How does Amazon PPC work

Amazon PPC: The Ultimate Guide for 2021

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With a brand value of $ 125,263 million, Amazon is the third most valuable brand in the world. Almost everyone knows Amazon. It is the largest eCommerce company in the world.

A 2018 study shows that41% of shoppers start their product search on Amazon and eventually buy from Amazon.

Here's a quick look at Amazon customer buying behavior:

  • ~ 2/3 of buyers never look on the 2nd page of search results
  • ~ 1/3 of buyers click on the very first product
  • ~ 2/3 of the buyers click on one of the first three products

These statistics show that it's time to get your products on the first page of search results. After all, you want to sell them.

But how can you achieve that?

With Amazon PPC...

You can create campaigns for specific keywords to promote your product to the exact customers who are looking for it. So you can increase your sales and improve your ranking.

If you want to know how to set up an Amazon PPC campaign, you've come to the right place.

These are the contents of this article:

  • What is Amazon PPC?
  • Why do you need Amazon PPC?
  • Who can use Amazon PPC?
  • How to create a campaign
  • The best strategies
  • Etc...

What is Amazon PPC?

Amazon PPC means Amazon's advertising platform (Amazon Marketing Services). If you are an Amazon retailer, you can use PPC to promote your products.

PPC means Pay-Per-Click = You only have to pay when someone clicks on your ad.

You can set up Amazon PPC campaigns for specific keywords. So you can exactly Target the users who are intrinsically searching for your product.

Amazon's auction model

Amazon calculates PPC costs based on an auction model. Let's look at the following example:

You target the keyword "bottle" and your bid is $ 1. Competitor A offers $ 1.5 and Competitor B offers $ 2.

You$1
Competitor A
$1,5
Competitor B
$2

Who will win this auction?

The one with the highest commandment.

Competitor B wins the auction and pays $ 1.51 even though his bid was $ 2.

This is how Amazon PPC works.

Most CPCs (cost-per-click) aren't that expensive after all. Here is an infographic of average Amazon PPC scores:

Ad formats

There are three types of ad formats:

Sponsored Ads

Sponsored Ads is the most common ad format. They appear in search results or carousels. You can set it up manually or automatically.

While automatic campaigns are content-based (based on the content of your listing), manual campaigns are keyword-based (based on the keywords you choose).

You can run automatic campaigns to collect keyword data that you can use for manual campaigns. For example, you can take keywords with an excellent ACoS (Advertising Cost of Sale) from your automatic campaigns and add them to your manual campaigns.

When it comes to sponsored ads, it is extremely important to search for relevant keywords. You have to look for keywords that convert. After all, you want to make sales.

But how can you find these keywords?

You have to look for the keywords that are your competition between positions 0 and approx.5 Rankings holds.

Why?

Because ~ 90% of sales come from these keywords.

And with this strategy you will find exactly these keywords:

Headline Search Ads

You can only use Headline Search Ads if you have your brand inAmazon Brand Registry registered.

These ads are more expensive and have an additional cost per click, but they are very effective.

Product Display Ads

Product Display Ads are only available to Amazon Vendors. You can post ads in your competitor's listings just below the "Add to Cart" button. That makes it easy for you to tap into customers from your competition.

Why should you use Amazon PPC?

There are three simple reasons why you should use Amazon PPC:

All people buy products on Amazon

With more than 2.5 million monthly website visits on Amazon.com alone Amazon is the largest online marketplace in the world.

According to the latest statistics, start 66% of customers search for products on Amazon (41% start their product search on Amazon and complete a purchase).

Additionally, 59% of 16 to 36 year olds go to Amazon before any other eCommerce website. (Inviqa)

You have to sell your product

If you don't promote your product, you won't get any sales.

Check out these stats:

  • ~ 2/3 of buyers never go past the first page of search results
  • ~ 1/3 of buyers click on the very first product
  • ~ 2/3 of the buyers click on one of the first three products

Sure, you can promote your products through other channels like Facebook or Deal Pages, but Amazon PPC should be an integral part of your strategy.

You have to rank organically

If you have a want to become a successful Amazon retailer, you need to understand how Amazon's algorithm works.

Amazon's algorithm is based on one principle:

Amazon wants to generate the greatest possible sales.

Accordingly, you need to close sales in order to improve your organic ranking.

If you sell your products continuously, your organic ranking will improve and you will get more passive sales.

As long as you don't Selling books on Amazon, Amazon PPC is not an option, it is a requirement.

Who can use Amazon PPC?

If you have a Amazon Vendor you have access to Sponsored Ads, Headline Search Ads, and Product Display Ads.

Amazon dealers with a Professional Seller Account have access to Sponsored Ads. Only dealers who share their brandAmazon Brand Registry registered can use Headline Search Ads.

Just Amazon Vendors can use Product Display Ads.

You should understand that ...

If you want to run a profitable Amazon PPC campaign, you need to understand the basics first.

First of all, there are two metrics that you need to consider:

Sales and ACoS.

  • Sales: You know what sales are.
  • ACoS: advertising costs of sales.

Your ACoS decides on the success or failure of a campaign.

Break-even ACoS

ACoS stands for Advertising Costs of Sales.

In any case, you don't want to lose any money serving ads on Amazon.

For this reason, your ACoS (Advertising Costs of Sales) must not exceed your actual profit margin.

ACoS = profit margin ⇒ break-even ACoS

Target ACoS

Sure you don't want to lose money. But in general, you want to make money.

If you want to make a profit, your ACoS must be lower than your profit margin, before the advertising costs are deducted.

ACoS

Profits

If you want to calculate your bottom line, you need to subtract all of your advertising costs:

Keyword matching types

As with any advertising platform, there are different types of keyword matching types.

  • Broad Match: Search terms that contain all of the specified keywords in any order + others.
  • Phrase Match: Search terms that contain all given keywords in the same order + others.
  • Exact Match: Search terms that exactly match the keywords entered.

Here is an infographic that shows the differences between these three types of keyword matching types:

Create an Amazon PPC campaign

Most merchants find it difficult to run a successful PPC campaign from the start. In fact, 51% want to improve their advertising strategy:

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If you want to be successful with Amazon PPC, you should follow the steps below.

Keyword research

We already have a strategy with you Helium 10 Cerebro to find out which keywords your competitors are ranking for.

However, there is one other tactic that you should use. You need to search for keywords relevant to your main keyword:

Optimize your Amazon listing

The Optimizing your Amazon listing is a MUST when it comes to PPC. You have to spend money on advertising, so you ultimately want to get the best results possible.

For example, if you have your Register your brand with the Amazon Brand Registry, you can add video content to your listing.

A video can improve your conversion rate by up to 80%.

You also need excellent reviews. 60% of people see reviews as their most trusted source of information:

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If you have ZERO reviews, you won't make a single sale.

I recommend reading our guide to optimizing an Amazon listing and Amazon reviews.

Product picture

It's no secret that your product image is extremely important. Just take a look at this heat map:

You can tell that people are only looking at the main photo to decide whether or not to give a product a chance.

Unfortunately, due to Amazon's guidelines, there aren't many ways to stand out from the crowd.

However, there are two things that an image should meet:

  • High quality
  • Dominant image

You don't know what a dominant image is?

Just take a look at Apple's marketing strategy:

Instead of promoting their product through technical details (1 GB storage space), they say "1,000 songs in your pocket" (benefit).

Also, you can see that they have a dominant product design along with a dominant product image.

It is no accident that Apple is so successful. Learn from their marketing strategy and try to implement their tactics.

Your goals

As always, you need to set goals. If you don't have goals, you don't know what you want to achieve in the months or years to come.

When it comes to Amazon PPC, there are two crucial metrics that you need to keep an eye on.

SALES and ACOS (after all, you want to sell something and make a profit in the process).

Another thing you should do is monitor your conversion rate. If you have a bad conversion rate, your ACoS will skyrocket.

So track at least these three metrics:

  • Sales
  • ACoS
  • Conversion rate

Structuring your Amazon PPC campaigns

This is the standard structure of an Amazon PPC campaign:

campaign

Ad group 1

Ad group 2

If you are only selling one product on Amazon, there is not much to consider when structuring your campaign.

However, if you sell multiple products, then you need to structure your campaign in such a way that you can accurately measure the performance of each product or keyword.

Putting all products in one ad group would be counterproductive, as each product has a different price, a different conversion rate, etc ...

Because of this, you need to create a single ad group for each product that contains only the keywords that are relevant to that product.

So you can precisely analyze all data, such as keyword data.

Optimize your Amazon PPC campaign

Optimize keywords

Depending on the keyword matching type you choose, Amazon will show your products for different searches.

For example, if you include the keyword "bags" with Broad Keyword Match If you choose, Amazon will also show your product for "sports bags".

However, if you sell leather bags, no one is going to buy your product because customers are looking for sports bags.

There are two ways to avoid this:

  • You can Exact Keyword Match use.
  • You can Negative keywords use to exclude certain keywords.

Update products

Over time, you'll know which products convert and which don't.

So instead of spending money on products that don't make any money, only promote products that convert.

So you can spend even more money on products that generate sales and increase your income.

Automatic campaign keywords

Running an automated campaign is a great way to collect keyword data and find keywords that are making you money.

If you have the budget, you can run an automatic campaign and then include the best performing keywords in your manual campaigns.

Optimize your CPC bids

You can optimize your CPC bids to improve your ACoS and thus optimize your campaign.

Bad ACoSLower your commandment
Good ACoSRaise your bid
Keywords don't generate salesRemove keyword

Summary

By now you should have a good idea of ​​how you can use Amazon PPC to grow your business.

Here are the main takeaways from this article:

  • Optimize your listing: Make sure you have a great product photo and positive reviews.
  • Find keywords that convert: UseHelium 10to search for keywords that will bring you sales.
  • Define your business goals and optimize your ACoS: If you don't know your goals, you won't be able to improve your PPC strategy.
  • Promote products that convert: You don't want to spend your money promoting products that don't sell.
  • Don't waste your time: It is necessary to tweak your bids from time to time, but there is no need to make small changes throughout the day.

Promote your product on other channels

If you're thinking about promoting your products on other channels, this infographic will help you get started.

Take a look at these too 5 SEO and PPC trends 2020.

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