Swimming in a sea of sellers in one of the world’s top one online marketplaces can be daunting. But thanks to tools like Amazon PPC, you have a surfboard to cruise along, and even stand out, on the waves of Amazon advertising and selling.
With the right approach to Amazon PPC, you can increase revenue, hasten growth, and improve visibility to your target market. It can even complement your organic placements and offline campaigns.
Here’s your companion guide to maximizing the benefits of Amazon PPC for your business.
Defining Amazon PPC
Pay-per-Click (PPC) is a popular term in online advertising that allows you to only pay for every instance that someone clicks on your ad.
With that, the most apparent advantage of using the PPC approach is economy. Since typically only those people who have the strong intent to buy your product will click the ad. And you only have to pay for those clicks as opposed to paying for CPM (impressions) for your ad on websites.
On Amazon, how PPC works is similar, it’s just that the ads are run only inside the platform. And also, the purpose is a bit different since you are not attracting visitors but attention. In essence, you are already one step ahead of the game.
Amazon PPC is an auction-style ad marketplace model wherein you place a bid on relevant keywords to your product in your niche. If you win, you get to pay a slightly higher price than the amount of what the second-place bidder bid (determined by Amazon’s relevance engine). And then your ad may show on either the top, sides, or bottom page of an Amazon SERP whenever the relevant keyword you bid for and won is keyed in.
You can say that the higher the bid, the better. But essentially, there’s more to it than that. And we will explore that later on in this article.
Now, Amazon PPC helps your business reach its target market among the millions of visitors Amazon caters to every day. It helps you to stand out among the thousands of sellers in your niche.
Amazon PPC is essentially paid traffic. It can hasten the results of months or even years of organic campaigns by allowing you to pay for ranking in the search query results.
Through the years, many Amazon sellers have found success in using Amazon PPC in their marketing campaigns. It is almost a fool-proof approach – only that you need to use it right. And it boils down to understanding how it works and deciding whether you work it out yourself or harness the expertise of Amazon PPC management agencies like us, Signalytics.
Why is PPC Important for Amazon Sellers?
Amazon generally does not have problems with traffic. But on the seller side, the challenge is in how to let your potential customers know you are there, and how you get them to buy from you instead of your competitors.
And to add, we are talking about the current largest e-commerce platform in the US and one of the largest in the world. Here are the stats:
- Close to 40% share of the e-commerce market in the US
- About 310 million customers worldwide
- Amazon Prime membership current count is 76 million
- Home to about 2 million small to medium businesses
- Roughly 37,000 sellers join Amazon every day
Given the size of the platform, Amazon sellers face both advantages and disadvantages.
With the former, you have access to millions of customers who are looking around with the intent to purchase.
As for the latter, you are in a very tight competition that can drive down your pricing. As they say, in Amazon, prepare to “get eaten alive”.
PPC is like that glimmer of hope for Amazon sellers. It is a push to increase your visibility in your market. Given that you have a great product and an optimized listing, Amazon PPC can help customers reach you, which will eventually drive the sales you need to thrive and even grow your business.
Another reason why Amazon sellers should take advantage of PPC is the return on investment.
Amazon is not just known for its high traffic but also for its notorious fees. Sellers need to increase the conversion rates of their ad campaigns to cover all these fees while still leaving them with decent profits.
Though Amazon PPC is another expense on your end, your investment in a campaign can increase your sales opportunities. It can be a stand-alone marketing strategy or may complement your other onsite and offsite marketing campaigns. And the good news is, that it is flexible to cater to your budget and/or goals.
What is a PPC campaign on Amazon?
Amazon PPC comes with a user-friendly interface that allows you to personalize certain parameters depending on your goals.
You can also create one or several PPC campaigns to see which ones will work and provide you with the results you need – whether increased sales, improved brand awareness or sustained rankings.
Amazon PPC campaigns can provide you the flexibility when it comes to your goals and budget.
A PPC campaign also includes a dashboard where you can monitor its performance from time to time. This can help you improve or optimize your listings, ramp or diversify your ad spend, and start a new ad or remove a non-performing one accordingly.
A PPC campaign is also a great source of data and insights that you can use for future campaigns. You get measurable data like impressions, views, clicks, ACoS, ROAS, detail page views, and of course, sales, to name a few. Reports also include click-through rates (CTRs) and keyword search term reports.
In a way, an Amazon PPC campaign simplifies the way you acquire and process this data so you can easily turn it into actionable responses and strategies. Overall, it is a wealth of information that can help leverage your business in the vast and competitive world of Amazon.
How Does a PPC campaign work?
Keywords are scored by relevance which creates the relationship between a search query and a search result. And this is where a PPC starts but does not end.
Earlier in this post, we mentioned bidding for and winning on relevant keywords. Aside from bid price, Amazon also compares your product listing or ad against several parameters for it to show on your chosen placements. And these parameters include your product’s own performance metrics and some relevance metrics.
Performance metrics pertain to your product’s sales, CTR, and conversion rate, for example.
Meanwhile, relevance metrics focus on the elements of the product listing like the name/title, description, bullets, media, and other keywords, as well as on-page customer behavior.
As you see, Amazon PPC does not give you instant ad placement the way you exactly want it. Factors like bid price, ad campaign quality score, and relevance are all at play. You still need to prove your relevance to the query and your value to the customer.
Relevance and value are the key performance metrics that Amazon banks on when it comes to providing a rich customer experience. No wonder customers flock to the marketplace by the millions.
Automatic or Manual Campaign?
When starting a PPC campaign, you can choose between Automatic or Manual. And each type comes with its own set of advantages and disadvantages.
But as you go along your Amazon PPC journey, you’ll eventually find what works and doesn’t, so you can have more control over your campaigns and improve the results further.
If you are a newbie, it is advisable to start with an automatic campaign, and then eventually use your discoveries and learnings to fuel your manual campaigns.
Manual campaigns are more popular with seasoned PPC users since they provide them more control over the keywords they place the bid on, therefore, maximizing the results.
Setting up an Account
Amazon PPC starts with setting up a PPC campaign. In your seller central account, you can find a tab for Advertising, then choose Campaign Manager. You can then input the appropriate details and set different parameters like daily ad budget, campaign duration, and targeting type. Over the next steps, you can include the products to advertise, choose the keywords, and set bids.
When you are just starting a PPC campaign, the platform needs time to collect the necessary data to provide you with more insights regarding performance. As you monitor, you can see which keywords are giving the results you need and which ones just eat up your ad spend and return nothing.
Testing and Optimizing
Another good thing about PPC campaigns is that it allows you to test different approaches, tweak as necessary, and then repeat the process.
Why PPC Campaigns are Important
Amazon PPC can benefit the whole Amazon ecosystem, which includes the sellers, the customers, and even the platform itself.
Propels Your Organic Ranking Growth
The platform already has customers with the intent to buy. However, given its expanse, it is challenging for its sellers to keep up with the increasing competition inside. After all, Amazon intends to increase seller competition to encourage innovation.
Organic growth is still the game that everyone needs to ramp up for the long-term, but PPC is that push that can help new sellers gain enough traction, which gives everyone a fair chance for growth opportunities – newbie or seasoned.
Sustains Your Organic Ranking
Meanwhile, seasoned sellers can still benefit from PPC by helping them sustain their rankings and encourage customer loyalty.
On the sellers’ end, PPC helps boost their business’ visibility to the right market or customers. Consequently, it results in improved conversion rates, providing a good ROI for their PPC ad spend, as well as increased sales.
In addition, PPC gives newly launched products and new sellers a good fighting chance, along with experienced sellers, for more sales and reviews on their products.
What are the Biggest Risks of Running a PPC Campaign on Amazon?
Amazon PPC can leverage your business in many ways but it is important that you give it the right attention. It is not your ticket to a one-time big-time success. It is also not a guarantee that you will always be at the top of the results. More so, the amount you spend on it is not the indicator of its success.
Losing Your Opportunities
If you do not provide the right attention to your PPC campaign, you risk spending more without getting the results you need. You may also not seize the opportunities it provides you, losing that crucial momentum to crush your competitors.
Relying Solely on Automatic Campaigns for Long Term May Restrict Your Opportunities
Utilizing automatic campaigns also introduces more risks if you only use them long-term.
You may restrict yourself from targeting keywords that are more appropriate and better performing but cost less.
You may also be spending on irrelevant keywords and show up on search results that are irrelevant and do not convert, decreasing your quality score and affecting your organic ranking.
Not Realizing an ROI
But, the biggest risk with running PPC campaigns is not realizing a return on investment (ROI). Thus, you must stay patient, continue to test and optimize, and seize every opportunity it presents to grow and scale your business.
How do You Optimize a PPC Campaign?
Amazon PPC optimization maximizes your opportunities from paid advertising. It helps Amazon’s advertising algorithm find the right placements and audience that will ultimately make your ads a success. In hindsight, you are also exerting efforts on increasing your organic ranking.
There are various ways of optimizing PPC campaigns, but it starts with Listing Optimization.
Optimizing your listing(s) makes sure you are set up for success in both worlds of paid advertising and organic ranking. It can also help you increase the ROI of your ads by ensuring that the traffic you get out of them converts to sales.
The goal of Listing Optimization is to boost your searchability (and conversion rates) on the Amazon platform.
Customers tend to compare the products they see on the first page of the SERP, and not often beyond that to the second and subsequent pages. List optimization is the first step in helping you land on that coveted spot of the SERP. Meanwhile, Amazon PPC increases your chances more.
Define your goals
Setting the right performance metrics to compare to can help you optimize your PPC campaigns. Parameters like Profit Margin and Ideal ACoS help you analyze if your campaigns are working in your favor.
Meanwhile, it is also good to provide a structure for your PPC ad campaigns.
Define your goals, set your budget spend, and assign timelines. You can work on multiple PPC ads that target specific goals. It sets the direction of your campaigns so they will go smoothly and are aligned to the overall marketing strategy of your business.
Meanwhile, the trends in PPC campaigns are now leaning into video; the same as what social media and search engines are experiencing.
Using high-quality video (when possible) can help to increase the conversion rates of your PPC ads.
Draft compelling ad copy
Some ad types, such as Sponsored Brands, allow for headline copy.
Using compelling copy can also optimize the performance of your PPC campaigns.
It should be effective in sending your brand message and in enticing your target customers to take a look at your listing or brand page. You have to do research about your market and understand their problems so you can properly convey your product as the solution to it.
Test, Optimize, Repeat
Since the market is ever-changing, continuous testing provides you with fresh perspectives and insights from time to time. This allows you to act on the opportunities that can help you encourage more sales.
At the same time, it also helps you fine-tune your campaigns so it achieves the goals for them, as well as a decent ROI.
Why Should Amazon Sellers Invest in PPC?
A good PPC campaign makes up a part of the backbone of your Amazon business.
- Supports your new product launches
- Provides you with data and insights about customer behavior and opportunities for your business
- Maximizes the traffic inside the platform to your advantage, and
- Directs your target customers to buy your products.
Overall, investing in PPC hastens your sales and brand growth inside the platform.
If done right, it is possible that the benefits will spill over beyond Amazon and direct some advantages to your other marketing campaigns for the same products.
Amazon PPC can also complement the work you do in your organic ranking. It is also effective in helping established brands and products sustain their rankings in Amazon’s SERPs.
A commitment that pays off because of the Amazon A9 Algorithm
Amazon’s latest and continuing initiatives have been geared towards “cleaning” the platform of fake reviews and counterfeit products. This is possible by using sales quantity and genuine reviews onsite and offsite as its major gauges for product rankings.
Though the A9 algorithm recognizes more value in the organic elements that influence your listing, PPC remains a reliable marketing model for Amazon sellers.
Amazon PPC can be responsible for giving that boost you need, whether when launching new products, pushing for high-quality traffic from off-Amazon sources, or increasing the conversion rates of your ads. Thus, it still makes a good long-term strategy to use.
However, the A9 algorithm also presents some challenges to sellers. It no longer holds that much driving force in visibility, but, the insights you get from metrics performance, as well as the data out of customer behavior, remain indispensable for growth and scaling opportunities.
Amazon PPC campaigns, which are based on a cost-per-click model, convert more than CPM ads given all things equal.
PPC campaigns, like organic rank, also rely on keywords. And keyword research is supported by metrics. PPC campaigns let you monitor different performance metrics as well, allowing you to measure your ROI accordingly.
Through the insights from PPC campaign reports, you can optimize your listing, making you more viable in organic rankings, which will ideally increase your sales.
Risky and Safe Strategies in Amazon PPC Investment
As with any investment, setting up Amazon PPC campaigns involve risks. But, the good thing about PPC is that it is flexible to cater to different types of marketers with diverse levels of risk appetite.
Strategic planning and execution in Amazon PPC are important recurring tasks. You should provide your campaigns with ample attention with continuous optimization and testing. This may involve both safe and risky strategies so you remain visible to your target market.
Now, Amazon PPC involves bidding for relevant keywords that have different levels of competition. This categorizes them into high-level, broad, and long-tail.
High-level keywords tend to be more expensive to bid on since more people are keying them in the search query bar. The competition on these keywords is vast even in organic rankings. But essentially, all the keywords are relevant.
In PPC campaigns, you can vary the strategies that will work depending on your goals, risk appetite, and budget.
In the aggressive approach, you aim to place on the top 3 search query results in as many relevant keywords as possible.
Therefore, you will be bidding on all the keywords from high-level to long-tail ones. You have to have the budget and if done right, it can hasten the results and improve your competitiveness level.
This is what most sellers are doing because of its balanced approach to everything. You allot a budget for both structured and experimental campaigns.
Though the downside of the Assertive PPC approach is that it needs more attention from you when it comes to choosing the keywords and testing and optimizing your campaigns.
Minimal Risk PPC & Protection
Good for newbies, sellers with a minimal budget, and during lean months, the minimal risk PPC involves bidding for long-tail keywords that are essentially cheaper and has low competition.
The goals of Amazon PPC are to help increase your visibility and direct the traffic to your product with an increased conversion rate. This, in turn, will increase your sales and trust rating, which will eventually impact your organic ranking on the platform.
Sellers looking to launch new products, keep seasonal items moving, and sustain the ranking of a fast-selling product can benefit a lot from Amazon PPC. However, it is not a setup-and-leave strategy; continuously testing and optimizing your campaigns can help you maximize your opportunities from the largest e-commerce platform to date.