5 Ways to Optimize Amazon PPC Performance

Profit Whales Team on Sep 29, 2020

Keywords are the key to the PPC advertising success not only in a common understanding of this expression. For example, Amazon sellers track top competitors with help of keywords. 

As experienced platform users know, there are not that many top-performing keywords that describe the product, and the competitors are very likely to know them.  

Amazon search bar 

Sellers can find the best keywords for selling positions with help of the Amazon search bar.

From time to time, Sponsored Ads users can find it useful typing in the keywords into the search bar and scrolling the page or two down to see the differences in competitors´ actions: 

  • Are there changes in the competitor´s position for the same keywords? 
  • Did any of the competitors add a discount? 
  • Are there new products? 

 If there are changes, like a big product discount or a new competitor´s listing design, sellers will get an idea about the future market changes and understand whether something has to be improved. 

Campaign Manager graphs 

Even so, Amazon PPC Managers often ignore Campaign Manager in favor of more complex instruments, it is a very practical and useful tool.

The graph from the Campaign Manager can tell if any recent improvement paid off. 

Did the ACoS improve after lowering the bids? Or did the sales drop so much it is likely to lose more compared to what was saved?

The seller´s actions and the received from the graph results depend on the further tactic.

Bidding math for maintaining adequate ACoS

Amazon Seller Central offers a few instruments to customize advertising campaigns, these serve different purposes:

  • Sponsored Products are made for a straightforward promotion of products to be sold directly on Amazon in exchange for a higher profit. 
  • Sponsored Brand Ads unlike Sponsored Products do not display products’ prices what makes it perfectly fitting for expensive products. The logo is also included in the ad and it helps to develop brand awareness. 
  • Sponsored Display Ads are on Amazon for inspiring potential customers with the appearance of the product, waiting for their attention.

Sellers at the beginning of their Amazon experience find it useful to launch all three types of ads so the attention of the customers will be caught from all the positions.

The performance of all 3 ad types in terms of ACoS and sales are not the same. Nevertheless, Sponsored Ads are the greatest promotion asset of Amazon PPC manager. 

This is why Profit Whales came up with an easy-to-use formula to choose keywords´ bids in the Sponsored Ads management process: 

  1. Whenever a Sponsored Ads asset (whether a campaign, an ad group, or a single keyword) makes sales it is good news. Sellers need to observe it over some time and once it generates 5 or more sales it is safe to assume that the current ACoS will receive sales in future too.
  2. It is important to know the break-even ACoS. 

Time to compare the newly discovered selling keywords’ ACoS with the ACoS the seller can afford for a long run (the break-even ACoS). 

  • If ACoS is lower, the seller found some extra sales at a reasonable price.
  • If ACoS is above the break-even level but below 70-80% ACoS it makes sense to adjust the bid.
  • If ACoS is above 80% keywords will not work profitably in any way. Better to pause this keyword for some time.
  1. All keywords with ACoS between break-even and 70-80% need an adjustment of the bids by taking current bids and multiplying them by break-even ACoS values and dividing the result by an actual ACoS percentage. 

Example: a seller spends $12.6 on PPC costs of advertising with a particular keyword that had a $1.8 maximum bid. This brought the sale of 5 items worth $20 each. ACoS is, therefore, 63%. However, the break-even ACoS is 40%. 

Thus, a seller wants the highest bid to be no more than ($1,8*40%) / 63%=$1.14

This article can give a deeper understanding of the Amazon keywords work system.

The comparison of PPC sales and the total sales

What is necessary to compare:

  • Number of orders from the Advertising Campaign Manager for a given period
  • Number of total orders from the Business Report – Detail Page Sales and Traffic for the same period

Depending on the results sellers need to know that:

  • If orders from PPC are less than 20% of total orders the PPC is reserved and should make sales with a very good ACoS, because the PPC campaign can make more sales after pushing the bids up a bit.

In case selling does not work that well with ACoS at this level it is a sign that the campaign needs more adjustments.

  • When PPC orders make up 20-40% of the total orders – this is an indication of a perfectly balanced PPC and organic sales work. ACoS allows users to stick to the current bids and keep on generating maximum sales from sponsored ads with a current product listing. 
  • PPC orders are more than 50% of the total orders – this is a sign that PPC is pushing the limit of what the product listing can convert. The demand for the product is there, but organic sales are not catching up to it. 
  • A seller is recommended to put more effort into the Product Detail Page and bring that cost of a sale down.

Although it is not a definite indicator, the ratio of the total PPC and organic orders can give sellers a feeling of guidance in the right direction. And how exclusively PPC data can be a guide is described in the section down below. 

PPC data guidance 

A small PPC data analysis secret is that it takes time. Experienced Amazon sellers already know about this secret, advertising managers cannot collect data right after an ad was launched or after making a certain experiment. 

For example, buyers click on advertising in the evening but do not purchase the product until the next morning. Advertiser does not see an increased conversion rate in the evening, only higher impressions. But it does not mean that some of the advertising assets are not effective, only that buyer’s behavior is not obvious. 

 

To sum up, PPC advertising is a complex and multifunctional system that brings a lot of benefits including potential buyers and brand awareness to the developing business. Advertisers cannot forget about the tricks and secrets mentioned above to improve the relevant traffic inflow and in future sales.

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