It is not easy to find straightforward answers especially when it comes to increasing your business or doing advertising. That’s why we created this guide to make advertising on Amazon easier for new sellers. This article is your starter guide for paid advertising on Amazon. Use it to your best to drive traffic and increase sales of your Amazon product listing.
In this guide, you will learn:
- What is Amazon PPC?
- Why it is becoming increasingly important
- How to run Amazon Advertising campaign
- How to effectively optimize your Amazon ads
What is Amazon PPC?
Amazon PPC is the sponsored item or product listed in the Amazon search results. People searching for products on Amazon are majorly on the bottom of the sales funnel. It means the 2.64 billion visitors every month who visits Amazon, looking to buy as soon as they search for something on Amazon. Due to this, the conversion rates are much higher than Google Ads or Facebook Ads.
PPC advertising is a cost model in which you pay for each click to your ad. In other words, when a potential customer sees your ad and clicks on it, the advertiser will be charged. Similar to Google Ads, Amazon PPC is an auction-based platform where you bid for search terms in the hope to appear on the Amazon search results page.
Amazon Increases your Sales through Ads without Interrupting the User Experience
The best part of Amazon advertising is that e-commerce sites can have ads on every web page and everyone results without ruining the user experience. Almost 56% of customers starting their shopping journey over the e-commerce platforms, brands are now seeing the advantage of advertising on Amazon.
Amazon is continuously upgrading its features on its ad platform such as remarketing on third-party sites, attribution, and Enhanced brand content, among others.
How do Amazon PPC Works?
Amazon advertising works differently. It has two selling platforms: Vendor Central and Seller Central. The former is for bigger sellers and the latter is for smaller sellers. The ad types overlap on both platforms.
As discussed above, Amazon advertising works in an auction-style system. The winner of the bid for the search term’s ad appears on the Amazon search engine results page (SERP) when a potential customer searches a keyword.
Amazon has several ad types but Sponsored Ads are amongst the most popular, appearing at every stage of the buying stage. It has the highest conversion rate (10%). The headline search ads require copywriting; however, product display ads can be viewed on display pages.
Apart from these two, Amazon has other multiple ad formats for advertisers such as Enhanced Brand Content, A+ content, and videos to create brand awareness.
Few Tips to Optimize your Amazon Ads
The most important thing to prioritize before beginning to advertise on Amazon is to ensure your product details are set up properly. The bad product display pages can lead to a futile attempt at selling, which also leads to a number of problems.
Make sure to focus on:
Write accurate product descriptions: Be transparent and completely accurate about your product; an incomplete description can lead to bad reviews.
Have a good number of images: More images mean a better look at the product which ultimately helps you to gain trust.
Set a price as per competition: If your product is not at the competitive price; it means better chances of standing in the customer’s list when they compare the products.
Good Reviews are the key to gain trust: The importance of the reviews cannot be undermined moreover when it is a major factor in earning customer’s trust.
Your product description page is like your brand’s landing page. Make sure to optimize before you bring traffic to it.
How to Start your Amazon Advertising
If you are new to the Amazon advertising PPC tool, then you should begin with automatic payment. It takes away most of your efforts in starting a campaign; it will give you all the information required to begin your campaign without any additional keyword.
The auto campaign is like running a plane in autopilot mode with the help of advanced technology. The auto campaign mode can help you find keywords that work best for you. This technique of running a campaign for a low amount and bidding after analyzing can help you save money to a great extent.
In the beginning, run an automatics broad match campaign for Sponsored Product Ads. Bid low and analyze what works best. Which search terms bring more impressions then increase your bids a little bit to earn a conversion. As soon as you get the first conversion, pick that search term and place it in a new manual exact match campaign. Then, continue to inch the bid up until you reach your target ACoS (TACoS).
Follow this process for each search term that gets you a conversion. The search terms which are not performing well, keeping them means wasting your money. Turn your search terms that don’t bring the result into Negative Keywords, this will avoid wasted spend. Negative Keywords are the keywords on which your ad will not appear. As per the Inch-Up method, if a term isn’t converting, you don’t want it around to suck up your budget, but even if a search term gets one conversion, you should use it in that manual exact match campaign.
Remember: It takes Amazon 48 hours to collect accurate metrics. So, make sure to take this fact into account before making any changes.
Some Important PPC Terms to Understand as you Start
While describing that method above, I have used a bunch of PPC terms. Here is the glossary to help you with those terms:
ACoS: ACoS means advertising cost of sale, and it is the percentage of how much you spend on ads in comparison to a sale. It is calculated by ad spend/sale.
TACoS: Target ACoS is the targeted ACoS at a campaign level. Low ACoS equals more profit and low visibility and high ACoS are more visibility and low profitability. High ACoS isn’t bad as some sellers think. It’s like buying an ad spot in the Superbowl. The price will surely be high, but the brand awareness and sales potential are infinite. Before deciding on TACoS, surmise your breakeven ACoS.
Keyword Match Types:
1. Broad: The most general type of match type. We need to put our first auto campaign in the broad match to cast a wide net of possible search terms we can show up for. As an online marketer, we have no idea what our products can show up before. We can’t predict our user’s behavior completely. Broad match terms are also the cheapest ones.
2. Phrase: This match type is a little more specific and a little more expensive. Phrase match includes phrases your search term might appear in.
3. Exact: This match type is exactly what it sounds like; the exact match is the most expensive and specific match type.
Impressions: How many times people see your ad.
Clicks: How many times people have clicked on your ad.
CPC or aCPC: CPC means cost-per-click or how much you are paying each time a customer clicks on your ads. aCPC is the average cost-per-click.
Conversion Rate: The percentage of sales compared to the number of clicks.
How to Step-up Your Amazon Advertising Skills
If you already know Google Ads, Amazon PPC is actually easy to win over. Amazon has lower competition and a better conversion rate than Google. It will be easier to learn and Amazon takes a lot of features from Google. Their ad platform is also based on Google’s. If you are someone who is new to Amazon PPC, Google Ads is a great place to begin your education by learning the history of PPC. Amazon PPC is a new thing, and sellers are just now realizing the power of Amazon ads, so there is not much educational material available.
After the Inch-Up Method, step up your Amazon PPC to the next level by adding Headline Search and Product Display ads to drive more traffic to your product. Also, it would be advantageous to know how Amazon’s A9 ad ranking algorithm works and how you can further optimize it.