Amazon’s internal advertising system includes Amazon PPC campaigns. Brands, companies, and third-party merchants can leverage Amazon PPC to target specific keywords and create product ads that appear in Amazon search results and competitive product listings.
Advertisers benefit from Amazon PPC campaigns by displaying their goods to prospective buyers more often in key places on the search results page, increasing product visibility. Ads may appear mainly on the search results page, with varying degrees of visibility depending on the ad type. Internet users refer to Amazon more than other search engines like Google to find goods they want to purchase.
In this article, you will read up on Amazon PPC strategies, and also, do not forget to review Amazon PPC basics that we prepared for sellers in 2022.
Table of content:
- Organic Keyword Growth
- Profit Growth
- Product Launch
- New Keyword Scouting
- Low Inventory Strategy
- Get BST
- Defend BST
- Organic vs. PPC Sales Strategy
- Amazon Bidding
- Amazon Ad Requirements to Get Started
- Search Term Report for Evaluation
- Set Your Campaign Goals
- Final Word
Organic Keyword Growth
It is one of the most common Amazon PPC strategies to embark on for new Amazon sellers. Take the keywords with the highest conversion rate and place them at the top of the search. It will help increase the conversion rate, improving the organic ranking. Since the goal is to get more conversions for a keyword than competitors, we will not do dayparting for this Amazon PPC strategy.
Profit Growth
This strategy is aimed at obtaining maximum profit from advertising right now. For this, bids are gradually reduced, and budgets remain the same. There are fewer clicks and traffic, but proportionality is on your side, with a higher profit respectively.
Take the most profitable keywords and placements (look at the top of the search vs the rest of the search vs the product page, and find the most profitable ACoS and target spending ones for those placements). To boost profits, Profit Whales also uses VPN to check the organic rankings, and if we rank number 1 organically, then we will not push the number 1 PPC position.
You will lower your bids if we rank number 1, until the VPN shows that we are not number one in PPC.As a part of this Amazon PPC strategy, we also implement dayparting to pause keywords during the least profitable hours.
Product Launch
This strategy is suitable for new product launches but only after the work with listing and active set reviews; if that is ignored, the strategy will not bring the expected result due to the fact that ads will work with poor conversions. With this PPC strategy on Amazon, ACoS is expected to be higher than “Break Even” for four to six months.
It will be possible to limit budgets only when starting with a smooth launch with low bids. If you need to kick off very quickly, then bids will be higher, which leads to an increase in advertising costs.
Move the keywords to the top of the search to generate sales. Right after we get the first sales (just a couple of them), we lower the bids immediately. Launch to the top of the search > get some sales > lower the bids quickly. It indexes us for many keywords, and Amazon gives us new keywords that may be relevant to our listing. You need to get 1 sale to become indexed for a keyword.
The goal here is to make us appear for as many keywords as possible within the budget, to build relevancy.For this strategy, we will not run dayparting because it might take some time for the new listing to show up at the top of the search.
New Keyword Scouting
Expands the semantic core so that we can appear for more keywords. It is designed to identify new target keywords more aggressively than usual. You will target the top of the search with an ASIN (when you target an ASIN like Comfilife, you will appear for all the keywords they appear for (but not necessarily outbidding them) for many leading competitors. It is necessary to scout for additional keywords.
This Amazon PPC strategy only works with broad/auto/product page ASINs. However, you cannot push too hard with this. For this strategy, we will not use dayparting because there are too many targets to scout for and a small amount of data to make the right decision for dayparting.
Low Inventory Strategy
This strategy is intended for cases when you run out of goods in stock, and “out of stock” is inevitable.
The idea is to sell the product that is running out and earn the highest possible profit. This strategy includes:
- Decrease bids by about 15-45% to improve ACoS by decreasing CPC.
- Minimum running of ad companies.
- When returning the goods, the bids will be raised to the previous level with an extra 15-30%.
This PPC strategy on Amazon means turning off all non-performing keywords. It lowers from the top of the search to the product pages/rest of the search. As a part of this strategy, we will also implement dayparting to pause keywords during the least profitable hours.
Get BST
This strategy is designed to grab the Best Seller badge by getting all possible traffic and sales from all placements on Amazon. Since the emphasis is on traffic from the Top of Search, the average CPC will be increased with Spend. Meanwhile, the conversion is growing, too.
It is recommended that, whenever possible, apply the Lighting / 7 Days deal and add the largest possible coupon.
The results will be: improved organic sales, profit margins, and increased niche conversions.
You make a hard push with all the keywords that the top competitor (Comfilife) ranks for. Take sales away from Comfilife to drive more sales to our listing. You will need a VPN to see if we can outbid Comfilife for every keyword. If we do not, then our team makes adjustments to make sure we have the correct bids to win. We will disable dayparting because we want as many sales as possible.
Defend BST
The software starts to slowly disable keywords. As part of this Amazon PPC strategy, we will also implement dayparting to pause keywords during the least profitable hours.
Organic vs. PPC Sales Strategy
We can develop a strategy that optimizes the percentage of sales we want for organic sales and the one we aim for PPC sales (e.g., 70% organic, 30% PPC). Profit growth is more aggressive than Organic vs PPC strategy because the decisions may hurt organic sales in the long run. As part of this strategy, we will also implement dayparting to pause keywords during the least profitable hours.
Amazon PPC Campaign Structure
When you create your Amazon PPC campaigns, make sure you split them into stages. We typically launch research campaigns where we look for new keywords and also production campaigns for proven keywords. In the research campaigns, consider excluding the keywords you are targeting in production campaigns.
You have to run campaigns for ranking and, at the same time, campaigns for ROI. Determine what keywords are the target ones and attack them with all your might.
When you run campaigns for a new ASIN, consider launching Sponsored Products with exact matches targeting your ideal keywords as well as targeting your competitors who sell the same goods at a higher price or with less customer feedback.
For instance, if your campaign goal is to reach your competitors’ clients, you will set up ads with the keywords that buyers most frequently type to find competitors’ listings and target your competitors’ ASINs.
Amazon Bidding
Bidding is among the most challenging parts of the Amazon PPC optimization process. We are going to go through it step-by-step to help you understand.
How Does the Auction Work?
Cost-Per-Click (CPC) on Amazon will always vary for each auction.
Let’s assume your auction is ‘Soy Candle’, and you would like to advertise for that keyword. Every merchant chooses the maximum bid they are ready to pay per click.
To win the auction, your bid must be competitive. As a rule, the highest bidder gets the top ad position in the auction. However, Amazon also takes into account ad quality when selecting the winner.
In the example above, an advertiser wins the auctions because that particular auction has the highest bid.
And since Amazon auctions operate on a second-price basis, the winner will pay just $0.01 more than the upcoming highest bid, even if their winning bid was substantially higher.
However, be reasonable with how high you take to win. Many sellers think they can bid much higher than the recommended bid to secure a spot and encounter another merchant with a similar strategy, and they eventually overpay per click.
Therefore, it is crucial to experiment with your bids and test various combinations when placing ads on Amazon.
If you are not hitting your daily target budget, we recommend increasing your bids.
If you are running out of your daily budget without getting the ROI you want, we recommend paying attention to your negative keywords, bids, conversion rate, and product range.
You must analyze your data and discover where there is a leak to fix it.
Amazon Fees
What you bid equals what you will pay with Amazon PPC. There are not any hidden fees from Amazon charged post factum.
Amazon earns money when you generate a sale, so they are mostly interested in assisting you with making as many sales as possible.
Bid Adjustment for Placement
Amazon lets you adjust your bid depending on placement. Therefore, while it makes bidding harder, it is worth lowering your CPC.
We also recommend leveraging this feature regularly based on data. As a full-service Amazon marketing agency, Profit Whales detects multiple missed opportunities with our new customers as they do not often check placements.
Using a placement modifier, you may adjust from 0% to 900% depending on where it appears. Consequently, if you see that your ads shown on product pages for a specific item are not performing well, you can set your bid at 0%. Alternatively, if you have an additional product type that performs very well on product pages, you can increase it up to 900%.
It is best to start small, analyze, and move on.
How often do you need to review your placements? At least once a week for each of your active campaigns.
When optimizing placements, review the last 7 days, 14 days, 30 days of data before making a decision. Also, review and analyze historical data to make the best decision for the foreseeable future.
Dynamic Bidding
Dynamic bidding uses an algorithm to determine the likelihood of a purchasing decision by a client based on Amazon customer data. The algorithm is obscure, so you cannot understand what data Amazon takes into account. However, advertisers may set up Amazon dynamic bids combined with placement modifiers to adjust bids in real time based on conversion likelihood.
Nonetheless, dynamic bids are unsafe since Amazon may increase your bid substantially. For instance, if you offer $1 but add a dynamic bidding option, then Amazon might spend $5 per click while ignoring your $1 bid. Generally, we see poor outcomes and high expenses on ads with low ROI.
However, if you choose to try this, consider analyzing the data daily, weekly, and monthly to base your decisions on it if you aim to get the highest possible ROI.
Types of Amazon Keywords
You may encounter the phrases ‘search term’ and ‘keyword’ used interchangeably, but do you get the difference?
For advertising purposes, ‘search terms’ are associated with what clients type into the search bar, while ‘keywords’ are for what PPC advertisers bid on.
Depending on the chosen keyword match type, a single keyword can cover several search terms.
Match types might be unknown to you if you have never used search ads. So let’s further examine the match types that Amazon provides.
Keyword Match Types
There are three types of keyword match — broad, phrase, and exact. The various types will specify which search phrases your ads will be displayed for.
Broad match keywords show ads for your product when a client searches for that particular keyword, a similar phrase, or even close variations of the keyword.
For instance, the broad match keyword ‘green shirt’ might get your ad displayed if a customer searches for ‘men’s green shirt’ or even ‘green polo’.
We leverage broad match keywords to explore new possible keywords that perform well, which we can later add as an exact match and target directly. A huge missed opportunity is viewing reports on search queries. Typically 9/10 of the ad accounts we assess have this missed opportunity. It is not only about spending on contextual advertising. Make sure you explore your data and understand why you go for a particular format.
Another option is phrase match keywords, which will only show ads for your product if a client search contains your target keyword phrase.
It is a match type designed to explore the possibilities of new keywords that you may target with the exact match.
Therefore, if one browses for ‘green shirt for kids’, your ad will pop up. However, if one browses for ‘green shirt for boys 3T’, it will not. Phrase matching may assist you in refining your targeting.
Last but not least, exact match keywords will display your ads to clients who search for the exact keyword you are bidding on.
Negative Keyword Targeting
Apart from picking the top keywords for your ad, you might also want to add what are called ‘negative keywords’.
These are words that you do not want your ad to appear for, although they are associated with your term.
Based on the case above, if you have the broad match keyword ‘green shirt’ but do not want it to appear for ‘women’s green shirt’, you may specify this keyword as negative.
Negative keywords should be a phrase or exact match keywords. You cannot specify a negative broad match keyword.
Why do you need to add negative keywords? First, they help you grow by lowering your advertising costs. Moreover, they optimize your advertising budget as you might set them to remove search queries that are not cost-effective or related to advertising your item.
Discover relevant negative keywords by looking at your search queries report. You need to add the keyword to the negative keywords if it is a:
- Keyword with low click and not converting
- Keyword with high click and not converting
- Keyword with high click through and high cost
If you update negative targeting on a weekly basis, it will boost your profit.
Make sure you move your top-performing keywords from your exact match campaigns to the negative keywords in your research campaigns.
Amazon PPC Keyword Targeting
Amazon’s algorithm leverages keyword targeting to match buyers’ queries with relevant ads.
In controlled Amazon PPC campaigns, you might refine your ad targeting with the available match types:
- Broad/ phrase match type: we like to use it for trying out purposes while still searching for well-performing keywords.
- Exact match types: we leverage these two options for proven words that match our target KPI.
So preferably, you want to leave broad/phrase match keywords for testing and exact match for scaling the top-performing keywords.
Keep in mind that when setting up Amazon PPC campaigns, you must make a list of competitor advertisers that advertise for similar keywords to yours.
Apart from that, make a vast Amazon keyword research with various stages of keywords.
For instance, if you are promoting coconut and soy candles, advertising for the word ‘candle’ can be rational. However, you will end up competing with multiple candle types, and the better half of them with a lower price. Consequently, you will end up wasting your budget on the keyword with the highest traffic but the lowest conversion rate for your item.
What you can do is choosing keywords such as ‘coconut soy candle’, ‘coconut candle’, and ‘soy candle’.
If you have a low budget, adding long-tail keywords that are relevant to your item can make wonders.
Amazon Ad Requirements to Get Started
Amazon requirements to launch ads will vary depending on the ad type and account type.
As you might have noted, you will have to enroll your brand and register with the Amazon Brand Registry to view ads other than Sponsored Product Ads.
Search Term Report for Evaluation
When you assess your KPIs, you will require some information from Amazon. Find most of the necessary information in the Search Term Report.
To download the report, you need to:
- Sign in to your Seller Central account, and go to the “Reports” tab.
- Choose “Advertising Reports” and then “Create Report”.
- After that, choose your “Campaign Type”.
- In the end, click on the “Search Term” report, set a time period, and “Run Report.
Set Your Campaign Goals
Specifying goals is essential to any marketing campaign, so you have to brainstorm about it when choosing among the variety of Amazon PPC strategies. You may set your goals with the help of a formula:
Generally, every time you endeavor to increase your visibility and sales, your profit margin will be lower. It is inevitable when growing a product. Therefore, you should know your breakeven ACoS not to lose money in the long run.
As soon as you begin to generate more sales, you may want to prioritize increasing profits from every sale. And it is when you strive for your target ACoS.
Needless to say that each campaign will have its ACoS. It is because the advertising spend required to sell one item is not the same for another. Moreover, as you shift from targeting lower volume keywords to rather competitive broad keywords, your ACoS is likely to grow. However, additional sales can offset the higher costs.
In the end, each campaign must be run with the end goal in mind, while not forgetting about profitability.
Final Word
While you can use all the Amazon PPC strategies we listed one by one, they can also perform well in synergy.
Working out strategies for your Amazon PPC campaigns is a huge challenge that multiple successful Amazon sellers have risen to. Thus, it is not an excuse for being less successful and having a lower conversion rate on Amazon. All you have to do is understand how to test your ad budgets, bids, and creatives, and you will be unstoppable.
Of course, launching Amazon PPC campaigns is not easy. There are many factors and aspects to consider when dealing with Amazon PPC optimization. In addition, you should not overlook the obligation to balance your expenses and income. While you can manually integrate all the ideas and best practices with your Amazon PPC strategy, doing so will almost certainly require a substantial amount of time and money.
Profit Whales has a long-standing portfolio and industry expertise. We cover all Amazon management, with a focus on advertising campaigns, PPC campaign optimization, Amazon PPC management, and listing optimization.
If you are not sure about the technical aspects of Amazon PPC strategies, contact us for a trusted Amazon management partnership.
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