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How To Optimize Amazon PPC To Lower ACoS

  1. The Common Mistakes in Optimizing Amazon PPC
  2. The Correct Approach to Optimize Amazon PPC
  3. The Importance of Negative Targeting
  4. Understanding Search Terms Report
  5. Classification of Keywords
  6. Keywords with Poor Conversion
  7. Keywords with Good Conversion But High ACoS
  8. Keywords with High Conversion and Low ACoS
  9. Keywords without Orders
  10. Utilizing the Bulk Operation Sheet
  11. Explaining the Four Types of Keywords Using the Bulk Operation Sheet
  12. Keyword Optimization Based on Different Types
  13. Utilizing Filter Views for Optimization
  14. Adding Columns to the Bulk Operation Sheet
  15. Identifying Keywords with Poor Conversion
  16. Identifying Keywords with High Conversion and High ACoS
  17. Identifying Golden Keywords
  18. Identifying Keywords with No Orders
  19. Strategies for Specific Types of Keywords
  20. Reviewing and Adjusting Bids
  21. Handling Different Color-Coded Keywords
  22. Final Steps and Tips
  23. Wrapping Up

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The digital world of commerce has become increasingly competitive, and to remain at the top, businesses must strategically position themselves. One of the most powerful tools businesses can use to succeed on Amazon is Pay-Per-Click (PPC) advertising. However, understanding and effectively implementing Amazon PPC can often seem complex, especially for beginners. This article aims to demystify this process and provide a clear guide to optimizing Amazon PPC.

In this guide, you will learn:

  • Mistakes in Optimizing Amazon PPC
  • How to Optimize Amazon PPC
  • Understanding Keywords and their effect on Conversion
  • Using the Bulk Operation Sheet

The Common Mistakes in Optimizing Amazon PPC

In the process of optimizing Amazon PPC, beginners often make common mistakes that can hinder their success. One such mistake is the hasty reduction of campaign spend, budget or bids when the Advertising Cost of Sale (ACoS) begins to increase. While this may seem like a logical response, it often results in reduced ad visibility and consequently fewer sales. Additionally, this tactic is not a long-term solution for decreasing ACoS or optimizing your PPC.

The Correct Approach to Optimize Amazon PPC

Optimizing Amazon PPC requires a strategic and systematic approach. It’s not just about reducing your spend or bids but involves a series of well-thought-out steps. These steps include understanding your product niche, identifying your target audience, selecting the right keywords, and continuously monitoring and adjusting your campaigns based on their performance.

The Importance of Negative Targeting

Negative targeting is an effective strategy for decreasing your ACoS. This involves excluding irrelevant search terms from your campaigns to ensure your ads are shown only to customers likely to make a purchase. The first step in decreasing ACoS is employing negative targeting of all irrelevant terms, particularly in the phrase and broad match types.

Understanding Search Terms Report

The Search Term Report is a valuable tool provided by Amazon that gives you insight into how shoppers are finding your products. It provides a list of all the search terms that have led to at least one click on your ad. By analyzing this report, you can identify high-performing and low-performing search terms, discover new keyword opportunities, and implement negative targeting more effectively.

Classification of Keywords

Classifying your keywords is a critical step in optimization. You can categorize your keywords into four types: those with poor conversion, those with good conversion but high ACoS, those with high conversion and low ACoS, and those without orders. By classifying your keywords, you can strategize and handle each type of keyword effectively.

Keywords with Poor Conversion

Keywords with poor conversion are those that generate many clicks but few sales. These keywords can quickly drain your budget without delivering a return on investment. Therefore, it’s important to identify these keywords, pause them, and potentially test different ad copies to improve their performance.

Keywords with Good Conversion But High ACoS

Some keywords, while they convert well, have a high ACoS. This means that while these keywords are helping to generate sales, they are doing so at a high cost. To manage these keywords, you can gradually decrease the bids or check the Search Term Report for irrelevant terms that are triggering your ads and add them to your negative keywords list.

Keywords with High Conversion and Low ACoS

These are the ‘golden’ keywords that bring in a lot of sales at a low cost. They have a high conversion and a low ACoS. When you identify these keywords, you can increase their bids to maximize their potential, thereby driving more profitable sales.

Keywords without Orders

There may be keywords that get many impressions and clicks but have not yet resulted in any orders. When you identify these keywords, you need to examine their relevance and the quality of the landing page they lead to. If these keywords are relevant and the landing page is optimized for conversion, consider increasing the bids. If they are not relevant, add them to your negative keywords list.

Utilizing the Bulk Operation Sheet

The bulk operation sheet is a helpful tool for managing and optimizing your Amazon PPC campaigns. It provides a comprehensive view of your campaigns and allows you to make changes efficiently. By adding relevant columns like CTR, conversion rate, and cost per click, you can easily analyze your campaign performance and make data-driven decisions. This is a key part of optimizing your Amazon PPC campaigns and ensuring they deliver the best possible return on investment.

This is an example of what a bulk operation sheet looks like:

Amazon PPC

Explaining the Four Types of Keywords Using the Bulk Operation Sheet

A bulk operation sheet is highly beneficial in managing and optimizing your Amazon PPC campaigns. It allows you to classify your keywords into four primary types: keywords with poor conversion, keywords with good conversion but high ACoS, keywords with high conversion and low ACoS, and keywords without any orders. This classification provides a systematic way of analyzing your keywords, enabling you to devise specific strategies for each type.

Keyword Optimization Based on Different Types

Keyword optimization is not a one-size-fits-all process. It should be tailored based on the performance of each keyword type. For instance, keywords with poor conversion may need to be paused or have their ad copy tested. Keywords with good conversion but high ACoS may need their bids gradually reduced. High-converting keywords with low ACoS can have their bids increased to maximize sales. And for keywords without orders, their relevance should be examined, and bids increased if needed.

Utilizing Filter Views for Optimization

Filter views in the bulk operation sheet can significantly simplify the optimization process. It allows you to focus on specific aspects of your campaign, such as enabled campaigns, ad group status, match types, and more. This targeted approach can help you make precise adjustments based on your campaign’s specific needs, leading to more effective optimization.

The first thing you need to do is create new filter view for better optimization, follow this example:

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Adding Columns to the Bulk Operation Sheet

Adding relevant columns to the bulk operation sheet provides valuable insights into your campaigns. Columns such as click-through rate (CTR), conversion rate, cost per click (CPC), and others offer a comprehensive view of your keyword performance. With this information, you can make informed decisions and adjustments that can significantly improve your PPC campaigns.

Then you need to add specific columns to the bulk operation sheet for better insight. Begin with adding 6 column to the right side of the columns highlighted below:

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Then, add names for these columns like shown below:

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Now for a better understanding of the columns, choose to present the values in number form for the selected rows as shown below:

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Now, decrease the decimal places:

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Now, begin by calculating the CTR for the bulk sheet. To do this divide clicks by impressions as shown below:  

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Lets calculate CVR, for which you divide orders by clicks:

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Next, you have to calculate CPC and this is done by dividing spend by clicks:

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For Click/Order rate you simply divide clicks by order:

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For CPA, you have to multiply CPC and Clicks/Order:

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Now for Max CPA just set your profit margin, here we have used 1.5 as an example:

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Identifying Keywords with Poor Conversion

Keywords with poor conversion are those that generate many clicks but few sales. These keywords can quickly drain your budget without delivering a return on investment. Therefore, it’s crucial to identify these keywords using your bulk operation sheet. Once identified, you can pause these keywords or test different ad copies to improve their performance.

To identify the keywords with poor conversion, begin by choosing only keyword and product targeting, as shown below:

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Then click on Campaign, and select enabled option only:

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Next, you have to make sure ad group is also enabled:

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Then, make sure status is enabled:

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For Match type, make sure you uncheck negative exact and negative phrase:

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Also, make sure impressions are sorted A->Z:

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After this you should be able to identify which keywords are providing the least conversion by clicking on CTR and checking.

Identifying Keywords with High Conversion and High ACoS

Some keywords may have a high conversion rate but also a high ACoS. This means they are driving sales but at a high cost. Identifying these keywords is crucial as they could be eating into your profits. You can manage these keywords by reducing their bids gradually or optimizing their ad placements to lower their ACoS.

Identifying Golden Keywords

‘Golden’ keywords are those with high conversion rates and low ACoS. They bring in significant sales at a low cost. Identifying these keywords allows you to capitalize on their success. By increasing their bids, you can ensure they continue to bring in valuable sales at a profitable ACoS.

Identifying Keywords with No Orders

Some keywords might garner many impressions and clicks but result in no sales. Identifying these keywords can help you understand why they’re not converting. You can examine their relevance, the quality of the landing page they lead to, and consider increasing their bids if they are indeed relevant.

Strategies for Specific Types of Keywords

Different types of keywords require different strategies. For instance, for keywords with poor conversion, you might need to pause the keyword or adjust your ad copy. For keywords with high ACoS, consider lowering your bids. For your ‘golden’ keywords, consider increasing your bids to maximize their potential.

Reviewing and Adjusting Bids

Regularly reviewing and adjusting your bids is crucial to the success of your PPC campaign. This involves analyzing your keyword performance data and making necessary adjustments to your bids. Remember, the goal isn’t to have the highest bids, but to have the most effective bids that will result in the highest return on investment.

Handling Different Color-Coded Keywords

Color-coding your keywords can help you quickly identify which keywords need attention. For instance, you might color-code keywords with high ACoS in red, indicating that they need to be reviewed and possibly have their bids adjusted. On the other hand, ‘golden’ keywords could be color-coded in green, indicating that they are performing well and could potentially have their bids increased.

Final Steps and Tips

Optimizing your Amazon PPC campaigns is a continuous process that requires regular review and adjustments. Remember to focus on profitability, keep track of your ACoS, and don’t be afraid to test different strategies. Regularly review your campaigns, make necessary adjustments based on performance data, and always be open to learning and experimenting.

Wrapping Up

In conclusion, optimizing Amazon PPC campaigns is a multifaceted process that requires a strategic approach, continuous monitoring, and regular adjustments. By understanding the common mistakes in PPC optimization, recognizing the importance of negative targeting, and utilizing tools like the Bulk Operation Sheet, advertisers can optimize their campaigns effectively.

Classifying keywords based on their performance allows for more targeted optimization strategies, and identifying these keywords is crucial for maintaining a profitable campaign. Regularly reviewing and adjusting bids, and handling different color-coded keywords, allows for continuous improvement and better performance. It’s important to remember that PPC optimization is not a one-time task, but an ongoing process that requires regular attention and adjustments.

As with any marketing strategy, there’s always room for improvement and experimentation. Keep testing, keep learning, and keep optimizing to reap the full benefits of Amazon PPC advertising. With the right approach and consistent effort, you can maximize your Amazon PPC campaigns’ effectiveness, reduce your ACoS, and boost your return on investment.

Ultimately, the key to PPC optimization is understanding that it’s not just about spending more on advertising—it’s about spending smarter. By using the strategies outlined in this guide, you can make your PPC campaigns work harder for your business, helping you achieve your sales goals and grow your online presence.

Remember, the world of Amazon PPC is ever-evolving, so keep yourself updated with the latest trends and changes. Stay flexible, stay informed, and most importantly, stay committed to optimizing your campaigns or consult with Amazon PPC Services provider. By doing so, you’ll be well on your way to mastering Amazon PPC and taking your business to new heights.

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