November 24, 2022

What Is Amazon PPC And How To Optimize It Right

What Is Amazon PPC And How To Optimize It Right

When it comes to advertising dollars, Amazon is the third-largest platform for total digital ad revenue in the US.

Source: Statista

The marketplace continues to show an impressive growth trend—it’s the fourth most visited US site—that only accelerated back in 2020:

Source: Traffic Analytics tool (traffic trends for for 2019-2021)

The pandemic pushed a lot of people to take their shopping online, and despite lower digital footfall in 2021 (after all, offline shopping did make a comeback), this growth pattern continues.

With more people turning to online shopping, Amazon is now the most popular e-commerce site. And with more people came more advertising dollars.

But, as much as Amazon is becoming more and more attractive as an advertising platform, the average CPC (cost per click) is also on the rise:

Source: Statista

So if you want to leverage the full power of Amazon PPC while keeping your PPC costs as low as possible, you’ve come to the right place.

This post will reveal the most actionable strategies for optimizing your Amazon PPC campaigns and uncover how to go smart about your Amazon PPC management.

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What is Amazon PPC? A Brief Background

Before you even think about launching your first Amazon pay-per-click (PPC) campaign, make sure to brush up on your knowledge about the marketplace itself and think strategically about your choice of product.

Now, we take it you have a winning product and want to increase your visibility on Amazon. But with over 350 million products listed on the marketplace, organic growth strategies might not be enough to cut through the noise, and this is where advertising comes in.

Amazon features Amazon Advertising, its own platform that allows sellers to make ad launches on the marketplace. Essentially, it is an auction-based system where you bid for specific target keywords that trigger your ad. That bid, if successful, represents your cost per click.

Hence, the success of your Amazon advertising campaign largely depends on a few factors:

  • Budget;
  • Keywords;
  • Competition;
  • Ad type and ad placement.

While you can’t do much about the competition (although a smart choice of keywords will help you get around this – and we’ll cover this later), you have full control of the budget, keywords, and ad type/placement.

Amplify Your Campaign Results With Amazon PPC Optimization

Before you read our Amazon PPC optimization tips, make sure to go through this extensive guide that defines how Amazon PPC works and helps you make the right ad type and placement choice.

Given you’ve picked your ad type, you can do a few things to get maximum results from your Amazon PPC campaigns.

1. Finetune your product listing

While your product listing is not directly a part of your Amazon PPC campaign setup process, you don’t want to waste money driving people to a listing that has a low conversion rate (aka doesn’t lead to sales).

This post will reveal the anatomy of a bestselling Amazon listing, so closely follow all the recommendations we’ve listed there.

2. Go smart about your keyword strategy

There are two building blocks to your Amazon PPC keyword strategy success:

  • You should target long-tail keywords – longer phrases that might be less competitive yet highly converting.
  • Your keywords have to convert (as in your ad should target keywords that imply the highest sales potential).

Finding the hidden “long-tail” gems for choosing top-converting keywords

While Amazon keywords come with a plethora of metrics, there are only two you can get hold of before you launch any campaign – search volume and competition.

Your job is to find keywords that have a high number of searches yet fewer competitors targeting the same keywords with their ads or organic listings.

Amazon won’t let you see this kind of data, so you have to turn to third-party tools like Keyword Wizard for Amazon.

The longer the phrase, the more targeted the campaign you can create. And thanks to long-tail keywords, you can make sure your Amazon PPC keyword strategy focuses around the most converting keywords.

Say, you are selling red socks on Amazon.

You can target “red socks” as a keyword with your product ad campaign, this phrase has over 6,800 searches and over 11,000 competitors. But if you go long-tail, you can instead place your bid on “red knee high socks girls” keyword that has lower search volume yet less competition, and people who enter this kind of query are more likely to purchase your particular product that meets their more specific search.

3. Structure your ad campaigns

With no one-fits-all approach, you can organize your ad campaigns by various groupings.

Since you have to be mindful of keywords, the best approach to structuring your ad campaigns is to create a separate campaign for each primary product category. Then, you can divide your campaigns by ad groupings.

Let’s see how this can work.

Say, you sell shoes - all kinds and for various audiences.

You could first make few separate ad campaigns for: “men shoes”, “women shoes”, “shoes for children”.

Under the “women shoes” ad campaign, you can have few more ad groupings like “loafers for women”, “sneakers for women”, “high heel stilettos”, etc.

This structured approach will help you go smart about your keyword research for all ad groupings and make sure your ad campaigns embrace the largest range of your products.

4. Avoid targeting irrelevant keywords

While you can try to stay as organized as you can with your ad campaigns and ad groupings, chances are you will face one of the most common issues among Amazon advertisers - self-competition. This can happen when you target the same keyword under different ad campaigns, thus making two of your ads compete for the same keyword.

To avoid this, you have to go through the entire keyword list for your ad campaigns and make sure there are no repeats. Once you spot one, you have to move this phrase to a negatives list under one of the campaigns.

Done manually, this is a dreary job and you might miss something important, so you can use tools like PPC Optimizer for Amazon to automatically remove any repeat keywords.

There is another use of negative keywords.

You might be targeting a broad match keyword phrase (when you don’t want to limit your ad to an exact keyword in the exact order of the wording) but know for sure that one phrase would be an irrelevant match for your product. So you can move that keyword phrase into the negatives list and be calm that your budget won’t go to waste showing your ad to irrelevant audiences.

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5. Check your data to stop advertising underperforming products

Once your campaigns are up and running, you have to keep a close eye on the stats. Within each ad group, you will have some products that sell better than the rest. So this is where you can and probably should intervene and remove the underperforming products from your advertising efforts - to make sure all the clicks and impressions are pointed to products that turn clicks into sales.

6. Define how many dollars you want for the buck, or what is ACoS and why is it important?

In Amazon terms, this means that you should set your target Average Cost of Sales (ACoS) defining in advance how much you are ready to spend for $1 of revenue coming from your ads.

ACoS is a subjective metric. If you are focusing on profits, you should consider profit margins for each advertised product and set the cost of sale accordingly. If you need visibility more than anything, you can extend that number up to 100%.

In any case, the way to balance out your spend and sales is by optimizing your CPC bid, something you can only do once you have some data to rely on:

  • If CPC for a keyword goes beyond your target ACoS value, lower the bid and see if you can reach your perfect ad spend-sales ratio.
  • If your ACoS is under the target value, you can increase your bid to see if you can expand your ad’s reach and sales.
  • If a keyword brings in little to no sales or clicks/impressions, test placing a higher bid to see if the keyword has any potential.
  • If you see no traction over an extended period of time, simply remove that keyword from your campaigns.

7. Use high-quality photographs

While most Amazon ad types won’t let you pick which image is being used, they typically feature the primary product image.

This means that you should invest in taking high-quality photographs of the product you want to advertise. First of all, quality visuals generally play a key role in building trust in you and your reliability as a seller, even when you are just working on conversions of your product listing.

With advertising, it’s even more important—after all, you are spending money on every ad and you have to make sure it’s optimized for ultimate efficiency. So don’t hesitate to hire a professional photographer that can pick the best possible angles for your product.

8. Test your ads to pick the best strategy

As with anything, you won’t know what really works until you test, test, test. This means that you should separate your ad budget into multiple campaigns that play around with various Amazon PPC features: keywords, pricing, and so on.

While, yes, this potentially means that you risk wasting your money on ads that don’t work, look at it differently: you are spending your dollars on fine tuning your ad for the ultimate performance. It might be a lengthy journey, but it’s definitely worth it, especially when you are choosing to do Amazon PPC manually.

Amazon PPC Management Made Easy

As a beginner or even an experienced seller, you may find it challenging to keep track of keywords, ad campaigns, ad groupings, their performance, and constant optimization.

This is where the PPC Optimizer for Amazon can automate the whole process, down to the point where you don’t need to deal with keywords, campaign structure, or management at all. All you need to do is:

  • Connect your Amazon Advertising account;
  • Define which products you want to advertise;
  • Set up your daily budget and the start/end dates.
PPC Optimizer for Amazon

The tool will then:

  • Select the most efficient keywords that have the biggest sales potential;
  • Create 4 ad campaigns for each product and eliminate the ones that underperform.

All this is done automatically without the need for your input. Throughout each campaign, you can track the performance of each campaign, exploring ACoS, revenue, clicks, and impressions.

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