Amazon PPC Explained

Amazon PPC basics explained - Advertise your products within the Amazon platform

People who are new to Amazon, do not really know about advertising options and are not familiar with the PPC and what kind of campaigns it is possible to run.

When selling on Amazon, it is important to be visible for the potential customers and appear on the first page for the specific keywords (since most of the shoppers make their buying decisions from the products on the first page, and do not even visit second page).

You can achieve the results by learning about Amazon SEO and optimizing your listings, but you won’t be able to optimize for all the possible keywords as well as there are other placements to show your products which is possible only with Amazon PPC campaigns and today I will explain to you how it works!

What kind of campaigns I can run on Amazon?

First of all, there are 2 different campaign types you can run:

Sponsored products

Sponsored Products are ads for individual product listings on Amazon. They appear on search results pages and product detail pages, helping drive sales and product visibility.

Under almost every keyword search on Amazon, you will see listings with the badge “Sponsored”, which is exactly the case:

Sponsored Brands:

Sponsored Brands showcase your brand and product portfolio. Featuring your brand logo, a custom headline, and up to 3 of your products. Sometimes the ad appears only with the logo. To be eligible for this feature you will need to be registered for the Brand Registry.

But how does it work?

From now on you know about the placements of ads on Amazon, but how does it really work?

If you are familiar with Google Ads, it would be easier for you to get started. The same as Google, Amazon allows you to choose the price you want to pay per click, that’s why it’s called PPC.

The difference is that people visit Google when they want to research about any type of product, topic etc. at the same time, people visit Amazon when they have a product in mind, and they are ready to buy. That is the reason why Google Ads have 1-2% conversions comparing to Amazon 10% conversion rate!

If you are not familiar with Amazon at all, you need to know about Seller Central first, which is an admin panel for Amazon Sellers, where sellers can manage their orders, create and optimize product listings, as well as, set up campaigns.

When setting up campaigns, you can choose automatic or manual campaign type where you choose keywords related to your product to appear higher in the search engine rank pages. As well as, you set up a daily budget that you would like to spend for the specific campaign

There are multiple sellers trying to advertise for the same keywords, so how do you ensure that your ad is before or after your competitor? The technic is simple, the one who set up the higher bid (pay-per-click) is shown higher than other competitor ads.

Cost per one click depends on the competition, but in the UK for example, it is around 0.50£ – 2.00£

Automatic campaigns

When running an automatic campaign type, you basically rely on Amazon and let it show your products to the keywords which Amazon thinks are relevant based on your products information.

It is always advised to start with the automatic campaigns and run them for 1-2 month. Amazon will be able to provide you data for this period with the keywords which were more likely to convert customers for your products, therefore you can use this data for setting up manual campaigns.

Manual campaigns

Within a manual campaign, advertisers can further refine their ad targeting using the three keyword match types:

  • Broad match type: search terms that contain all components of your keyword in any order.
  • Phrase match type: search terms that contain all components of your keyword in the same order.
  • Exact match type: search terms that match your keyword word by word (same word order + same components)

So if you want to advertise with the keyword – ”hand luggage”

For the Broad match type, your ad can appear for the search query – ”hand black luggage”

For the Phrase match type it won’t appear for the ‘hand black luggage”, but will definitely appear for the keyword “luggage hand” or “hand luggage black”.

And for the Exact match type, there can’t be any variations besides the “hand luggage” for your ad to appear.

Track the Results of your campaign

After activating campaigns and giving them some time you will be able to track your results which might help you to optimize the efficiency for the future.

The most important abbreviation you need to know is ACoS, which is Advertising Cost of Sales, and it shows the percent of attributed sales spent on advertising. This is calculated by dividing the total ad spend by attributed sales. For example, if you spent $4 on advertising resulting in attributed sales of $20, your ACoS would be 20% (ie. $4/$20 = 0.20).

ACoS, will allow you to estimate the percentage of your profit margin taken by advertising on Amazon

There are many factors you should take care of when optimizing your ACoS, which include things like setting the ”negative keywords” which you do not want to advertise for, understand the best suitable bid for the keywords etc. But probably it’s better to have another separate article about the optimization and increasing the efficiency of Amazon PPC advertising.

Besides that, you will be able to see impressions – how many times your ad was in front of the eyes of the potential buyer, how many clicks your ad generated, how many new to the brand customers you had and how many are returning customers, and much more than that!

Would you be interested to read more about Amazon PPC and learn about tactics and features which will allow you to have more efficient campaigns? Drop the comment bellow and I will write more in-depth research about this topic.