Pay-Per-Click, otherwise known as PPC, digital marketing is the most powerful tool that digital marketers and businesses can use to get their product to a targeted base of consumers. However, you may not be familiar with PPC advertising, much less Pay-Per-Click Amazon ads.
When we are talking about PPC, we are talking about ads that are generated by a marketing platform where the advertiser pays “per click” in order to generate traffic to the website or product. These ads include Facebook ads, Instagram ads, sponsored search ads on platforms like Google Search, and display ads on the websites that we visit every day.
While there are entire courses taught on this subject at Universities, MBA programs, and digital marketing boot camps across the country, today we are going to focus on the power of Amazon PPC advertising and how it can take your business to the next level.
Amazon PPC ads are for Amazon product listings , and they allow sellers on Amazon to make their product more visible by putting the product at the top of a search result page for the keywords which that product contains, similarly to how Google Ads works when you want to be the first search result for a certain search query.
More and more sellers are using Amazon’s PPC platform to grow their business, which is making it more expensive per click. However, if you have a good PPC strategy that is targeted towards those who are going to love your product, you are going to see a positive ROI. This guide will help you get there.
If you need to know how to use Amazon Pay-Per-Click, keep on reading. This guide is going to give you everything you need to know to get started advertising your products on Amazon and generating a positive return on investment.
As we discussed, PPC stands for pay-per-click and this is an essential part of digital marketing where advertisers are paying platform each time one of their ads is clicked. The price of the click is determined by how competitive the market was for that click. Essentially, price is determined by how many other sellers and advertisers wanted to advertise to that user at the same moment.
This is different than other types of digital marketing, which are considered to be organic. Organic marketing is where you are not paying anything for that post or display, but organic marketing can be much harder to get to the right audience when everyone else is using PPC strategies. For instance, search engine optimization is organic marketing, and a good SEO strategy will get your website on the first page of Google Search. However, those who are paying for ads are still going to show up on the search query before your website does.
Determining what an acceptable cost per click depends on the conversion rate as well as the final purchase price when you are marketing products. For instance, if you are paying a penny per click to get 100 clicks, but no one converts or makes a purchase, that is a waste of $1. Conversely, if you do a well-targeted ad that costs $1 per click and that person spends $100, then it was worth the money. Getting the right balance will consist of continual optimizations and tweaks in your strategy.
A PPC campaign can be difficult to get started at the beginning. You have to research and select the correct keywords that apply to your products. Then, you have to organize those keywords into buckets, or categories, in order to create campaigns. Then, you need to write compelling ad copy that applies to those keyword buckets in order to encourage users to click on the ad and go to your product or website.
However, that’s not where it ends. There’s no use paying for clicks when you don’t have a website that’s optimized towards conversions. You will also have to spend time making sure the page that each ad lands on applies to that search query and makes sense for the user who clicked the ad so that they can get what they need quickly and easily. If your website isn’t optimized towards conversions, it doesn’t matter how well you’re targeting your ads.
As you can see, PPC can be a hefty challenge when you have never executed a PPC campaign before. However, running PPC ads on Amazon for your Amazon products is, thankfully, quite a bit more straightforward.
What is Amazon PPC?
Amazon PPC is simply a platform where Amazon sellers can pay to have their ads on the top of the page for a particular search query when buyers are shopping for a product on Amazon. There are three different ad formats available to advertisers on Amazon PPC. These three formats are Sponsored Product Ads, Product Display Ads, and Sponsored Brand Ads.
Why is PPC Important For Amazon Sellers
Amazon PPC software is important for Amazon sellers because it is the best way to increase the traffic to your product - more so than any other type of digital marketing you could do off the platform.
Amazon already has the visitors to their website that you need to puy their product. When you are running a digital marketing campaign off-site, you are going to have to get the user to the Amazon platform. Unfortunately, there aren’t many ways to tell if each user has a Prime account, an Amazon account, or even wants to shop on Amazon.
Conversely, when you are advertising directly on Amazon, you already know that each and every visitor likes to use Amazon and is open to buying your product. The majority of Amazon shoppers are Prime users, so they already are loyal and dedicated Amazon shoppers, all you have to do is show the right people your product in what is a vast ocean of different choices.
Recent studies have shown that when people are looking for a new item but don’t have a brand preference, just an idea of what they want, they start their search on Amazon, not Google. For this reason, you should be spending your advertising money on Amazon, not on other websites.
Brands are just now beginning to realize this, so don’t get left behind, now is the time to start an Amazon PPC strategy for your company so that you can increase your sales and make more money.
Amazon Pay Per Click Ad Types
As we mentioned before, there are three different types of ads that you can utilize on Amazon as a seller. Here is a little bit more information about how each one works.
1. Sponsored Product Ads
Sponsored Product Ads are targeted to users based on keywords that are relevant to the product that the seller is offering on the Amazon marketplace. These ads allow advertisers to promote individual products for particular search queries.
2. Sponsored Brand Ads
If brands want to promote the entire company, they can turn to Sponsored Brand Ads. These ads allow sellers to use a custom headline, a brand logo, and some products in a singular ad, which can encourage users to visit the Amazon storefront for that brand in order to shop all of their products.
Running this type of ad allows the seller to create a custom landing page on the Amazon website that is easily shoppable. For sellers that think that their potential customers would like to buy a few different items, such as coordinating kitchenware, for instance, this is a great type of ad to increase the number of items each buyer is buying from your brand per Amazon order.
3. Product Display Ads
Product Display Ads send Amazon shoppers directly to a product page on amazon. These are only for vendors, and you can use interest targeting for them, instead of keyword targeting. Amazon tracks what types of products each of their users likes, so it encourages them to buy products in that category moving forward, not just when they are actively searching for a particular item. This is a good way to get users to your product before they even know that they need a product like yours. It can also help capture users who have searched for a product like yours but ended up never making a purchase as they weren’t able to find something satisfactory. Maybe your product is just what they need?
How Much Does Amazon PPC Cost?
Amazon Pay-Per-Click-Cost is going to depend heavily on how much competition there already is depending on your keyword strategy or interest targeting. For categories with low competition or high search volume, it can be very very cheap. For categories that have higher competition or low search volume, it can be more expensive. However, oftentimes if you are doing more highly-targeted ads, you are going to have a higher conversion rate, so it could be worth having a higher cost per click.
The cost per click on the Amazon PPC platform is going to depend on what everyone is bidding to be there. When you set up your campaigns, you are going to give the platform your default bid, which is the maximum that you are willing to pay for every click. The highest bidder gets the top seat, the second-highest the second, and so on, and so forth. While Amazon will not always charge you your maximum amount, how much they do charge per click depends on this bidding structure. This can change every day depending on the budgets of your competitors as well as the search volume for particular keywords.
We, unfortunately, can’t tell you how much each click is going to cost for your product. Typically it is more than $0.02 per click, but less than $3. However, we can tell you that you should focus more on Cost per Conversion when you are optimizing your campaigns, and less about Cost per Click. Ultimately, quality is better than quantity here, and you want to make sure that you are attracting the buyers who are most likely to purchase your product.
How To Set Up Amazon PPC
Now that you know more about Amazon PPC, how it works, and what it can do for your business, we can finally start having fun setting up your campaigns and making your business more money. In the following guide, we are going to give you step-by-step instructions on how to set up your Amazon PPC campaign for your products.
1. Structure And Set Up Your Amazon PPC Campaign
Before you get started, you are going to want to structure your Amazon PPC campaign so you know how to proceed. For your first campaigns, you are going to want to set low daily budgets so you can get used to the platform and start to optimize towards the campaigns that have the best conversion rate and lowest cost per conversion.
Here are the steps for structuring your campaigns:
- For each product listing, you will make two campaigns. An automatic campaign, and a manual campaign.
- First, set up an automatic campaign for the products you are advertising. Let this automatic campaign run for a week or two before you make your manual campaign in order to collect data and begin getting insights.
- Now that you’ve collected data, you are going to download your search term report. This report will inform you on how to set up your manual campaign.
- Now that you are structuring your manual campaign, create three separate ad groups within the campaign. These will be different types of keywords. These three ad groups are broad match, exact match, and phrase match.
- Now, set the duration and the budget of your manual campaign. Be sure to keep it small at first, in order to make sure that things are running properly. While Amazon will always give you the lowest cost per click available, they will definitely spend as much money as you give them, so don’t think that you will have any leftover. You could, but you probably won’t.
- Set the daily bid maximum, and start collecting data for further optimization
When you download your search term report, make sure that you are looking for good long-tail keywords. Long-tail keywords are used by customers who are looking for really specific items, so if your item fits that description, you are targeting the correct people who are much more likely to convert. These keywords are going to have the highest conversion rate. Because they are so unique and don’t have a lot of competition, they also could have lower CPC, which makes them even better for sellers.
There is a free Amazon keyword research tool called Sonar that can further help you create your keyword lists. It allows you to type in keywords for your product and then you can pick the most relevant keywords from the results. They will tell you estimated search volume for these keywords so that you can identify which keywords are going to be the most valuable.
As you learn to optimize, you will find that you will give different campaigns and ad groups different budgets and max CPCs based on the keywords that are the most valuable and have the highest conversion rate. In this way, you can cast a wider net for less money, and a much smaller net for the big fish. This is a great way to create a failproof campaign budget strategy while simultaneously making sure you have all of your bases covered.
As you collect your keywords from your search term report and Sonar, you will copy and paste them into an Excel document. Once you have finished collecting all of your keywords, you can then upload the Excel document into the Amazon PPC platform so that you have them all at your disposal for starting your manual campaign.
Once your campaign runs for a few weeks, you will be able to see which keywords work very well, and which ones do not convert and simply cost you money. This is where you can optimize. It is best to reduce the bids for the poor-performing keywords while increasing bids for the ones that have the best conversion rates.
However, you do want to refrain from changing your bids too quickly. When you change your bids, you want to make gradual adjustments and then observe the changes. You likely do not want to change bids by more than 20% in either direction at any one time so that you do not negatively affect your results.
2. Optimizing Your CPC Bids On Amazon
Now that your campaigns are set up. You are going to want to continue to optimize your bids as well as edit your keyword strategy. Let’s discuss the ways in which you should optimize your bids.
- First, calculate your average cost of sale, or ACoS, for each item on your Amazon seller page. You will need to compare the actual ACoS to what your target ACoS is so that you know how you are performing vs what you want your profit margin to be. In order to figure out your target ACoS, take a look at your profit per item, and decide what is a reasonable amount to lose off of that profit towards marketing efforts.
- If you have an ACoS that is greater than your target ACoS, you will need to lower your cost per conversion. To do this, you will either need to lower bids, or retarget your keyword strategy so that you are appearing on more relevant search queries.
- If your ACoS is less than your target ACoS, then you have more budget, so you can actually raise your bids and see if you can increase sales. While a lower-than-target ACoS looks good on paper, it may mean that you are leaving sales on the table, which is actually going to decrease your profits overall.
- Now, let’s check up on your keywords. If your keywords are not getting impressions, meaning no one is even seeing your product appear, much less clicking on it, you may be in the wrong product category or your listing is not optimized properly.
- Make sure to check that you have included relevant keywords in your Amazon product listing. If your product listing does not match your Amazon PPC ads, Amazon will not give your product any ad space as it would hurt the legitimacy of its web platform. Amazon knows to keep their customers happy that they have to deliver the most relevant products to each user when they do a search, so make sure that you are doing your due diligence in assisting with that effort, not distracting from it.
- If you have keywords that aren’t generating sales even though they are getting impressions and clicks over a long period of time, first try to bid down on them. If they are still remaining unprofitable, then you should remove that keyword and consider adding it to your negative keyword list, which we will discuss more in-depth.
3. Optimize Your Listing
As we mentioned, it is important that your listing matches up with the ads that you are running for all of your products on Amazon. If your listing isn’t also a great landing page for clients, they aren’t going to convert. This means that you shouldn’t be spending money on ads, and instead need to focus on updating your listing.
Like we discussed in our intro to PPC advertising above, your landing page is crucial to getting your customers to convert. For Amazon ads, your landing page is your listing page. Here are some of the things that you should do in order to make your listing page one that converts clients:
- Invest in great imagery that is clear, aesthetically pleasing, accurate, and makes people want to buy your product
- Ensure that your ad copy is straightforward, grammatically correct, and easy to understand
- Make sure that you are including all of the relevant information that clients want to know when they are purchasing your product. A good way to determine if you need to add more information is to take a look at your messages from customers in the Amazon chat interface and see what types of questions you are seeing time and time again. While some of your customers have asked you these questions, the reality is that most of them are going to move on to a competitor’s product before you even have a chance to give them the right answers, so it’s important that you give them what they’re looking for right away.
- Utilize the space that amazon gives you when you scroll down to include engaging infographics, imagery, and further information. You should also highlight the most amusing and relevant reviews that praise your product in order to highlight what other customers love about it.
- Finally, make sure that you are including all relevant keywords in the copy on your listing page. This will help your ads run better as well as give you more organic traffic that you don’t even have to pay for.
4. How To Set Up Ad Groups And Choose Keywords
Now that you have the basic steps towards creating campaigns for Amazon PPC that are going to increase your sales and drive revenue growth for your company, you may be wondering how to choose the keywords for your three different ad groups for your manual campaign. Thankfully, we’re here to show you how to do just that.
Let’s discuss the three different types of keywords so you know which keywords to put in each of your three ad groups.
- Broad Keyword Match
Broad keywords are search terms that are related to your keyword, not just ones that match it exactly. This helps you capture users who search for words in orders that you did not expect or have used misspellings or other errors that you wouldn’t be able to predict in order to include them. This also helps cover synonyms and other variations of the keywords you have entered.
Broad match keywords allow you to achieve higher visibility and more impressions for the keywords that you are targeting. However, these can be more expensive to run as an ad group because you are going to generate a lot more impressions and thereby, a lot more clicks. Unfortunately, broad match keywords are also the keywords that are the most susceptible to getting clicks that aren’t high-value and less likely to lead to a conversion, so broad match keywords can have a very high cost per conversion.
If you are struggling to get visibility for your listing, a broad match is a great way to get more visibility. You can always test broad match keyword campaigns or run them for short periods of time in order to increase visibility and brand awareness, and then let your more specific keywords take over as users begin to remember your product and look for it specifically.
This usually means higher visibility and sessions for these keywords, as shoppers can use a broader combination of search terms to trigger your ad. Once you run a broad match ad group, you will be able to analyze the data and see if any new interesting search queries appeared that you would like to add to your other keyword groupings.
- Phrase Match
A phrase match group is one where you are specifying phrases and keywords are matched with it before and after. A phrase match allows you to control the order of words when someone types them, so you can stay away from search queries that have similar words but different phrasing resulting in entirely different intent behind the searches
When you use phrase match, it is only going to display the ad when your search term is the same as the keyword. However, additional words can be added before and after each keyword.
Essentially, when you are using phrases for phrase match, the phrase must be in the search query, but other things can be in the search query as well in order for your product to show up as a sponsored ad.
This a mid-funnel targeting method that can be triggered by both highly specific search terms as well as broader phrases. This type of keyword group will still give you a lot of visibility for your product but is going to decrease the traffic overall. However, when you limit the number of clicks to a more targeted group, you are going to be paying for more highly-qualified traffic, which can help you decrease your cost per conversion.
This is a good middle of the road option for those that are finding that broad match is too broad but they aren’t getting any impressions with exact match.
- Exact Match
Speaking of exact match, let’s talk a little about how this keyword group behaves. Exact match displays your product only for the exact phrase and keywords that are being searched for. This allows you to target only the customers who are looking exactly for what you have to offer. These will be the most qualified clicks that are the most likely to lead to conversions as long as you are using the right exact match keywords.
When optimizing exact match, it is very important that you are getting rid of keywords that are expensive but do not result in conversions regularly, because for whatever reason those clients were not actually looking for what you have to offer. It is important to remember that showing your product to people that won’t want your product is a waste of your time and money. Instead, use exact match to deliver your product to the attention of customers who are looking exactly for what you have to offer.
While exact match is definitely going to limit your impressions and clicks compared to the other types of keyword groups, it has the potential to dramatically increase your sales and decrease your cost per conversion if your keyword strategy is on-point and continually optimized.
Using an exact match ad group is also a good idea for those who have severely limited advertising budgets. If you don’t have much to work within the way of budget, an exact match is going to ensure that you are only paying for the most qualified leads, and nothing else. On the flip side, when you have small budgets, broad match is very much not recommended.
5. Begin Using Negative Keyword Lists
Now that all of your campaigns are set up, you are going to want to make sure that you are always optimizing. One of the ways to optimize is by setting a negative keyword list and periodically updating it.
To do this, over time, look at the search terms that are generating clicks but no conversions. These terms are costing you money without making any. In order to avoid that, you need to add them to the negative keyword list.
The negative keyword list disallows your product from appearing as a sponsored post for that specific search query. However, it can still appear organically. This ensures that you aren’t spending money on keywords that aren’t perfectly suited to your product.
When you are going through this process, you are going to want to remove the following types of keywords:
- Irrelevant search terms that do not apply to your product
- Unprofitable search terms that may seem relevant to your product but have not generated any conversions over a long period of time
Once you do this, negative keywords will help you decrease your cost per conversion which will help you achieve your business goals.
6. Optimize Bidding Strategy
While you won’t want to start off by doing this, once you are running successful campaigns, you always want to push the bar in order to get more conversions at lower costs. This will help ensure that you are consistently improving your sales, not just staying stagnant.
A good way to do this is to optimize your bidding strategy for your keywords. While there are many different strategies to go about this, here are some straightforward steps you can take to ensure that you are bidding at the appropriate levels for each of your keywords.
- Bids for keywords with high cost per conversion should be lowered.
- Bids for keywords with good cost per conversion should be increased if there is room to do so in your margins.
- Bids for keywords without conversions should be reduced or the keyword should be paused entirely.
- For keywords with no impressions, first make sure that the keyword is mentioned in your product listing so that the keyword isn’t flagged for quality and thereby not displaying. If it’s in your product listing, increase the bid while watching it carefully to make sure that it doesn’t spend too much money.
It is important to remember that you need to allow time for your campaigns to run and collect data before you start doing bid adjustments, and also in between bid adjustment changes, to make sure that you are collecting enough data in order to be able to have a large enough sample size in order to properly analyze it
We recommend waiting a few weeks for your initial campaigns to run before you start diving into the nitty-gritty of bid strategy. Then, once they have generated some data, start making some benchmarks to work towards.
Once you have started adjusting bids, you should wait about once a week before you do so again. However, you should check your data every day if possible to make sure that nothing is spending like crazy and that everything is running properly. Obviously, if a campaign, ad group, or keyword is really hurting your bottom line, then you need to remove or pause it. This is always okay to do.
When it comes to bidding adjustments, however, you really need to give them some time in order to be able to properly analyze what the actual result of your changes was for the keywords that you edited.
7. Set Up Reporting
For our final step, you will actually be getting more into Amazon PPC management and what an Amazon PPC agency does. Reporting.
Reporting is important for a few reasons. First, it is going to help you keep track of your progress which leads to better optimizations and results. Secondly, it is going to help prove to key stakeholders in your company that your Amazon PPC strategy is working, or to make a case for investing in some Amazon PPC tools for your organization that can help you make and manage better campaigns.
When setting up your reporting, whether you are doing it in Google Sheets or Excel, you are going to want to make sure that you are using the key performance indicators that are relevant to your company as well as to the campaign work that you are doing in Amazon.
For product marketing, this is generally pretty straightforward. These KPIs are going to be what we have already discussed here today. As a refresher, these are:
- CPM - Cost per 1,000 Impressions
The CPM is a benchmark for impression generating which can help you track brand awareness. The “M” stands for “mille” which means 1,000. Cost per impression is generally very low, so looking at cost per 1,000 impressions is a better way of looking at it.
- CPC - Cost per Click
After an impression comes a click. A click is when someone clicks on your ad and makes their way to your product page.
- Cost per Conversion
Your cost per conversion is how much you spent on Amazon PPC ads divided by how many conversions you received in a particular period.
Finally, you are always going to want to keep track of how much you spent in a given time period, so knowing your overall budget and how much of it you actually spent is very important to include in your reporting.
When you are making your report, the best thing to do is to make automated reporting that shows key performance indicators as scorecards, and also have charts and graphs that show changes over time
Also make sure that you are looking at your metrics not only for your entire effort, but also for each campaign and ad group. When you “drill down” in this way, you are able to determine which efforts need the most attention, and which ones should be expanded and given more budget. When you only look at the big picture, you aren’t looking at the areas where you need to improve
In reporting, it is also nice to show what the top converting keywords were so that key stakeholders at your organization get a sense of what users were originally looking for when they decided that your product was the perfect product for their needs.
Amazon Ad Revenue
Amazon Ads on the Amazon platform do not generate revenue for people the way that Google Ads that display on websites do, unfortunately. Another example of this is the Ad Revenue that people make when they have youtube content that gets a lot of views.
Because Amazon ads are ads that run on Amazon for products that are sold on Amazon, there is no Ad revenue to be had.
However, Amazon itself is making plenty of money off of the ads that they run on their own platform. In Q1 of 2020, they made $3.9 billion in ad revenue despite concerns over COVID-19, which was over a billion more than they made in Q1 of 2019.
Amazon PPC Software And Tools
If all of this sounds like a lot to manage on your own, you’re not alone. Plenty of people have difficulty setting up and optimizing Amazon PPC campaigns. Thankfully, there are plenty of tools and software available for you to better manage your Amazon PPC campaigns more effectively.
Seller App is a tool that was designed for Amazon sellers. It can help you reach your target ACoS by automatically combing through campaign data. It will help you increase your ad ranking by bidding on the keywords that are being searched for by the users most likely to buy, which will greatly help your optimization strategy.
PPC Scope is a management program that allows you to optimize your campaigns using easy to understand charts that show you the big picture of your efforts and history to date. Their innovative analytical tools help show both the strengths and flaws of your campaigns and can help you determine what your best keywords are and which ones are worth getting rid of. If you want a hands-on approach but want easier to access and understand data in order to make the most decisions, PPC Scope is going to be a great choice for you.
Sellics offers an Amazon PPC management system that helps you to analyze and track your Amazon PPC campaigns. It features user-friendly and useful charts that aren’t hard to understand. They offer automatic keyword alterations in order to optimize your keyword strategy. They pause keywords that aren’t working, and add the worst ones to your negative lists. They will give you historical data in charts and trackers that allow you to garner quick insights and make the best decisions for your future strategy.
Amazon PPC campaigns are one of the best ways to get views of your product and sell to more people. If no one can see your product, then you can’t sell it.
However, there’s more value to it than that. The data you collect can help inform if you need to update your listing, imagery, or overall business strategy in order to reach your business goals. For instance, if you are getting plenty of clicks but no conversions, your imagery is probably great but you aren’t including enough relevant info for users to choose your product.
Another example, if you are getting plenty of impressions for the right keywords, then your listing copy is optimized but maybe you need a better image for your product because the current one isn’t encouraging users to click on it. Or, you need a more clear and specific product name that isn’t as stuffed with confusing long-tail keywords.
Now that you know more about Amazon PPC campaigns and how they can help your business, you are ready to make your first automatic campaigns and start generating data!
How to price your product for PPC amazon?
The price of your product is based on the manufacturing, listing, shipping, and advertising costs and your intended profit margin. For your Amazon PPC ads for your product, you will see recommended bids. Those bids will be what you start with, and then you change them based on new data on a weekly basis.
Is Amazon Advertising Worth It?
Yes, when done correctly, advertising your product on Amazon can help increase your sales and help you reach your business goals.
How To Get Your Amazon Ads To Rank Higher
To rank higher, you can do a few different things:
- Identify new keywords with less competition that you can bid on
- Increase your bids so you out-bid the competition
- Double-check that your listing includes all of your keywords so that you don’t get dinged for quality issues
Where do Amazon PPC ads appear?
Amazon PPC ads appear throughout the Amazon website in browser, mobile app, and more. For the ads we discussed here today, they appear as the top results on search queries when someone is looking to buy a product. Other ads can appear on other parts of Amazon’s website.
Who can use Amazon PPC ads?
Sellers and agencies working on behalf of sellers who have listings on Amazon can use their PPC ads. They also have ads available that go off-site, but those do not run through the self-service platform and you must instead contact advertising sales for Amazon.
Does Amazon PPC improve my organic rankings?
When your listing gets more clicks and more traffic, that will improve your organic rankings. Also, if you use your PPC data to optimize the copy on your listing, that will also help you improve your organic rankings.
How does Keyword Targeting for Amazon PPC ads work?
Keyword targeting is where you choose keywords that people searching for a product like yours would type in. This allows your ads to show up to people who need something that you offer - so it is thereby one of the best types of advertising you can do.