In 2020, more than 8.9 million sellers on Amazon are going to great lengths to get their product ranking on the very first page.
So-called “black hat” tactics (strategies with malicious intent) that go against Amazon’s ToS are widely used, but the consequences of being caught using these strategies are deactivation.
This, in conjunction with the competitive nature of selling on Amazon, has increased the baseline cost of PPC campaigns.
The good news is, Amazon advertising is a fully compliant way to launch your products and scale your revenue.
The platform offers a host of advertising options for you to win customers, make sales, and get ahead of the competition. And this is not just limited to keyword optimization.
In this blog, we’ll help you get beyond the auto campaigns, dial in your Amazon PPC strategy, and, hopefully, turn those empty clicks into sales!
An Overview of Amazon PPC
Amazon PPC is a form of advertising where you pay a specified fee to Amazon when a buyer clicks on your ad (pay-per-click). You are then charged for each click your product listing receives.
Amazon PPC will give your product visibility appearing at the top in the search results of any query you are targeting.
This happens in the form of an Amazon sponsored listing, which stands out among the organic results.
This guide will be focused on the Sponsored Product ad type, which is the most commonly used ad type. The other ad types are Sponsored Brand ads and Sponsored Display ads.
Now that you have a basic understanding of Amazon PPC, let’s get more granular.
Should You Use Amazon PPC?
Amazon PPC can be extremely effective but it’s not for everyone and not always right for every product or seller.
Here are some things you should consider before deciding to run PPC ads:
- Your brand rating
- Your product ratings
- Your product potential (if it’s a new product)
- Your margin and Cost of Goods Sold (COGS)
- Your monthly marketing budget
- The competitive nature of your niche and target keywords
- The quality of your product listing and uniqueness of your product
- Your price point and ability to compete with low priced competition
If you’re in good standing with the above items, chances are you’ll be able to at least test the water with a campaign and see how it affects sales and your overall profit.
You can do some estimation ahead of time but ultimately creating, running, and optimizing campaigns will give you the metrics you need to determine effectiveness.
The great thing about Amazon is that it’s specifically a shopping platform. Unlike Google Ads which serves many different purposes. Search intent on Google is not always clear and shoppers may not be ready to buy (higher in the funnel), so conversion rates are much lower.
On Amazon, conversion rates are high because people are ready to buy (lower in the conversion funnel). That makes it a great place to spend advertising dollars.
How Much Does Amazon PPC Cost?
Amazon PPC costs range widely depending on competition, product, and search volume.
Bids range from pennies up to several dollars per click. Compared to Google Ads, it’s much cheaper in general.
You’ll want to have a daily budget of at least $10 per day in order to effectively assess the viability of a campaign.
Unlike other platforms, more money per day does not necessarily mean more results. There is a limit for each product and circumstance that you may find.
The reality is, you only spend when people click and there are only so many people searching and clicking.
Start off with a modest budget that is manageable and assess the results of your campaign and decide whether or not to increase your budget.
As mentioned, you will likely find a ceiling – once you do, any additional revenue may only come from investing in new products.
Best Amazon PPC Strategy for 2020
Ready to take your Amazon PPC ads to the next level? How about trimming costs? These hands-on tips will help you do exactly that.
Here are the Cliff’s notes, details below:
Step 1: Create the Best Possible Product
Step 2: Acquire Product Reviews Before You Launch PPC
Step 3: Optimize Your Product Listing for Maximum Effectiveness
Step 4: Start with your Best Organic Sellers First
Step 5: Group Variations to Increase Revenue and Decrease ACoS
Step 6: Structuring Your Campaigns
Step 7: Think Beyond Auto Campaigns
Step 8: Use Manual Campaigns with Phrase and Exact Match
Step 9: Use Keyword Research Tools to Find Strong Long-Tail Keywords
Step 10: Analyze Competitor Products to Uncover Effective Keywords
Step 11: Prioritize Your Most Effective Keywords
Step 12: Extend the Effectiveness of Your Budget (Decrease ACoS)
Step 13: Set Negative Keywords
Step 14: Optimize Ad Placements and Bidding Strategies
Step 15: Shift Advertising Dollars or Stop Ads Completely
Step 16: Build a Flywheel (Compounding Campaign)
Create the Best Possible Product
Before you start anything, you have to make sure you set yourself up for success.
Whatever you’re thinking about creating, study the competition and figure out how to set yourself apart.
Amazon can be insanely crowded and competitive – only the best of the best will rise to the top.
How will you set yourself apart? Make something unique and desirable. Creating a product that looks exactly like everyone else won’t cut it.
Acquire Product Reviews Before You Launch PPC
Product reviews are massively important on Amazon. Not only for buyer social proof but to improve rankings. The more 5-star reviews, the better.
Launching a PPC campaign without reviews could be a huge mistake, especially in a competitive niche.
We recommend getting a minimum of 5-10 reviews before embarking on a PPC campaign.
Reviews will directly affect organic and paid CTR, positioning, and conversions.
Reviews can be tricky to get at first since it’s a bit of the chicken and the egg situation but there are some common and proven strategies like using product inserts to encourage reviews of your products.
Optimize Your Product Listing for Maximum Effectiveness
Creating a standout product is a great first step but your Amazon listing has to be just as stellar to perform well.
Product optimization can include:
- High-quality imagery
- A product video
- Product overview illustration
- Catching (optimized) keywords in title
- Logical product variations
- Keyword and user-optimized bullet point descriptions
- High-quality product description
- Complete and detailed product information
- Answers to customer questions in the Q&A section
Completing these items not only improves the shopper experience but also improves your SEO which will rank you higher organically.
Start With Your Best Organic Sellers First
If you’re already selling on Amazon, a good indicator of a successful PPC product is if the product is already selling well organically.
A successful PPC campaign will only continue to buffer the products’ organic sales – which creates a compounding sales generation effect.
Group Variations Together to Increase Revenue and Decrease ACoS
If your product has variants like color or size, you’ll want to group these products into one instead of selling them all separately.
This is a proven effective way to increase sales by offering options and potentially upselling or bundling products together.
By increasing conversion rates on this single listing, you reduce the ACoS for that campaign and boost organic rankings.
Structuring Your Campaigns
Campaign structure is important to your success on Amazon PPC.
For each product, you can create a manual campaign and an automatic campaign.
The automatic campaign will be run first, in order to collect keyword data. We suggest running this campaign for 1-2 weeks before launching your manual campaign.
Exact match and phrase match keywords will go into your manual targeting campaign while your auto campaign is “searching” for new high-quality keywords.
This structure allows you to discover new high performing keywords with the automatic campaign via the search terms report. You then place them as exact match and phrase match (high converters) into your manual campaign.
Inside of your manual campaign, you will have your ad groups for both exact match and phrase match keywords. This allows you to have additional control over each.
Think Beyond Auto Campaigns
Many advertisers turn to auto campaigns in the hope that they will start ramping up their product sales.
Auto campaigns are an important part of your PPC strategy, but relying on them alone won’t get you maximum sales volume.
You’ll also want to be taking advantage of manual advertising, which works in tandem with the auto campaigns.
The best thing about manual ads is that they allow for more concise targeting. You’ll easily be able to pause low-performing keywords and adjust bids.
Use Manual Campaigns with Phrase & Exact Match
Manual campaigns are really where Amazon PPC shines and the optimization techniques you learn can help drive down ACoS and increase revenue.
With manual campaigns, you can easily target only your most effective keywords and dial in your strategy.
Remember to run your auto campaigns firs to gather data, then create the manual campaign to refine.
Use Keyword Research Tools to Find Strong Long-Tail Keywords (Then Go Broad)
Keyword research is extremely important to the effectiveness of your PPC campaigns.
There are a lot of places to look for keywords and while a keyword research tool isn’t fully necessary, if you’re serious about Amazon you’ll want to invest in one.
With keyword research, your first step should be to ideate search terms you would use to search for your product. From there you can head to JungleScout and use the Keyword Scout tool.
Enter in your key phrase and you’ll get a huge list of related terms in return along with data.
The goal here is to get a general understanding of the market and search intent but you can also start to gather some keywords that you’d like to target.
When you’re first starting out with Amazon PPC, it’s best to start with longer-tail keywords (less competitive) and move over time to more broad, higher-volume keywords.
You won’t be able to compete on the broadest terms right away. Not only that but long-tail keywords often indicate a user is closer to converting due to the specificity of their query.
You can safely rule out single word keywords in this case.
Take a look at 30 and 90-day trends as that may impact your decision to target a term or not.
You won’t need more than 30-50 keywords per campaign – in fact, you’ll typically find only a small group of keywords you target end up being extremely effective.
Make sure to run your auto campaigns first for 1-2 weeks and collect keyword data from there as well. This will help further back up your keyword research from JungleScout and confirm your targeting or help expand your list.
Analyze Competitor Products to Uncover Effective Keywords
Effective keywords aren’t a secret and that’s something proven by your competitor’s successful products.
Keywords they are using in their listings can reveal important and high-converting terms.
Using the Keyword Scout tool you can actually plug in a URL or ASIN of any product and you’ll be given a list of keywords that your competitor product is ranking for.
Prioritize Your Most Effective Keywords
When starting with your Amazon PPC ads campaign, you’ll be required to enter search terms that correspond with each product.
We suggest starting with an array of keywords based on your keyword research, then over time, you’ll narrow your keyword portfolio for each product to just a small handful of highly effective terms.
Deciding to pause a keyword can be a tricky decision and will need to be based on your own budget, product, and flexibility.
We suggest auditing keyword effectiveness after 10 or more clicks on the given keyword have been made and only pausing after 20 or more clicks with no conversion.
If a keyword has 20 clicks and 0 purchases, it’s likely time to pause that keyword and potentially add it as a negative keyword to your campaigns.
Extend the Effectiveness of Your Budget (Decrease ACoS)
One of the variables that you fill in your Amazon product listings is daily spending.
If you exhaust your ad spend early in the day, you’re losing out on potential sales. You’ll possibly need to raise your advertising budget for the day, but that doesn’t really address the whole problem.
You need to evaluate your daily spending to see which keywords attract clicks and which keywords are actually converting clicks to sales. When working on your PPC strategy, always remember:
- Clicks take up a portion of your budget (what you’ve successfully bid to get the keyword), and you incur a loss when they fail to convert.
- Impressions are free and can help boost product and brand awareness, but they’re only of the first step of the shopping process.
- Conversions boost organic ranking and since this is how you make revenue, it is obviously the most important metric along with ACoS.
With that in mind, go through the Search Term report to know where your clicks come from.
Once you’ve figured out how and where your money was spent and which keywords bring the most bang for your advertising strategy, then you’ll be able to make alterations where necessary.
This will enable you to lower wasted ad spend, and ultimately, you’ll get to shift your budget (and focus) to bidding high-converting keywords.
Set Negative Keywords
Depending on your targeting, match type, and keywords, campaigns can display your ads on search terms that don’t relate to your Amazon listing or don’t convert.
Fortunately, you can raise the algorithm’s effectiveness by instructing it as to which keywords to avoid showing on your PPC ads.
Be cautious with negative keywords and only implement them when you’re certain they’re needed. Always check the data to ensure the keyword is not valuable to you.
We suggest setting negative keywords as exact match so that you avoid filtering out any other important search terms.
Setting negative keywords will help improve your ACoS (Advertising Cost of Sales) and create a more effective campaign.
Optimize Ad Placements and Bidding Strategies
Your campaigns can be further optimized by selecting which ad placements to target or not target and the bidding strategy you choose.
For ad placements, the 3 options are Top of Search, Product Pages, and Rest of Search. You will be able to see data for each and can adjust bids or completely exclude data as needed.
For bidding strategies, there are 3 options: Dynamic bids – down only, dynamic bids – up and down, and fixed bids.
In most instances, dynamic bids – down only will be your best option. This way your bids will be automatically lowered if you aren’t likely to win the conversion.
Shift Advertising Dollars or Stop Ads Completely
With Amazon PPC you’ll need to stay alert and stay on top of your campaign performance.
Often you may need to shift your daily budget around to other campaigns as you receive data feedback.
Sometimes for various different reasons based on one or multiple variables, you may have to completely stop PPC on a product.
It’s better to allow a product to perform well organically without spending advertising dollars and put that unspent ad spend into a higher-performing product or a new campaign.
Build a Flywheel (Compounding Campaign)
Once you have all of this in place and you’ve built an efficient system of optimization, you are beginning to create a flywheel system.
This is a system that provides momentum to the engine (your Amazon account) and thereby powering itself through continued success.
Success breeds success in this way. Once you have a few products in your flywheel, it becomes easier to introduce new items and continue generating increased revenue.
Amazon PPC Case Study
Rootsi is a lifestyle retailer specializing in eco-friendly bamboo home goods and accessories that wanted to leverage their e-commerce presence through various sales channels and strategic ad campaigns.
Nomadic Marketing embarked on a mission to drive revenue for Rootsi through Amazon PPC from the ground up.
We performed keyword research, competitor research, and optimized listings to prepare our campaigns. We also built a fully optimized e-commerce website to further back up and enhance the brand.
By following the Amazon PPC strategies outlined above we were able to build a streamlined multi-channel fulfillment system to generate $51,000 in 8 months at a 42.06% ACoS.
How Long Does it Take for Amazon PPC to Work?
If you’re starting from scratch with a new Amazon Seller Central and brand, it could take several months to really start bringing in revenue efficiently.
The startup process can be tedious due to factors like acquiring reviews and collecting keyword data.
If you are already an established seller and have a product selling well organically, you may find PPC success quite quickly.
Although building an efficient and profitable campaign may still take weeks as you tweak and adjust your approach.
You now have the top tips to help you with your Amazon PPC strategy in 2020.
As you can see, there’s a lot of trial and error here, but with some consistent effort and awareness, you’ll be well on your way to converting those clicks to real sales and build a solid flywheel system.
Optimizing your Amazon PPC ads consistently is the key to success.
Do you want to run Amazon PPC but don’t have the time or resources? We can help! Talk to our Amazon PPC experts today for a free consultation.