How to Run a PPC Campaign on Amazon – Beginner’s Guide: What to know when launching a PPC campaign on Amazon
Acquiring and establishing a loyal customer base is a vital process in building and scaling your business. Although one great advantage of launching an e-commerce business on Amazon is its large customer base, it’s not easy to instantly sell and grow with active competition, as much as 1.5 million on the platform. You can’t just expect that once you’ve finished listing your products, customers will miraculously flood your store or landing page to buy your products.
There’s a difference between just being “out there” and being exposed.
Becoming exposed to your target audience is what your business needs to hit your business goals, like making new sales or building a loyal customer base. In this process, advertising comes in.
Promoting your products and brands, and sending your brand message to your target audience, are some examples of advertising.
It will attract the right audience who are actual users of your products or services to your brand and help you stay on top of the competition. Amazon PPC is one such tool that will help you in your business’ advertising needs.
What is an Amazon PPC Campaign?
To better understand what Amazon PPC is, you must first get familiar with Pay-Per-Click or, in short, PPC. Pay-Per-Click is a digital advertising model that requires marketers or advertisers to pay only when the customers click their ad.
For every click on the ad, the advertiser or marketer incurs an advertising cost. Big companies like Google, Facebook, and Instagram all adopt the PPC model.
Amazon PPC is an advertising tool or platform that also adapts the pay-per-click model. Amazon launched it to help sellers gain more traffic to their stores and landing pages.
Much like any other pay-per-click model, Amazon PPC also works by taking payments from advertisers only when their ads are clicked by customers.
And just like the Google Paid Search, it also affects the ranking of your store or products on the search results when customers search for items related to the ones in your ads.
The importance of Amazon PPC is that it gives the exposure or visibility needed by your business to win over customers, or visitors, in the least.
It will help you reach specific marketing goals, depending on the type of PPC ad you choose to utilize. It also allows better marketplace competition because you’re offering visitors an option when they search for a specific product.
Essential Terms to Learn in Launching a PPC Campaign on Amazon
It stands for Advertising Cost of Sales and is a metric used to measure the success of Amazon PPC campaigns. It refers to the ratio of the ad spend against the target or attributed sales. In other words, it shows much is spent to gain a dollar of the target sales. It can be calculated using the formula: ACoS= Total Ad Spend/ Total Sales.
CPC stands for Cost-Per-Click. It is a pay-per-click bidding model, where advertisers or marketers pay a fee every time their ad is clicked by customers.
Impressions pertain to the number of times your ad is shown to your customers, regardless of whether they click your ad or not. It is counted every time that an ad is showing or visible on a particular page.
- Conversion rate
Conversion rate refers to the percentage of store or website visitors who completed expected or desired action in your store out of the total number of visitors you received at a particular time.
- Negative Keyword
A negative keyword stops your ad from being triggered by particular search terms. In other words, it prevents your ad from showing up on a different target audience and places where it shouldn’t be.
- Attributed Sales
Attributed sales pertain to the total sales generated within 1 week of customers’ clicks in your ad. In other words, it’s the sales that Amazon attributes to the number of clicks received by the ad in a week.
The Different Types of Amazon PPC Ads
Amazon offers a wide range of advertising solutions for different types of sellers and partners. But it can be categorized into three general ad types:
Amazon Sponsored Products is the most common type of ads you’ll see when you search for products because they appear on search results. They also appear on product detail pages.
They are keyword- and ASIN-targeted. ASIN, an abbreviation for Amazon Standard Identification Number, is a unique alphanumeric code given to every product and assigned to every new product added to the Amazon catalog.
Because they are keyword- and ASIN-targeted, they appear when the keywords searched by visitors are related to or the same as the keywords you use for your campaign or when visitors search for items that are similar to the product on your ad campaign.
There are two types of sponsored products ads you can use, which will also identify two types of ad campaigns:
- Automatic targeting/ Automatic Campaign
In automatic targeting or automatic campaign, Amazon takes total control of the keywords used on your ad. Amazon’s algorithm evaluates the product on your ad and provides relevant keywords that are highly possible to appear on search results.
When visitors search for items in the marketplace, the relevant keywords chosen by Amazon’s algorithm are entered into the auction.
Your bid, which refers to how much you’re willing to pay for every click on your ad, is not the sole determinant of your win. Amazon will also evaluate the relevance of your keywords. If both criteria are satisfied, it will run your ad.
In an automatic campaign, you can still customize your daily budget, the duration of your campaign, the products you advertise, and the default bid.
What’s good about automatic targeting is that it helps you find the keywords that work and bring more traffic and the ones that don’t.
- Manual targeting/ Manual Campaign
Manual targeting or a manual campaign is the reverse of automatic targeting. Here, you have the power to choose your keywords. Here, you have the power to choose your keywords.
You also get to set the match type for the keywords you want to include. Like automatic targeting, you can adjust your default bid price and select the products you wish to include in your ad.
The good thing about a manual campaign is you have more control. You can adjust bid prices according to the marketing goal you want to achieve and test keywords that help meet those goals.
If you want to build your authority and brand image and showcase a collection of products from your Amazon store, you can choose to promote through sponsored brands.
It allows you to feature up to three products with your brand logo and a custom headline. It divides traffic for different landing pages in your store and boosts the overall store traffic.
Just like a banner ad, sponsored brands appear on top of search results. It’s the reason why it’s previously called Headline Search Ads. Visitors who click on the ad may be sent directly to your store, a specific product page, or any other custom landing page.
On the other hand, with an Amazon storefront, you may choose storefront spotlight, which is an alternative.
Sponsored brand videos also offer a great brand-building strategy, where you can share your brand story and message while showcasing your products.
If you’re ever wondering how you can win potential customers, who have already visited your product detail page but decided not to purchase, product display ads can help you.
It targets visitors who have been on your page but did not make a purchase. In a way, it also serves as a remarketing strategy.
The sponsored display offers two targeting options, namely product targeting and audiences. Moreover, it provides a wider customer reach because it displays ads on and off Amazon.
The display ads can appear on the Amazon website, an integrated app, or third-party websites. When visitors click the ad, they are sent straight to a product page.
Amazon PPC Keyword Match Types
In Amazon PPC, a keyword match type decides how your keywords will fare well in the auction. It dictates how relevant your keywords are to the customer queries and how closely they match. The closer your keywords are to the queries, the higher your chance to win at the auction.
There are three keyword match types available in Amazon PPC:
- Exact Match
The customers’ search terms should exactly match your selected keywords. Otherwise, your ad will not show. Close variations of the search term may also sometimes match, but this type is very restrictive. However, it can be the most relevant to a customer’s search term or query.
- Phrase Match
A phrase match helps in narrowing down your target search terms. Your keywords match only with the search term that has the same phrase or sequence of words. It helps you get a more relevant ad placement.
- Broad Match
From the word itself, a broad match offers a wide traffic exposure. Amazon’s algorithm matches your selected keywords with a range of search terms related or synonymous to them.
Requirements in Launching an Amazon PPC Campaign
- Create a Seller Central advertising account. Of course, you must already be registered to a Professional Amazon Seller account.
- Sponsored products should be eligible for featured offer placement. The Featured offer can be found in the product detail page, where customers begin the purchase process.
- Sponsored Brands and Sponsored displays should be registered to the Amazon Brand Registry.
Frequently Asked Questions
How much does Amazon PPC cost?
It depends. The Amazon cost-per-click depends on how much you allocate for your advertising budget. Whether you run an automatic or manual campaign, you’re free to adjust your budget, default bid, and bid prices. Yet, to give a figure, an average CPC costs $0.77, more or less. In general, CPC would be around $1 to $2 per click.
What does bidding on Amazon PPC mean?
A bid refers to the highest amount an advertiser can pay for a single click. But the bidding amount is not the sole basis for ad placement, so the amount you bid doesn’t always mean the amount you pay. The relevance of your keyword to the search term also affects your success in bidding. When you pass both the bidding and relevance criteria, and you win the bid, the rule is for you to pay $0.01 more than the second-highest bid. It’s called the second-price auction.
Which ad type is right for my business?
Honestly, your current business stage and current business need will determine the ad type that’s best for your business. Each ad type is best for specific marketing goals. You need to identify the problem in your business or what you want to achieve and write down your goals. Only then should you look at the ad types to figure out what would best serve their purpose. FYI, you can mix and match PPC ad types and strategies to yield better outcomes.
You need marketing and advertising to connect to your audience and establish your importance in their lives.
Without a solid customer base, or no new audience, you’ll get stuck with your sales, and it will hinder you from moving forward as a brand. Exposure to your target audience is always the first step to achieving all other marketing goals.
Amazon PPC is a platform that will help you connect to your audience.
However, there’s a learning curve for beginners in advertising, so you need to utilize the resources freely given by the marketplace and learn. You need to come up with realistic KPIs to measure how well your campaigns are faring. With these campaigns, you can develop best practices to guide you as you grow.
To know more about Amazon PPC, read more blogs on Sellers Planet.