponsored Brand Ads are an excellent way to capture a customer's attention before they even click on a product page. Because you can include your logo, they're a good way to potentially raise brand awareness.
Sponsored Display Ads
These ads are unique (and slightly more advanced than the other two) in that they allow you to target customers both on and off Amazon.
These advertisements can be found in the following locations on Amazon:
- Product Detail Pages
- Customer Review Pages
Benefits of Sponsored Display Ads
This ad type enables you to target customers based on their interests as well as re-target customers based on their shopping behavior.
Which Amazon Ad Type is Right For You?
"Okay, so how do I know which one to use?"
This is entirely dependent on your product goals and budget. However, we recommend that you first become familiar with Sponsored Product ads.
Not only do they have the potential to generate a lot of money for your company, but without a solid understanding of Sponsored Product ads, it will be difficult to incorporate the other ad types into your overall strategy.
Manual Campaigns vs. Automatic Campaigns
Within Amazon Sponsored Products, there are two campaign types: automatic and manual. It is critical to understand the distinctions between these in order to maximize your earnings potential.
Automatic Campaign: Amazon selects which keywords to target, and you can manage bids at the campaign level.
Manual Campaign: You select which keywords to target and can set bids at the keyword level.
To Break It Down Even Further…
Let’s look at some different scenarios…
When Should You Use Automatic Targeting?
There are a few scenarios in which you may want to use automatic targeting.
- You're new to Amazon ads and unsure where to begin.
- You do not have time to manage a manual campaign.
- You want to use automatic campaigns to collect more data and optimize your manual campaigns.
Our Recommendations
While the first two scenarios are common, we would not recommend this as a long-term strategy because Amazon will be happy to continue taking your money no matter how profitable your campaigns are.
The third scenario, in our opinion, is one of the most effective applications of automatic campaigns. Essentially, we think of automatic campaigns as a keyword research tool that allows us to stay on top of keyword trends.
More about this later.
When Should You Use Manual Targeting?
In these cases, you may want to consider manual targeting.
- You already know which keywords you want to target.
- You want more control over your bids.
- You already have some basic knowledge of Amazon PPC.
Manual targeting provides more control, but it also requires more time, effort, and knowledge. So, before launching manual campaigns, make sure you're prepared to commit, or you risk losing money.
Why Not Both?
You do not have to choose just one!
In fact, we suggest using both.
Previously, we discussed using automatic campaigns as a keyword research tool to improve your manual campaigns.
Here's a quick overview of what that could look like.
Step 1: Create an automatic campaign and let it run until you have enough data (within your budget, of course).
Step 2: Download your Search Term Report from Campaign Manager and identify your high and low-performing keywords (start with conversions).
Step 3: Create a new manual campaign using the high-performing keywords from your automatic campaigns, so you can closely monitor it and precisely adjust the bids.
Basic Keyword Match Types
First of all, Keywords are the words you want Amazon to show your ads for when customers search for something related to your product.
(Remember, Keywords are different from Customer Search Terms. We’ve got a quick and easy breakdown of the differences in this article.)
This is what you see when you go to set up a manual campaign. You can select from three match types: Broad, Phrase, and Exact.
- Broad Match is the least specific match type.
- Phrase Match is slightly more specific.
- Exact match is the most specific match type.
If you'd like to learn more about Keyword Match Types, we have a full article on it here.
Measuring Success and Cost Efficiency
Calculating your Advertising Cost of Sales (ACoS) will be crucial for understanding the efficiency of your campaigns.
By analyzing the effectiveness of your Amazon PPC efforts, you can fine-tune your strategies to maximize returns and minimize costs.
Success in this arena hinges on your ability to measure results and optimize for cost efficiency.
Calculating and optimizing your Advertising Cost of Sales (ACoS)
To effectively measure the success and cost efficiency of your Amazon PPC ads campaign, you must understand how to calculate and optimize your Advertising Cost of Sales (ACoS). ACoS is a crucial metric that shows you the effectiveness of your advertising efforts by revealing the cost of your ads in relation to the sales they generate.
By analyzing your ACoS, you can determine which PPC ad types are performing well and which ones need adjustments. To calculate your ACoS, divide the total amount spent on advertising by the total sales generated from those ads, then multiply by 100 to get the percentage.
Optimize your ACoS by refining your keywords, adjusting your bids, and improving your product listings to reduce the cost of your ads while increasing sales, ultimately maximizing the return on investment from the Amazon charges.
Analyzing the effectiveness of your Amazon PPC campaigns
When assessing the effectiveness of your Amazon PPC campaigns, focus on analyzing key metrics that gauge both success and cost efficiency. Dive into your Amazon PPC ads' performance by examining metrics such as click-through rates, conversion rates, cost per click, and return on ad spend.
Understanding these metrics will help you determine which campaigns are driving the most value for your business and where adjustments may be needed. By regularly monitoring and analyzing the effectiveness of your Amazon PPC campaigns, you can optimize your strategies to improve results and maximize your return on investment.
This strategic approach will guide beginners in navigating the complexities of Amazon PPC advertising, ensuring a more successful and cost-effective campaign management experience.
Hopefully this article helps to get you started! If you have any questions don’t hesitate to reach out to us at Howdy@PPCFarm.com.
