Amazon offers excellent business opportunities for SMBs and established businesses alike. A whopping 300 million people shop on the platform. Sellers who manage to find visibility in the highly competitive marketplace have a chance of tapping into the platform's ever-increasing customer base and leveraging its business potential.
However, it isn't easy to crack through Amazon's tough competition to reach its customers organically.
But fortunately, Amazon offers tools to help get your foot in the door and kick-start your Amazon journey.
One of these tools is Amazon's internal pay-per-click or PPC advertising system.
PPC ads offer excellent value to sellers. The average Amazon seller earns around $987 daily from their PPC campaigns. Moreover, a small Indian handicraft brand experienced a 49% increase in impressions through PPC ads.
However, Amazon's PPC ads benefit those who manage to use them well. In this blog, you will find some best practices to help you realign your PPC strategy for better results.
Understanding Amazon PPC
Amazon's advertising infrastructure is complex. If you are new, getting lost in a world filled with unseen acronyms and confusing ad types is easy. Therefore, it is critical to understand what Amazon PPC is before we embark on a journey to discover its best practices.
Amazon PPC is a part of the platform's internal advertising infrastructure that works on a pay-per-click model. Amazon charges the sellers a fixed amount that you can define yourself every time a customer clicks on your ad. There are no fees for impressions. So you get to drive brand awareness for free.
Amazon PPC ads allow sellers to create and display their ads in the search results, product pages, and other digital spaces on and off amazon.
When starting your journey with Amazon PPC, you can choose from three different ad types, including:
Sponsored Product Ads
Sponsored product ads appear on the search results page above the organic results.
Sponsored Brand Ads
Previously known as headline ads, sponsored brand ads can appear at the top or within the search engine results page. These ads can also be displayed on a competitor's products page.
Sponsored Display Ads
Sponsored display ads are banner ads that appear on and off amazon.
Example of a sponsored display ad banner on the left:
Amazon PPC Best Practices – Winning at Amazon Advertising
Navigating your way through the complex world that people call Amazon PPC is tough. These best practices will hopefully serve as a roadmap to help you find your way toward success:
Start with Defining Campaign Goals
You don't start a journey without identifying a destination, do you? Of course not. Similarly, you shouldn't begin advertising on amazon without identifying clear campaign goals.
Your goals will guide several decisions that you will make down the road. This is why identifying campaign goals before you start is critical.
Your campaign goals will help you choose the right ad type, decide on a budget, fix an ACoS, and choose a set of KPIs to track.
Campaign goals are what you want your Amazon ads to achieve.
Do you want more sales? Or are you looking for better brand awareness and reach? Identify the results you expect your ads to drive. And make sure your campaign goals align with your business goals for overarching results.
Choose an Ad Type
Each type of amazon ad focuses on different goals. Sponsored product ads help drive traffic and sales. Sponsored brand ads may help boost brand awareness and reach. And sponsored display ads may maximize customer engagement and build loyalty.
Pick an ad type based on your campaign goals. You can use a mix of different ad types to create a campaign that targets customers in all phases of their journey. Notice how Braun is using a mix of sponsored brand and display ads in the examples above.
Find the Right Keywords
Finding the right keywords is absolutely critical for Amazon sponsored ads campaign. The success or failure of your PPC campaigns may boil down to your choice of keywords.
If you struggle with finding the right keywords, consider adopting the RPSB or the research, peel, stick, and block method. In this method, you use automatic targeting to discover top-performing search terms. Then you figure out keywords from them. You use these keywords in your manual campaigns and block them from your automatic campaigns.
This method reduces some of the hassle involved in keyword research and helps you hit the ground running with manual targeting.
Once you have a list of keywords, let them work for at least a week. Then analyze each keyword's performance through metrics like conversion rates, CTR, CPC, etc.
To ensure you have enough accurate data, starting with at least 30 keywords is best. Continue targeting ads through these keywords for at least one week. After that, generate a report, analyze data, figure out your top performing keywords and double down on them.
Understanding the criticality of sound keyword research, a small Chinese seller started their Amazon PPC campaign with 20-30 handpicked keywords. After running the campaign for 10 days, they optimized it to remove keywords that did not generate sales. The seller experienced a 10% increase in monthly sales, with 25% of them coming through advertising.
So, being smart with your keyword strategy can reflect positively on your revenue.
Determine the Right Budget
Budgeting helps you stay on track. Therefore, don't jump into PPC without having a clear idea of what you want to spend on ads.
Amazon allows you to fix daily budgets. When this budget is maxed out, your campaign is paused until the next day.
Set your daily as well as campaign budgets so you can have better control over your ad spend.
The right budget depends on your goals, business scale, and ad types. It is okay to start small and gradually build your way up as your campaign progresses and you get more data to make better decisions.
If you are using a mix of different ads, allocate a major portion of your budget to the ad type that can contribute the most towards your goals. For example, sponsored product ads reportedly led to a 40% lift in units ordered. If that's what you are looking for, you may want to dedicate a significant portion of your budget to sponsored product ads.
Your budget may look something like this:
Also, determining a starting value of ACoS or advertising cost of sales will also enable you to fix a ballpark budget. The general value of ACoS for PPC beginners is around 27%. With that in mind, determine how much you are willing to spend per expected sales revenue.
Measure and Optimize
Advertising is not a set it and forget sort of thing. You have to track the results of your campaigns and identify what works and what doesn't so you can adopt the good and drop the bad.
Nearly 1 in 5 marketers struggle with measuring the effectiveness of their marketing campaigns. Fortunately, Amazon offers data-driven reports with each of its PPC ad types. These reports can help you analyze key metrics like CTR, CPC, ACOS, detail page views, sales, etc.
With these metrics on hand, you can determine which of your strategies were successful.
You want to let your campaign run for at least a week before generating and analyzing reports though. Otherwise, the data you get won’t be too accurate and reliable.
Final Words
Amazon PPC ads are an excellent pathway for sellers to break into the competitive marketplace and grow their business.
However, these ads need to be executed right for you to generate the desired results. For that, make sure to start your campaigns with clear goals, choose the suitable ad types, and continue tracking and optimizing your campaigns.
And if all of that becomes too much for you to handle, consider getting help from our Amazon experts so you can focus on the business side of things while we take care of promoting your products to the right people.