There's no better place to advertise your product than Amazon, where over 300 million active users are waiting to make a purchase. If you are or have been an Amazon seller, you must be familiar with Amazon PPC advertising.
Amazon PPC (Pay-Per-Click) has become a critical tool for brands aiming to enhance product visibility and drive sales in today’s e-commerce field. As more sellers flock to the platform, standing out can be challenging. Read on to learn more about the essentials of setting up a Sponsored Product Campaign, ensuring you utilize Amazon PPC marketing effectively for your business growth.
What is Amazon PPC?
Image source- Amazon
Amazon PPC marketing assists businesses and sellers in increasing online product sales. It helps sellers create advertisement campaigns for their goods. Additionally, Amazon charges the merchant a tiny fee each time a potential consumer clicks on the advertisement.
How do PPC ads on Amazon work?
Before delving further into Amazon's PPC marketing, it is important to understand its operation and the principal terminologies and attributes of PPC.
This is a summary of how Amazon PPC functions:
A customer searches for "lunch box" on Amazon.
Amazon compiles all of the pertinent advertisements for the term "lunch box."
The highest bidder wins the auction when sellers place bids using the keyword.
The top search results and product detail pages on Amazon have the winning Sponsored Product advertisements.
The merchant is required to pay Amazon a small fee when a customer clicks on the advertisement.
Cost-per-click (CPC) mechanism and its importance
Let’s find out how the CPC mechanism works and why it is important for running a successful Amazon PPC campaign:
The cost-per-click (CPC) model is fundamental to Amazon's PPC marketing.
Advertisers bid on keywords, and Amazon charges them only when someone clicks on their ad.
This system allows for better budget control and the ability to focus spending on ads that attract actual shoppers rather than just impressions.
Why is PPC important for Amazon Sellers?
Now that you understand Amazon ads let’s understand why they are important for your Amazon business.
As more and more consumers are shifting their shopping activities online, e-commerce giants like Amazon and its sellers have immense opportunities to grow their revenue. However, the growth potential also brings together the problem of visibility.
Since Amazon is a retail platform, users coming here are actively looking to make a purchase.
But, if they don’t find your product on the first page, 45% of buyers say they wouldn’t bother scrolling through the rest of the pages.
Amazon PPC- Terms and Features
You should monitor the following important Amazon advertising metrics:
ACoS: This metric assesses an Amazon PPC campaign's effectiveness. It is a proportion of revenue from ads to attributed ad cost. For instance, your ACoS will be 25% if you spend $5 on advertising and receive $20 in attributed sales.
ACoS=Total Ad Spend/ Total Ad Sales*100
Impressions: Ad impressions are the total number of times customers see your PPC advertisement, whether or not they click on it.
Clicks: Clicks are nothing but the measurement of times that buyers have clicked on your advertisement.
Click-Through Rate(CTR): The ratio of click-throughs to ad impressions is called the click-through rate, or CTR. Your CTR will be (1/100)*100 = 1% if your advertisement receives 100 impressions and only one buyer clicks on the ad.
CTR= Total Clicks/Total Impressions*100
Cost Per Click (CPC): The price sellers pay Amazon each time a potential customer clicks on an advertisement is known as the "cost per click" (CPC). For PPC advertising, the cost might vary from $0.05 to $10 per click.
Attributed sales: The total quantity of purchases that come from clicks on your adverts over a given period of time is known as "attributed sales." It may take up to 48 days for the sales data to appear in the report.
Types of Amazon PPC Ads
Amazon offers a variety of PPC (Pay-Per-Click) ad types, each designed to serve different marketing goals. These ad types help brands and sellers increase visibility, drive sales, and build customer loyalty.
Sponsored Product Ads
Sponsored Product Ads are the most commonly used Amazon PPC ad format. They appear in prominent positions, such as search result pages and product detail pages, helping sellers increase visibility for individual products. These ads target specific keywords or products, allowing advertisers to bid on search terms that potential buyers are using. SellerMate.ai’s live ads feature offers real-time data, automated bids, and streamlined ad management to help your ads rank high.
Sponsored Brand Ads (Formerly Headline Search Ads)
The purpose of Sponsored Brand Ads is to promote a brand or a collection of products. They appear at the top of Amazon's search result pages, offering high visibility and helping build brand awareness. These ads showcase a brand's logo, a custom headline, and multiple products, providing a more holistic promotional opportunity.
Sponsored Display Ads
Sponsored Display Ads allow advertisers to retarget potential customers both on and off Amazon. These ads are displayed on Amazon’s product detail pages, across Amazon’s network of sites, and on third-party websites. Sponsored Display Ads help sellers retarget shoppers who previously saw their products or similar products, offering a wider reach and greater engagement opportunities.
Sponsored Video Ads
Amazon Sponsored Video Ads are a relatively new format designed to showcase products through engaging video content. These ads appear in search results and are ideal for products that require a bit more explanation or demonstration to convince customers to make a purchase. Sponsored Video Ads are clickable, directing users to product detail pages.
Amazon DSP (Demand-Side Platform) Ads
Amazon DSP allows advertisers to programmatically buy display, video, and audio ads both on and off Amazon. DSP is for advertisers who want to engage in more sophisticated targeting, such as remarketing to customers based on their behavior across the web. With DSP, brands can leverage Amazon’s first-party shopping and behavioral data for precise audience segmentation.
Also, check out ROAS Explained: How to Calculate and Optimize Your Ad Spend
Differences between automatic and manual targeting
Parameters | Automatic Targeting | Manual Targeting |
Targeting approach | Amazon’s algorithm selects search terms based on product details. | Advertisers choose specific keywords or products to target. |
Control | Limited control over which keywords are targeted. | Full control over keyword selection and targeting |
Keyword research | No keyword research is needed, Amazon handles targeting. | Requires detailed keyword research to find the best terms. |
Bid adjustments | Bids are set automatically, with less granular control. | Advertisers adjust bids based on keyword performance. |
Audience reach | Advertisers adjust bids based on keyword performance. | More precise targeting based on selected keywords. |
Best use case | Ideal for new sellers to gather data or for those looking for broad visibility. | Ideal for experienced sellers aiming for specific audiences and better budget control. |
Basic setup considerations before launching a campaign
Here are some basic considerations for you before starting a Sponsored Product campaign:
Before launching a Sponsored Product Campaign, ensure that you have a clearly defined budget and targeted products with optimized listings (titles, images, and descriptions).
Have a clear strategic bid structure.
These factors help determine the success and reach of your campaign from the outset.
Optimizing Sponsored Product Campaigns
Optimization is key to the long-term success of any Sponsored Product Campaign on Amazon. Fine-tuning your campaign ensures better targeting, efficient ad spending, and improved conversions. Below are several strategies to help you optimize your Sponsored Product Campaigns for the best results:
Importance of keyword management and bid adjustment
Here are a few reasons why keyword management and bid adjustment are essential for sponsored product campaigns:
Effective keyword management is the foundation of a successful Sponsored Product Campaign.
Regularly reviewing and optimizing your keywords is critical for driving better performance.
Adjusting bids based on performance metrics ensures you’re maximizing visibility for high-performing keywords while controlling costs.
Creating and analyzing search term reports for insights
Here’s why you should analyze search term reports for insights:
Amazon provides search term reports that allow you to analyze which terms customers are using to find your products.
By reviewing these reports, you can identify which keywords are generating sales and which are not, allowing you to refine your targeting. SellerMate.ai’s business reports feature provides long-term insights to help you optimize your ad strategy.
Regularly review search term reports to identify high-performing search terms that you can integrate into your manual campaigns.
Identify underperforming or irrelevant search terms and add them as negative keywords to avoid unnecessary spending.
Use the insights from these reports to adjust your keyword strategy, refine targeting, and allocate more budget to terms that are generating revenue.
Strategies to drive relevant traffic and conversions
Here are the strategies to drive traffic and conversions:
Optimizing your campaigns involves focusing on high-performing keywords, adjusting bids, and eliminating underperforming search terms.
Utilize both positive and negative keyword strategies to refine your audience reach and ensure you’re attracting the most relevant traffic.
Segmenting your campaigns based on product type, performance, or even seasonality allows you to manage bids and budgets more effectively. For example, if you have multiple product variations, you can create separate campaigns to adjust bids specifically for each.
Utilizing negative keywords to refine audience reach
Here’s how you can utilize negative keywords to reach your target audience:
Negative keywords are equally important in campaign optimization.
By adding terms that don’t convert, you can reduce irrelevant clicks and wasted spending, ensuring that your ads are only shown to highly relevant shoppers.
Regularly review your search term reports to identify search queries that lead to irrelevant clicks or low conversion rates. Add these terms as negative keywords to prevent your ads from being displayed for those searches.
Conclusion
Amazon PPC is a powerful tool for boosting product visibility and sales. By implementing the strategies outlined in this blog—setting up campaigns, conducting keyword research, adjusting bids, and reviewing performance—you can optimize your PPC strategy for long-term success. Continuous optimization is crucial for maintaining effective Sponsored Product Campaigns. Ready to elevate your Amazon PPC marketing? SellerMate.ai can help you create and manage results-driven campaigns. Book a demo today to maximize your Amazon sales!
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