Table of Contents

1. What is Amazon PPC?

2. Why Use Amazon PPC?

3.  Types of Amazon PPC Ads

4. Determining the Proper Budget for Your Amazon PPC Campaign

5.Basic Tactics for Amazon PPC Campaigns

6. Types of Bidding Strategies
7. Fundamental Metrics of Amazon PPC
8. Effective PPC Campaign Management Strategies

9. Top PPC Campaign AI Tools as of 8/16/2024

What is Amazon PPC?

Amazon PPC (Pay-Per-Click) is an advertising model that allows sellers to promote their products on Amazon to overcome the sea of competition and drive sales. PPC Ads appear on search results pages and product detail pages, and only cost you money when a shopper clicks on your ad. Each ad campaign is based on keywords, which are search terms that trigger your ad when searched for by customers on the platform.

Here’s why Amazon PPC is effective:

• Increases product visibility: Helps your product appear at the top of search results.
• Drives more traffic: Sends more shoppers to your product page, increasing the chance of conversion.
• Cost-effective: You only pay for clicks, not for impressions (views of your ad).
  
  
  
  

Why Use Amazon PPC?

Amazon PPC can be greatly beneficial for:

• Product launches: Gaining initial visibility on the platform for a new product.
• Increasing sales: In competitive niches where organic ranking may be difficult to achieve, PPC can give you that boost you need in the marketplace.
• Promoting discounts or special events: Strategic PPC campaigns can help your business by maximizing exposure during promotions, holidays, or sales.
• Retargeting: PPC can also aid you in addressing shoppers who have already viewed your product or similar ones in efforts to convert a sale.
• Leveraging optimized listings: Using a campaign once your listing is optimized can elevate your products performance on the platform.
  
  

Tip for Beginners: Ensure your product page is fully optimized (high-quality images, compelling copy, and relevant keywords) before running PPC. Driving traffic to an under-optimized page will result in low conversions, and ultimately a waste of ad spend.

Types of Amazon PPC Ads?

Amazon offers a variety of ad types when running PPC campaigns. It's important to pick the ad type that most closely aligns with your goals on the platform. Listed below are the types of ads available to you for your PPC campaigns:

1. Sponsored Products

• What they are: Ads that promote individual products.
• Where they appear: Amazon search results and product detail pages.
• Best for: Driving traffic and sales to individual listings. Most beginners start with sponsored products because they are easy to set up and highly effective.

2. Sponsored Brands

• What they are: Ads featuring a brand logo, a headline, and multiple products from your brand.
• Where they appear: At the top of search results, helping build brand awareness.
• Best for: Established sellers with multiple products who want to showcase their brand to potential buyers.

3. Sponsored Display Ads

• What they are: Ads that target audiences both on and off Amazon.
• Where they appear: On product pages, off-site Amazon, and Amazon’s affiliate sites.
• Best for: Retargeting users who have shown interest in similar products in their browsing activities.
  
  

Tip for Beginners: Starting with Sponsored Products is a great approach as they offer the easiest setup and provide the most direct path to increasing sales. Think of this as a direct promotion of the product you are trying to sell.

Determining the Proper Budget for Your PPC Campaign

Setting a budget is crucial to ensuring you don't overspend while learning how PPC affects your listing's performance. Here's how to approach a new campaign:

1. Consider Your Product’s Profit Margin

• Understand your margins to determine how much you can afford to spend on ads without losing money.
• Example: If your product sells for $30 with a $10 profit margin, spending more than $10 per sale would hurt profitability. Aim for an Advertising Cost of Sales (ACoS) that fits within your margin.
  

2. Understand Your Goals

• Launch goals: If you’re launching a new product, you might want to allocate a larger budget to generate more sales quickly, build ranking, and gather reviews.
• Profitability goals: For established products, aim for a more modest budget to maintain a balance between driving sales and maximizing profits.
  

3. Use the 10% Rule for New Campaigns

• A common rule of thumb is to allocate 10% of your monthly revenue to PPC. If your revenue is $10,000 per month, start with a $1,000 budget for PPC.
  
  

Tip for Beginners: Start with a smaller budget while testing PPC effectiveness and scale as you gain confidence.

4. Test and Adjust

• Be ready to adjust your budget as you gather data from your campaign. If your campaign is perform well and driving sales, you can increase the budget; if not, lower it or adjust your strategy.
  

5. Use Amazon’s Suggested Budget as a Guide

• Amazon provides suggested budgets when setting up campaigns, based on keyword competitiveness. Use this as a reference, but adjust according to your product margins and goals.
  

6. Leverage Auto Campaigns for Data Gathering

• New sellers can start with auto campaigns, which allow Amazon to target keywords and gather data for you. Using this data to create more focused manual campaigns can be a great tactic for working towards success.
  
  
  
  

Basic Tactics for Amazon PPC Campaigns

At the end of the day, PPC from a high-level overview is simple. While it offers a number of complex tactics to execute and metrics to pay attention to, starting with a solid foundational understanding can  make the difference between gaining traction and spinning tires. Here's the basic premise of PPC broken out into 3 simple steps:

1. Finding Base Level Keywords

What are Keywords?

• Keywords are terms that shoppers use to search for products. Targeting the right keywords will make sure your ads are shown to the right audience. If you aren't advertising on keywords that customers choose to use when looking for products like yours, your likeliness of making a sale is significantly lowered.
  
  

Types of  Keywords:

• Short tail keywords: Simple terms with high search volume (e.g., "running shoes").
• Long tail keywords: More specific terms with lower search volume but higher purchase intent (e.g., "men's lightweight running shoes").
  
  

Tools for Keyword Research:
There are a number of tools available both through Amazon and through third party providers that will help you identify keywords relevant to your campaign. Listed below are a few off your options for Keyword Research:

• Amazon auto-suggest: Start typing into Amazon’s search bar, and it will show commonly searched terms.
• SellerApp: Provides keyword data like search volume and competition.
• Helium 10: Another great tool for finding profitable keywords.
  
  

Tip for Beginners: Start with a mix of both short and long-tail keywords to balance visibility and conversions.

2. Monitoring Keyword Performance

Finding keywords and setting them up in your campaign is only the first step to getting your campaign up and running. It's crucial that you keep a close eye on the performance of your keywords and campaign over time so that you can assess your tactics and adjust accordingly. Here are a few metrics to keep an eye on in order to assess the effectiveness of your campaign:

• Impressions: How many times your ad was shown.
• Clicks: How often shoppers clicked on your ad.
• Conversions: Whether those clicks led to sales.
  
  

3. Adjusting Keywords and Bids

 The fundamentals of adjusting your campaign keywords are simple:

• Increase bids on keywords that are performing well to maximize visibility.
• Lower or pause bids on keywords that are not converting.
  
  

Tip for Beginners: Regularly review and adjust your bids to stay efficient. Think in terms of weekly adjustments. Don't simply “set it and forget it.”

Types of Bidding Strategies

Amazon offers several bidding strategies to control your ad spend. Here are a few to keep in mind when setting up your campaign:

1. Dynamic Bid - Down Only

• Amazon automatically reduces your bid if it believes a conversion is less likely.
• When to use: Beginners should start with this strategy to avoid overpaying for clicks that might not convert.

2. Dynamic Bid – Up And Down

• Amazon adjusts your bid up or down based on the likelihood of conversion.
• When to use: Useful when you have a strong performing campaign, but it can lead to higher costs.

3. Fixed Bids

• Bids stay fixed regardless of conversion likelihood.
• When to use: Use this if you want full control over your bidding, but it’s not recommended for beginners.
  
  
  
  

Fundamental Metrics of Amazon PPC

It's important to know what you're looking at when analyzing your campaign. Broken down below are 5 of the most important metrics to consider when analyzing the performance of your campaign:

1. ACoS (Advertising Cost of Sales)

• Formula: ACoS = (Ad Spend ÷ Ad Sales) x 100
• Why it matters: ACoS tells you how much you’re spending on ads to generate sales. A lower ACoS means greater efficiency.

2. Impressions

• The number of times your ad is displayed.
• Why it matters: High impressions indicate strong visibility, but low clicks may mean your ad isn’t relevant.

3. Clicks

• The number of times shoppers click on your ad.
• Why it matters: High clicks suggest good ad engagement, but you also need to track if those clicks lead to sales.

4. CTR (Click-Through Rate)

• Formula: CTR = (Clicks ÷ Impressions) x 100
• Why it matters: A high CTR means your ad is resonating with shoppers.

5. RoAS (Return on Ad Spend)

• Formula: RoAS = Revenue ÷ Ad Spend
• Why it matters: A higher RoAS indicates more revenue generated from your ad spend.
  
  
  
  

Top PPC Campaign AI Tools as of 8/16/2024

Leverage AI tools to make PPC campaign management easier and more efficient:

1. SellerApp AI

• Automates bidding and keyword optimization, providing real-time insights into your campaign’s performance.

2. JungleScout PPC Manager

• Automates bid adjustments and helps with keyword discovery.

3. Helium 10 Adtomic

• Provides detailed keyword analysis and automated campaign adjustments.
  
  
  
  

Final Thoughts

For beginners, launching an Amazon PPC campaign can seem daunting. By following the steps laid out in this post, you can ease into the process of running PPC campaigns and start seeing the sales your business needs to grow and thrive.

With the right strategy, budgeting, and ongoing optimization, Amazon PPC can drive significant growth and awareness for your brand. When embarking on the PPC journey, it's important to stay adaptive, engaged, and focused so that your decisions fuel the results you and your company are looking for.