If you’re running an Amazon store, you’re likely familiar with Amazon’s advertising program, Amazon PPC. Amazon PPC is a great way to get your products in front of more potential customers, but it can be confusing to figure out how it works. Considering Amazon has more than 300 million customers, it’s not surprising businesses are eager to advertise on Amazon. Also, Amazon generates over $74 billion in sales annually in the USA alone, which is growing. Amazon PPC is incredibly effective in reaching new customers and driving sales. You can target shoppers who are already interested in buying products like yours. Plus, Amazon’s ad platform is easy to use, so you can get started quickly and see results fast. In this post, you’ll learn:
- What is Amazon PPC
- Why is PPC important for Amazon Sellers
- What are the ad types
- What are the requirements to run a PPC campaign
What is Amazon PPC?Amazon PPC (pay-per-click) is a paid advertising service that allows you to advertise your products on the Amazon marketplace. PPC ads are usually the first results customers see in search results. This gives your brand a competitive edge over competitors who aren’t advertising on Amazon. This is a great way to target customers who are already looking for something they want to buy—and since they’ve already started searching, they’re likely ready to purchase immediately.
How to Set Up an Amazon PPC Advertising Campaign (Step by Step)Let’s start your first PPC campaign and get you up and running immediately.
Step 1:The first step is to sign in to your Seller Central account. If you don’t have an account, please create a new one.
Step 2:Once you’re signed in, select Advertising from the menu on your Seller Central homepage. You will then be able to choose Campaign Manager once you have selected Advertising.
Step 3:Since Upscale Valley has created many campaigns for its clients, the dashboard might be different from the initial interface. To create a campaign, click the “Create Campaign” button.
Step 4:We have discussed above that if you are new to Amazon Seller Central, you can choose Sponsored Products. You can choose Sponsored Brands or Sponsored Display if your brand is registered. To make things easier for you, I have selected Sponsored Products, which are ideal for all sellers.
Step 5:The following step allows you to enter the name of the Campaign, the Start and end date, the daily budget, and the type of targeting you want to use.
Step 6:In the campaign bidding options, you can choose between Dynamic bids – down only, Dynamic bids – up and down, and Fixed bids.
Step 7:In the Products section, you can add your products that need to be promoted in the campaign in order to get the best results.
Step 8:Moreover, you can specify your Negative Keywords. Negative keywords are words or phrases you do not want your ad to appear for. This is important because you don’t want to waste your money on clicks that will never convert. Adding negative keywords can help ensure that your ad only appears for searches relevant to your business.
Step 9:You have now finished developing your campaign, and it’s time to test if it was a success. 😀
How Does the Amazon Advertising Auction Work?The Amazon Advertising Auction uses a second price auction model, which means that the advertiser pays one cent more than the next highest bidder. This ensures that all advertisers pay a fair price for their ads and that ads are displayed to as many relevant shoppers as possible. When a shopper searches on Amazon, our system looks at all of the ad campaigns that are eligible to show for that particular search. The system then determines which ads will be most relevant to the shopper and ranks them accordingly. Once the ads are ranked, the system looks at how much each advertiser is willing to pay per click and begins the auction. Still didn’t get it? Think Amazon PPC as eBay, where you place a bid on an item and enter into an auction with the seller. The current highest bidder will be displayed on the listing page, and each subsequent bid will be higher than the last. The auction will continue until no more bids or the listing ends. At that point, the highest bidder will win the auction and be obligated to purchase the item from the seller. Moreover, the Amazon Advertising auction is a real-time bidding platform (RTB). This means that your ads will be shown to potential buyers as soon as you make a bid.
Why Is Amazon PPC Important for Amazon Sellers?Amazon PPC is one of the fastest and most efficient ways to grow your business, but it’s not a strategy every Amazon seller uses. So why should you start? We’ll tell you exactly why.
1. Cost-EffectiveAmazon PPC is a cost-effective way to drive traffic to your product listing. When done correctly, it can be a potent tool to help increase your sales and visibility on Amazon. Compared to other marketing strategies, such as SEO and SEM, Amazon PPC can be more cost-effective in the long run because when you advertise your product on Amazon, it is more likely to be converted into a purchase because Amazon users trust the company. Another advantage of using Amazon PPC is that it can help you target a specific audience. For example, you can target people who had visited your product listing before but didn’t purchase anything. Or, you can target people who have purchased similar items on Amazon.
2. High Conversion RatesAmazon PPC has several advantages over SEO and SEM regarding conversion rates. First, Amazon PPC is a paid advertising platform, which means you are guaranteed to get your ad in front of potential customers actively searching for products like yours on Amazon. Moreover, Amazon PPC ads are highly targeted, meaning that you can specifically target shoppers most likely to be interested in what you offer. Finally, Amazon PPC ads are also very flexible, allowing you to adjust your budget and bids according to your needs and goals. Consequently, you can significantly boost your conversion rate and ROI from Amazon PPC by taking advantage of all these factors.
3. Grow Your Business FastIn a competitive market, organic growth can be slow, especially if your business is selling products and you are relying heavily on word-of-mouth and organic search traffic to generate traffic to your product. It’s proven that Amazon PPC can boost your product’s visibility and sales, which is an effective way to grow your business and achieve your sales goals more quickly.
4. Flexible and ScalableThe Amazon PPC system is flexible and scalable according to the needs of your business. You can adjust your bids at any time to ensure that you are getting the most out of your ad spend, and you can also scale up or down your campaign as needed. This makes Amazon PPC an ideal solution for businesses of all sizes. Additionally, Amazon PPC is a great way to test different keywords and ad copy before investing in a more extensive SEO or SEM campaign. By running a small Amazon PPC campaign, you can see which keywords are performing well and adjust your other marketing efforts accordingly.
5. Control Your Advertising SpendAmazon PPC gives you complete control over your advertising spending. You can set your budget and choose how much you want to spend on each ad campaign. This allows you to control costs and ensure you get the most out of your advertising budget. Additionally, Amazon PPC provides detailed reporting so that you can track the performance of your campaigns and make necessary adjustments to optimize your results. And you have the flexibility to change your bid prices and target keywords at any time, giving you complete control over your advertising strategy.
6. Set up Targeting FiltersYou can use Amazon PPC to set up targeting filters for your ads. This allows you to target specific groups of customers based on factors like their location or the type of device they’re using. By targeting your ads more effectively, you can improve your conversion rate and lower your costs. To set up a targeting filter, go to the “Campaign Manager” page and click on the “Targeting” tab. Then, click on the “Create Targeting Filter” button. Enter a name for your filter and select the criteria you want to use. For example, you can target customers in a specific country or who are using a certain type of device.
7. Visible to Amazon Customers OnlyAmazon PPC ads are only visible to Amazon customers, which is good for Amazon sellers. As an Amazon seller, you want your product to be seen by as many potential customers as possible. However, you don’t want to spend your entire advertising budget on ads that no one will ever see. By targeting only Amazon customers, you can be sure that your ad dollars are well spent. Another advantage of Amazon PPC ads is that they are highly targeted. When someone searches for a product on Amazon, they are already interested in buying that type of product. If your ad is relevant to their search, they are likelier to click on it and buy your product.
8. Purchase-Ready AudienceIf you have a product that people want to buy, you should consider advertising it on Amazon. The reason is simple: the average Amazon customer is ready to buy and looking for specific items. If your product fits one of those criteria (and it should), then you’ve got a great chance at making sales through PPC ads. Just think about what happens when someone searches for “dog toys” on Google. They get generic results like “best dog toys for puppies,” which isn’t helpful. But on Amazon’s front page, there are tons of products that match the search query perfectly – they’ll make sure your ad shows up right beneath those products or in their category pages, so people see it when they look for dog toys. In addition to this excellent targeting ability, Amazon shoppers tend to be highly qualified buyers because they’ve already shown interest in purchasing something similar before browsing around online or purchasing an item from another seller’s website. It means these shoppers have already researched buying something similar before making their purchase decision. There’s less friction between finding what would work best for them and just generalizing based on availability alone.
What Are the Amazon PPC Ad Types?
What are the Requirements to Run a PPC Ad?
Active Seller Account
Amazon Brand Registry:
What Are the Factors affecting the PPC Placements?However, some factors can give your product better placement or visibility on Amazon. To know more about these factors, read on.
- CPC. The person with the higher CPC has a better chance of winning in Amazon PPC. This is because the person with the higher CPC is willing to pay more per click, which means they are more likely to get their products seen by potential customers.
- Higher CTR. The higher the CTR, the better chance you have of winning Amazon PPC. A high CTR indicates that your ad is performing well and is relevant to users, which makes it more likely that they’ll click on it. This increases your chances of winning the PPC auction and getting your ad displayed on Amazon.
- Better Keyword Targeting. If you want to win Amazon PPC, you need to choose your keywords carefully. The better your keyword is, the better your chances of winning will be.So, what makes a good keyword? There are a few things you’ll want to consider. First, think about what potential customers are likely to search for. Second, make sure your keyword is relevant to your product or service. And finally, try to choose a keyword that’s not too competitive.
- Budget. How much you are willing to spend on your ads will impact where they are placed. If you have a lower budget, your ads may not appear as often as those with a higher budget.
- Ad Quality. The quality of your ad, including the image and text, will also impact where it is placed. Ads that are well-designed and relevant to the product will generally be placed higher than those that are not.
- Product quality. The quality of your product will also play a role in ad placement. Products that are well-made and relevant to the keywords used in the ad will generally be placed higher than those that are not.
What Are the Basic Terms Used in Amazon PPC?
- Advertising placement. It is the placement of an advertisement on Amazon. Ads can be placed on different parts of the site, including product pages, search results pages, and detail pages.
- Budget. Budget is the amount of money you are willing to spend on advertising. It’s calculated by multiplying your daily budget by the number of days in your campaign.
- Bid. The bid is the amount of money you are willing to pay for each click on your ad. The bid is also known as the cost per click (CPC).
- Keywords. Keywords are the words or phrases that you choose to trigger your ads. When a customer searches for a keyword, your ad will appear in their search results. The aim of keywords is to target specific searches on Amazon and ensure that the products you sell are relevant to what people are searching for.
- Demand-side platform (DSP). A demand-side platform (DSP) is an Amazon platform that helps advertisers manage their online advertising campaigns. It’s an auction-based platform, allowing advertisers to bid on impressions using real-time bidding (RTB).
- Advertising Cost of Sales (ACoS). It is the ratio between the cost of your sales and the revenue you generate. In simple terms, it’s how much you paid advertising costs per each dollar of income your ad generated. ACoS indicates how well your ads are working and helps you decide whether or not they should continue running on Amazon PPC. For example, if your ACoS is low (under 10%), fewer people are clicking on your ads than expected based on their relevance to customers searching for similar products or services.
- Target ACoS (TACoS). Target ACoS is calculated by dividing your advertising costs by the total number of conversions. The higher you set your target ACoS, the less you will spend to acquire each customer. However, if you are spending more on advertising than what each customer is worth to you, then this is not a good strategy.
- Return on Ad Spend (RoAS). It’s calculated by dividing the amount you spend on advertising by the total revenue generated from that campaign. For example, if you spent $1,000 on Amazon PPC and made $5,000 in sales, your ROAS would be 5x (20% — 1000 / 5000 x 100).
- Conversions. Generally, this measure measures how often your ad ended with the desired result. Examples include clicking “Add to Cart,” making a purchase, etc.
- Conversion rate. The conversion rate measures how frequently your advertising campaign achieves the desired result. The conversion rate is the number of conversions divided by the number of clicks.
- Cost-per-click (CPC). Cost-per-click (CPC) is the amount you pay for each click on your ad. The lower your CPC, the less you will pay for each click.
- Click-through Rate (CTR). Click-through rate (CTR) is the ratio of clicks to impressions. It’s usually expressed as a percentage, one of the most important metrics in PPC. A high CTR means that your ads are being seen by a lot of people and that those people are clicking on them.
- Automatic Campaigns. Automatic campaigns are managed by Amazon and are a primary option for new sellers. They’re great for testing different keywords, ad copy, budgets, and maximizing ROAD. Automatic campaigns also allow you to scale quickly by automatically adding new products as Amazon approves them.
- Manual Campaigns. In a manual campaign, you, as the seller, decide which products to advertise, where to advertise them, and how much to bid on keywords. You also have complete control over your ad budget and can adjust your bids anytime.
- PPC Spend. PPC spending refers to the money spent on PPC advertising. It is a part of the total advertising and marketing budget, which means it’s a part of your overall sales budget.
What are the 3 Amazon Keyword Match Types?When setting up a keyword-based ad campaign on Amazon, you’ll have to choose which keyword match type to use. You can use three keyword match types on Amazon: broad, phrase, and exact. Here’s how they work:
Broad match keywords
Phrase match keywords
Exact match keywords
What Are the Difference Between Manual and Automatic Campaigns?Manual campaigns are more flexible. You can create and manage your ads by hand, including manual bidding, or you can use automatic campaign settings to set up a budget, target keywords, and create ads without having to do any of the work yourself. Automatic campaigns are more efficient. With an automatic campaign, Amazon does all of the legwork for you and automatically optimizes for conversions — meaning that your costs should be lower because Amazon is choosing which keywords and placements will get you the most bang for your buck (and thus drive conversions). But Automatic campaigns are more expensive in some cases. While automatic campaigns may save time and energy in the long run, they often cost more up front than manual ones do — because they’re optimized to deliver results at all times rather than just during busy hours when users are willing to pay higher prices for their products/services.
Which Are Better: Organic Sales or PPC Sales?Both organic and paid marketing can be effective on Amazon, but you don’t want to rely on either one exclusively. It’s all about the Amazon algorithm, which determines what products are shown in your product listings.
Advantages of Organic SalesThe advantages of organic sales are:
- They’re free. You don’t have to pay Amazon or anyone else for the privilege of receiving organic clicks.
- They’re less competitive. Organic clicks tend to come from more trusted sources, like people who have bookmarked your site and regularly visit it, not just anyone who happened upon your listing because they wanted something else but then stayed because they saw something interesting in one of your ads (which is what happens with PPC clicks).
Advantages of PPC advertisingPPC advertising has several advantages over organic search.
- PPC is more targeted and can be more cost-effective. With paid advertisements, you can target specific keywords or phrases to attract and reach people who are interested in a particular product or service. This allows you to reach highly targeted audiences that would otherwise be difficult or impossible to find organically.
- PPC is flexible and easy to scale. When your business grows and expands with new products or services that require additional ad campaigns targeting different keyword sets, this type of marketing provides an ideal way for scaling up quickly without having to make fundamental changes in your existing strategy.
Which is better?The answer to this question is simple: you need both. Organic sales will allow your product to be discovered by more potential customers, while PPC ads can help you get your products noticed by people searching for something similar. With both organic and paid marketing, you’ll be able to create a comprehensive campaign that ensures that the right people see your products all day and night.
Is Amazon Advertising Worth It?Amazon advertising is a great way to reach customers, but it’s not suitable for everyone. You should ensure you understand the advantages and disadvantages of Amazon advertising before pulling the trigger on your first campaign. We’ll look at the pros and cons of Amazon ads so that you can make an informed decision about whether or not this marketing channel can help grow your business.
Advantages of Amazon Advertising
- Amazon has a huge customer base. With more than 310 million customers, you can reach a diverse audience through Amazon advertising. While Google allows you to target specific audiences based on age, gender and location, this option isn’t available when advertising with Amazon. However, even without targeting specific groups of people on Amazon, you’ll still be able to reach your target audience because the site attracts users from all over the world who have similar interests and needs.
- It’s cost-effective. Many advertisers find that advertising on Facebook and other platforms is expensive because they have to pay for impressions (when their ads are shown) or clicks (when consumers click on their ads). But with Amazon Advertising, you only pay for clicks—and there are no impressions fees at all.
Disadvantages of Amazon AdvertisingWhile Amazon advertising is growing in popularity, it’s not a good idea for every business. In fact, some businesses will find that Amazon advertising doesn’t work for them at all.
- It’s expensive. Amazon PPC is not for every business because it can be costly. Also, you need to have a good understanding of how Amazon PPC works to be successful with it. If you are unwilling to invest the time and money into learning how Amazon PPC works, then it is probably not the right marketing strategy for your business.
- Competitors can see your listings. Your competitors can see your listings and even the bidding strategies you use. They will know how much you are bidding, your product prices, how well your products are selling, and what inventory is available. This information gives them an advantage over you in two ways: They can price their products lower than yours to attract more sales. They can change their listing or search term strategy to show up higher on Amazon’s search results pages.