Amazon.com CPC

Amazon PPC Strategy Guide: How To Advertise On Amazon

When it comes to online retail shopping, Amazon is king. In fact, while Google may be the behemoth when it comes to general search queries, 41% of U.S. shoppers begin and end their search for a specific product on Amazon, acting as a one-stop shop for all of their buying needs, no matter the genre.

Here are a few more stats that will blow your mind. When Amazon shoppers enter a search term into the blank box at the top of the page and the first page appears, 70% of those shoppers never leave that first page. 35% of all shoppers click on the first product that is featured on that page and 64% of all total clicks on page one of search results are in those top three spots.

Suffice it to say, if you could find a way to make your products appear in those most coveted top-tier positions, you should be able to allow your page to run on autopilot and watch the sales pour in.

In this guide, I’ll show you how to make Amazon do precisely that using a clearly defined PPC strategy that focuses on using Amazon PPC instead of off-site paid advertising.

  • 70% of Amazon shoppers never leave that first page.
  • 35% of all shoppers click on the first product featured.
  • You should be able to allow your page to run on autopilot to watch sales pour in.

Amazon.com Web Site

Why Should I Use Amazon PPC?

As with any form of paid advertising, competition is fierce on Amazon’s platform. Now, not only are companies jockeying for position on the primary keyword in order to drive sales, but they’re also setting up campaigns on products and keywords that are not even remotely profitable in order to keep competition at bay.

Because of this extreme competition, one might ask if there’s any reason to invest in Amazon’s advertising platform at all since it could just be money out the window.

A simple answer? Yes.

Since Amazon is where the shoppers are, and an overwhelming amount of people begin their product searches on that platform and buy the products listed at the top of the page, you can’t afford to not be in that position one way or the other. But you don’t have to lose a ton of money in order to get started; this guide will show you how to create a PPC strategy that can get you into the buy box.

First things first: what is the “buy box”? This is the box on the top right corner of a product page that says “sold by.” It’s the one buyers use most often to simply add the lowest price item of that product to their cart and, if you’re in possession of it, can net a ton of sales.

In order to reach the top spot on Amazon’s page, you have to know how Amazon ranks their products. The real formula is a total secret to even the most seasoned sellers, but there are some definitive factors that are weighted more than others.

For instance, things like price, whether or not the product is in stock to begin with, as well as “text match relevancy” are some of the most important factors. Text match relevancy refers to whether or not the entire page is about the same topic. A bid for the word “cat toys” won’t show if the product page being advertised is about car parts, for example.

Beyond that, there are indirect factors that play into search rankings as well, such as quality of images, number of reviews, whether or not a product is fulfilled by the seller or by Amazon (FBA). All of these direct and indirect factors help a product reach the top spot on their product page beyond just simple advertising – although that helps as well. If the page isn’t laid out properly, no amount of advertising will help.

Finally, remember that Amazon’s algorithm doesn’t care as much about the total quantity of sales as much as they do about recent sales, so the higher your recent sales velocity you have, the better your product will rank.

  • an overwhelming amount of people begin their product searches on Amazon and they buy the products listed at the top of the page.
  • buy box’ is the box on the top right corner of a product page that says “sold by.”
  • To reach the top spot on Amazon’s page, you have to know how Amazon ranks their products.
  • Indirect factors such as quality of images, number of reviews, whether or not a product is fulfilled by the seller or by Amazon also play into search rankings.
  • Amazon’s algorithm cares about recent sales.

Ad Campaign

What Should Be My Goals For Amazon PPC?

When you start setting up your PPC campaigns, there will be three different types of ads to choose from: Sponsored product ads, headline search ads, and product display ads.

  • Sponsored Product Ads

These appear in the search listings at the top of the page and look almost identical to organic search results, with the simple addition of the word “sponsored” near the listing. These can also be either manual or automatic campaigns. Automatic campaigns take the content from your page and create an ad automatically, while manual campaigns allow you to input your own keywords directly.

  • Headline Search Ads

If you’re looking to make the most impact, headline search ads are the way to go. Not only do these appear at the very top of the page making them the first thing potential customers see, but you can also link to an external landing page off of Amazon. These generally come with a higher CPC, but the payoff could be more than worth it.

  • Product Display Ads

These appear on a competitor’s product page and can sit in a few different places. They also allow you to quote a review alongside your product.

So what should your goal be? There are a few different options to choose from depending on your business model, but a few are outlined below. Which one you choose is ultimately up to you.

Sales Volume: If your only goal is to drive sales, you’ll most likely have to spend a lot more per advertisement to simply get the product out the door. It’s not ideal, but it’s certainly one way people choose to advertise.

Improve Efficiency: On the other hand, if you want to make sure you’re getting the most bang for your buck, as the goal is to get the most amount of sales for the smallest amount spent. It’ll take longer to figure out the optimal keywords, but your ad budget won’t diminish quicker.

Sales and Efficiency: This is the best option for many sellers, but it takes time to figure out the best keywords and how much you’re paying for them. Since Amazon is a constantly evolving landscape, you’ll have to adjust your campaigns to move with it.

How Should I Set Up My Campaigns?

Amazon ads allow you to laser target specific keywords on your various products and push them individually to achieve the best ROI. To do that, however, you’ll need to create a different ad group with a different keyword ad for every product variation. That may sound complex, but even if you have upwards of 60 different ad campaigns, it’s still very manageable.

Start by taking a high-level view of your products. Each different product has their own campaign, while each product variation within that campaign has its own ad group. If you’re running an ad on gloves, for instance, every glove would act have its own campaign, while each variation of those gloves has their own ad groups. The idea is to figure out which keyword works for each variation, so a granular approach is best.

Ask yourself two questions when deciding whether or not a product should be broken down into different subsets:

  • How much control do I want over keywords?

The idea is to have a different bid for every type of product a person may buy, so having different keyword campaigns allows you to specify which campaign is working best. If you find that tweaking one thing affects multiple variations, narrow down the group further.

  • Will each group require different keywords?

Depending on how unique each product is, you may not need a different campaign for each. If a product needs a unique set of keywords to describe it, you might consider running different ad campaigns.

Try These Two Real-World Strategies

Here are two real-life examples of Amazon ads, as well as possible ways to react to the issue at hand.

Scenario 1. ACOS is Too High

ACOS stands for Average Cost of Sales, and it is one of the most important metrics in evaluating how effective your advertising campaigns are. In this scenario, the client has set a target of 10%, but a starting bid of $1.50 and average CPC of $1.15 has resulted in an ACOS of 15% – five points higher than their target.

What should they do? There are two options. They could lower their ad bid which will result in fewer sales but also generate a lower ACOS and thus, a more efficient ad, or they could leave it as is, sacrificing a little bit of profitability for the sake of generating sales off of a major keyword. Either option is fine, but if the ACOS were well above the target – say 35% over a target of 10% – you might consider reducing the ad spend to create a more efficient ad.

Scenario 2. Find Keywords

In this scenario, the goal is not so much to drive sales as it is to uncover keywords that will benefit the product page the most. Since high-value keywords that are derived from your automatic campaigns are more pertinent to your product page, defining these is key to your overall strategy.

How do you do this? Pull a report every couple of months from your campaigns and look at the last thirty days of your advertisements. Look for keywords that generate an ACOS that is at or below your target ACOS and add them to your manual campaigns, using all three match types: broad, phrase, and exact.

ErgoDriven: A Case Study in Amazon Ads

ErgoDriven was able to increase their sales by 57% over five months by implementing two core strategies.

First, they created advertisements on their own product page in order to fend off aggressive advertisements by competitors who were looking to steal sales. Even though these ads were not primarily designed to drive sales, they still were successful in maintaining sales numbers by keeping competitors off their product page.

Second, they used their competitors own tactics against them by running paid advertisements on their product pages to their site. Once their competitors found out, they started trying to overbid them, but a compelling copy and higher bids netted them several sales before the competitors were able to be successful.

Three Lessons Learned

  1. Play to Your Strengths. When you know an advertisement isn’t working, kill it immediately and reallocate those funds to your star players.
  2. Don’t Micromanage. There is a point when your efforts in making small tweaks don’t generate any returns. Make the necessary changes, but don’t overdo it.
  3. Set Clearly Defined Goals. Set an ACOS and work off of that. If you don’t have any goals set up, you’ll never know if you’re successful.

If you need help setting up your Amazon account or ads, give us a call or contact us by email.