What are Amazon PPC Ads?
Amazon PPC ads are advertisements that are often within Amazon’s ecosystem such as amazon’s SERPs (Search Engine Results Page) and product pages which are expensed by third party vendors. These ads are created in the backend of Seller Central, Vendor Central and Amazon Marketing Services.
These amazon ads are priced at Pay Per Click (PPC). The model works on a bidding model where the ads of the sellers with the highest bid are shown to the customer. When the customer clicks on the sponsored ads and views the product for sale then the seller is charged for the click.
PPC is calculated at cost per click which is different from PPM. PPM is an impression based model where the advertiser would pay for every 1,000 people that sees the ads vs those that click on the ads.
Where do the Sponsored ads show on Amazon?
- Amazon SERPs
- When customers enter their search query into the search bar; depending on device either mobile or desktop. The ads appear on top of the page, bottom of the page and between other search results.
- Headline Ads
- These headline ads appear on top of the SERPs in desktop view and occasional show up in related product pages on mobile view
- Email Retargeting
- These e-mail campaigns are by amazon which targets to perspective amazon customers that have shown interest in your product based on related search terms
- Off-Site Marketing
- These are ad campaigns that are displayed on other websites across the internet that are a part of the amazon affiliate program. This also includes Facebook retargeting and Google Adwords
Advertising on Amazon is the best way to get your products in-front of sellers ready to buy. Customers are discovering your product through Amazon’s brand. Even if you choose the best product with the highest margins and low competition, you will need a way to get your products in front of you customers
Another benefit of using Amazon PPC is that it signals to amazon’s search algorithm which keywords are relevant to your product. Since amazon’s algorithm uses relevancy score to show products that customers want and has the highest chance of sale. The more sales you make from Amazon PPC, the higher you will rank organically for words you may not be bidding on.
What influences organic ranking?
Amazon’s developers like to keep the secrets of the Amazon algorithm under wraps, what many sellers do know that there are major factors that rank on Amazon.
- Sales Velocity/Conversion Rate – The more sales you make vs impressions on your listing will have a better chance in ranking higher on the Amazon SERPs
- Relevancy – The more sales that are made on keywords related to your products signals to amazon that your product is relevant. Amazon wants the customer to close the sales as soon as possible which factors in which products to put in front of them.
- Click through Rate – Ads with high CTR will be shown more frequently as Amazon will make more through ads revenue and being able to offer more variety to customers.
How do I make money with Amazon PPC?
Amazon PPC is great to increase the volume of product sold on Amazon. You may find with Amazon PPC your margins may be reduced, however you can see a big lift in volume and profit to make up for initial margin. Amazon is one of the biggest ecommerce in the world and the best way of making money is to sell as many units as you can.
How much does it cost to use Amazon PPC?
Because amazon uses a bidding system for pay per click, each keyword has a different cost to each click. For longer exact keywords like “red left training wheel for bicycles” will have a very low cost ($0.10), while a keyword with lots of competition like “power bank” will have a high cost ($5.00). The price is dependent on what the market sets the price at.
When you start a campaign you can put your maximum bid amount for each keyword. The bid price you set will determine where you are shown to the customer. If you have a high bid, you will rank on the top of search results where a low bid might rank you on page 8-9 where you will not get as many impressions.
How do I determine PPC costs in advance?
There is no for sure way to get the exact cost until you actually have the product on Amazon and create the campaign. But here are some factors to consider when looking into PPC
- Product Research – Find a category and niche of products with low competition and lots of keywords. The more competition there is the higher the keywords other sellers will bid up the price
- High Margins – Products with higher margins have more room to profitably increase their advertising costs. Products with low margins will have a harder time to compete profitably when more competition enters the market as the bid costs rise.
- Create a Test Product – This is an out of the box way to test for potential PPC costs. You can list similar products on Amazon for sales on other people’s product listing. Price the product higher than what they are selling for and create an advertising campaign for that product. You can get a good sense of how much each click would be priced at and from there determine if that product is worth selling on Amazon.
- Create a product listing on an existing product
- Create an automatic campaign and see which keywords that are automatically generated
- Focus on long tail keywords that have more than three words. They usually have less traffic than the main keywords and are more profitable as customers are more specific in what they’re searching.
What is Long Tail?
Long Tail keywords are those three words or more phrases which are very specific to what the customer is searching. Usually the customer uses highly specific phrases which then to target what they are exactly looking to buy. Amazon PPC is a lot cheaper for long tail keywords vs main keywords.
In the end most of your money will be made targeting the long tail keywords. As more competition sells on Amazon, the high cost keywords will eventually reach a point where it is unprofitable to advertise.
How does payment work for Amazon PPC?
Your advertising PPC costs are added to your seller central balance and can be deducted from your payment every 2 weeks or deducted from your credit card on file.
Amazon PPC Strategy: Starting an Amazon Ad Campaign
- Create an automatic ad campaign.
- Let your automatic ad campaign run for 7-21 days.
- Generate a keyword search terms report.
- Add Negative Exact Keywords that are irrelevant
- Add Negative Exact Keywords that have a CTR below (0.2%)
- Add Negative Exact Keywords with extremely high ACoS
- Let your automatic ad campaign run for another 7-21 days.
- If your ACoS is still extremely high, lower your default bid
- Let your automatic ad campaign run for another 7-21 days.
- Start a manual ad campaign.
- Create an ad group called “Broad”. Take any Keywords that resulted in a sale and add them as broad keywords. Put the bid about 25% higher than the automatic campaign
- Continue your automatic campaign and let your broad ad campaign run for another 7-10 days.
- Add Negative Exact Keywords with low CTR and irrelevant keywords
- In your manual ad campaign:
- Create an ad group called “Phrase”. Add the best performing keywords from your broad campaign. Put the bid about 25% higher than the broad manual campaign
- Continue your manual campaign run for another 7-10 days.
- Create an ad group called “Exact”. Add the best performing keywords from your phrase campaign. Put the bid about 25% higher than the phrase manual campaign
At this point you should have a bunch of negative keywords in each ad group and now manage keyword ACOS through bid adjustments.
You will notice that a lot of the terms on the search report are other seller’s ASINs. These are your competitors. Don’t add them to your keywords. Research there listings and see which keywords they are targeting and which keywords are profitable.
If you get sales from other ASINs keywords, this means that someone went to your competitors’ listings and decided to buy your product instead of theirs. This is because your product appeared at the bottom of your competitors’ listing.
When the ASINs are found as non-producing words that means the customer liked your competitors’ products more than yours. Research their listings and get ideas to improve yours.
Amazon Advertising can be overwhelming and frustrating if you don’t know what you are doing. Some sellers aim to have here ACoS % at their breakeven margin. PPC helps boost the organic sales and helps with ranking for their main keyword. Other sellers aim for more long tail keywords and avoid the expensive main keywords. It’s important to have an overall strategy going into PPC Campaigns instead of picking and guessing which keywords convert best. It can take at least 90 days to get a profitable campaign going where costs are manageable.