What is Amazon PPC? Tips on Running Effective Amazon Ads
Kirsty Verity
Amazon PPC is a common challenge for Amazon sellers, especially for those who are starting.
Sellers often run ads with the mindset of getting more funds. Instead, most end up with higher costs because of delayed profitability.
Some feel overwhelmed because of the huge competition.
That’s why inexperienced sellers often have challenges with their cash flow. In the end, it also affects their profitability.
Today, we will be discussing how you can run Amazon PPC and maximize your results for profitability.
What is Amazon PPC
Amazon PPC is Amazon’s internal advertising system. It’s also known as pay-per-click advertising.
Sellers and vendors can promote their products inside Amazon’s ad platforms by paying a certain amount.
Amazon will then be posting the ads and include them in relevant search results.
Charges will only start once a customer clicks on your ad, hence pay-per-click.
This has been a proven strategy that works.
What it does is brings your products to the first page of search results. It increases your visibility and the chances of customers buying your products too.
That’s why you must learn Amazon PPC management the right way.
You also need to know Amazon PPC strategies so you could manage and control your spending.
Key Amazon PPC Metrics You Need to Know
Understanding Amazon PPC can be overwhelming for new sellers. And with all the acronyms you need to remember, it can also be confusing.
But if you want to see results in your Amazon business, you need to track and check these key metrics properly.
Here are seven key metrics to check on your Amazon PPC strategies.
Impressions
Impressions are the number of times the shoppers see your ads on Amazon search engines.
The higher your impressions are, the better chances you have at catching your audience’s attention.
While impressions are important, it doesn’t assure success. It also doesn’t measure how effective your strategy is.
Remember, Amazon ads are pay-per-click. Impressions don’t have much impact on click rates, but it gets you higher chances of sales.
Clicks
Clicks are the number of times a person has clicked on your ads.
While impressions don’t have much impact on your ad spent, clicks can indicate certain challenges in the way you set up your ads.
High click rates with low sales may show a problem on your product page. While your ads send traffic to your page, something makes them leave without buying.
This might mean you need to optimize your product page. It can also mean you need to optimize your ad targeting as well.
Low click rates with high impressions also indicate a problem.
This usually means that you’re not using the right keywords for your ads. People view your ads but are not interested in buying.
Keep in mind that user intent is as important as the keywords you use. So make sure to reevaluate the keywords you use when this happens.
CPC
This is the cost you pay every time a person clicks on the ads you created. Thus, cost-per-click.
CPC is calculated as the total ad spend divided by the number of clicks.
The goal is to lower your CPC cost while maximizing the profit you get.
To do this, you need to bid on the maximum cost and beat your competition for the best ad position.
The lower CPC, the higher your ROIs will be.
CTR
Click-Through Rates are critical in assessing your ad’s performance. It’s calculated based on the number of clicks divided by impressions.
Higher CTRs mean that your ad is getting the right attention from shoppers.
Lower CTR means your ad isn’t as compelling as it needs to be.
It can also indicate if your keywords need to be adjusted for relevance.
Conversion Rates
Conversion rates help you measure if your campaign is a success. It can be measured on a one, seven, and 30 days basis.
Conversion rates can also indicate the number of customer purchases on your product after getting to the product detail page.
It’s calculated based on the number of purchases received divided by the total number of ad clicks.
It can also indicate the relevance of your products on the product detail page.
If it’s high, that means you’ve got the listing correctly. If your conversion rates are low, it means you need to review your keyword and product listing.
ACoS
ACoS stands for an advertising cost of sales.
This is calculated using your ad spend divided by revenue then multiplied by 100.
It also indicates how well your ads are performing compared to your ad spend. The results may depend on factors such as your goals, campaign structure, and profit margins to name a few.
Now you might be wondering, what is the ideal ACoS to aim for?
Truth is, there is no one size fits all strategy for ACoS. It all depends on individual factors and goals.
Instead, you can check on others in your specific industry and marketplace for ad formats. This can help you see how well you’re doing compared to your competitors.
Here are practical tips on how to take control of your ACoS.
How Amazon PPC works
The goal of Amazon PPC is to help you generate traffic and drive sales to your products.
To do this, ads appear in a variety of places. These can include Amazon’s search engine results page, headlines, and product pages.
It can even be found on off-site marketing channels and email newsletters.
If you’re starting as an Amazon seller, the best way to go is to advertise inside Amazon first.
Amazon already has huge traffic that you can bank on. And they are already on the platform with the intention of buying.
While Google still tops search engines, Amazon is following suit, especially in eCommerce.
This means marketing outside Amazon can get you sales. But it doesn’t give you the same impact compared to advertising directly on Amazon.
There are millions of products available on Amazon. And the goal is for your products to be the first thing they see when they do searches.
Relevancy is a key factor for Amazon search engines. When people engage with your products, it lets the algorithm know that your product is relevant.
The higher you rank, the better people see you. It also gives you more clicks and higher chances of sales.
This is also the same reason why you should prioritize advertising on Amazon instead of other platforms like Google or Facebook.
While these platforms already have huge audiences, it doesn’t have buyer intent. This lowers the chances of purchase.
Then there’s the person’s intent.
Most people browse Google with the intent of research and information. While those who search on Amazon are more intent on buying immediately.
True, Google and Facebook Ads can also generate traffic towards your page. But it’s better to maximize existing traffic inside Amazon and drive it towards your store.
The more you spend on optimizing your Amazon ads strategy, the better your sales will be.
Check out tips on why you shouldn’t fall for the Off-Amazon trap here.
Types of Amazon PPC Ads
Amazon ads can be classified into three main types: sponsored product ads, product display ads, and headline search ads.
Sponsored Product Ads
Sponsored product ads are the most common type of ads. These ads appear in search results and product listing pages.
There are two types of sponsored product ads.
One is the automatic-targeting ads that focus on keywords determined by Amazon’s algorithm.
These keywords are based on the data that Amazon collects from clicks and purchases.
And because it’s automated, the ad adjusts to better suit your listing and increase conversions.
It may be the easiest ads to set, but it lacks optimization options to make your ads more targeted.
On the other hand, manual-targeting ads are focused on specific keywords that you prefer.
This may be a more tedious option, but it lets you optimize your ads more effectively. It also may result in lower long-term ad spent if done right.
Product Display Ads
Also known as sponsored display ads, it’s a unique strategy that lets you retarget customers that previously viewed your products.
It can also target those who viewed similar products, used relevant terms, or purchased from you in the past.
Product display ads can boost your product’s details page effectively. It can even place your best products right under your competitor’s listing.
Using this type of ad can also bring more traffic to your page. It’s also great to use for increased impressions for new product listings.
And because there’s already been a previous engagement, there’s a higher chance of them purchasing your products too.
Headline Search Ads
Headline Search Ads allow sellers to promote their brands and products to Amazon sellers. It’s also based on keyword targeting and operates on a cost-per-click basis
So what’s the difference between sponsored product ads and headline search ads?
It’s all about the location and available real estate.
Sponsored product ads are located at the top, bottom, and far-right sections of search result listings.
On the other hand, headline search ads stretch across the entire top of the search results page.
Headline search ads also feature brand logos. It comes with a custom message and three distinct products.
Because it has branding elements, headline search ads can increase your visibility. Grouped products also increase profitability.
This helps you hit your target goals better, faster.
Get more tips on how to avoid costly ad mistakes here.
How to Plan your Core Amazon Ads Campaign
So how do you plan core campaigns to help secure your business success?
Our best advice: start with four core campaigns.
You’ll need to have automatic campaigns that have automatic targeting.
You’ll also need broad campaigns that have seed keywords to start. Then you’ll need a phrase campaign with seed keywords, and an exact campaign that also has seed keywords.
What are seed keywords? Here are their characteristics:
- Top ten to twenty most relevant keywords for your product
- It doesn’t include any competitor names
- They don’t have any ASINs
- These are keywords people use to find products
- The keywords make up about 99-95% of sales for the products in your niche
Check out how you can find the best keywords here.
The next thing you need to do is to set up your campaigns. And for that, we use our trusted partners at Sponsored Profit.
As a PPC firm that specializes in Amazon Sponsored Ads, their Amazon PPC tool gives us more control over your PPC.
Sponsored Profit’s naming convention makes it easier for us to communicate back and forth between companies. And their naming scheme makes things less complicated for us.
What if you already have existing campaigns? Do you have to go over them and rename all of them?
Well, you don’t have to.
Instead, you can check your Campaign Manager to see if any of your current ones look similar to these four cour campaigns.
Then all you have to do is rename it right away.
You can also see if you can rename campaigns based on the performance of a single ad group.
You can also transition existing ads to the core 4 campaigns instead.
Get more tips on how to increase your sales on Amazon and maximize ad costs here.
Conclusion
Amazon PPC is an effective and essential way to increase traffic and sales for your Amazon store.
But to be successful at it, you need to have a good understanding of its types and functions.
You also need to have a good understanding of your target market and their key behaviors. This will help you identify the right keywords to use for your Amazon PPC strategy.
What’s your biggest challenge with your Amazon PPC management? Share it with us below.
