How to run your first PPC campaign on Amazon? Competing for the position of your product.

When launching a new product on Amazon, you have the impression that in the sea of products already available, your product will end up at the back of the line, getting lost before it even gets to fight or being hit by shrapnel (hijack, bad reviews, etc.) and bleeding out there. Unfortunately, this is indeed a scenario that one can often encounter, but you must not give up at the starting line; you must fight for your product's ranking and Sales Rank.

Remember that Amazon is the largest e-commerce platform in the world, with millions of products, for which visibility is fought over by entire companies and even armies of sellers, marketers, manufacturers, resellers, brand owners, and importers. But don't worry, it's a fairly level playing field since the arsenal of tools available to all sellers is similar, and the battlefield, i.e., the marketplace, has the same rules for all players. It is important to realize the principle that - "Rome wasn't built in a day." You need tactics, tools, but above all, patience and effectiveness in your actions for your product to stand out among others. This won't happen in a day, a week, or even a month, but PPC will definitely allow you to effectively fight for your product and who knows, it may even help you receive the "Amazon's choice" medal.

Below, we will guide you through the process of launching your first advertisement on Amazon in 4 simple steps. To begin with, however, a few words about what PPC is and what nomenclature is associated with it.

What is Amazon PPC?

PPC, or Pay Per Click. Campaigns in this model, also known as "Sponsored Products," are based on a simple solution where you, as the advertiser, pay for each click on the ad redirecting to your product listing. It is an effective tool for product promotion, but if not managed effectively, it can also become a money pit.

PPC campaign metrics.

Below is a brief summary of the most important terms you will encounter when creating a PPC campaign.

Bid - is the amount you are willing to pay for one click on the ad redirecting to your product

Daily Budget - is the amount you will allocate daily for the campaign - with an amount of EUR 20 and a Bid of EUR 0.40 (in most categories, this is the Default Bid), you can expect 50 visits to your listing

Keywords - the keywords of your campaign, which will trigger your ad to appear for potential customer queries

ACoS or Advertising Cost of Sales. This is a percentage indicator showing what sales you achieved versus the costs incurred for that campaign. The formula for ACoS is ACoS = sum of PPC campaign expenses / sum of sales generated by the PPC campaign x 100.

Step 1: Product is paramount 

Without a good product listing, your campaign simply won't be effective, period. We've already written about how a listing should look, and it's worth revisiting. You can find the details here.

Additionally, it should be noted that the information contained in the product data in Seller Central affects PPC campaigns. From the information we include in the product name, bullet points, and product description, Amazon's algorithm will automatically select the keywords for which your product ads will be displayed.

Step 2: Decide what type of campaign you want to launch.

Generally, there are two types of Amazon PPC campaigns. Automatic and manual campaigns. In the "Targeting" section, you can choose one of them. Below, we will clarify their advantages and disadvantages.

AUTOMATIC CAMPAIGN:

Amazon selects keywords for you, based on which the campaign will be run. This selection is influenced by two elements. The first is the product information contained in the product listing, and the second is searches within the category and keywords of competing products.

Advantages of automatic PPC campaigns:

+ Easy. It requires no knowledge of keywords or targeting - Amazon selects them for you

+ Quick. This is the fastest way to launch a product campaign

+ Budget under control. You have full control over the campaign budget.

The disadvantages of automatic PPC campaigns are:

- Limited control over campaign targeting

- Passive campaign. We have no influence over the keywords selected by Amazon for the campaign

- Detailed campaign expenses are not entirely clear.

The other option is a manual campaign. In this case, you decide which keywords the campaign should target and how much to spend on each keyword. Of course, manual campaigns also have their pros and cons.

Pros of manual campaigns:

+ Full control over the campaign

+ Tangible benefits. You can see which keyword brought what return on investment and exclude those keywords that do not convert sufficiently

+ Budget control. You can choose which keywords the campaign targets, allowing you to allocate the budget to less popular keywords with higher conversion rather than spend it on popular phrases with low conversion. Based on this, you can find your golden mean and mix keywords in terms of costs and sales they generate.

Cons of manual campaigns:

- Time-consuming compared to automatic campaigns

- Incorrect choices can arise in these campaigns, especially at the beginning; your budget may be burned on low-conversion keywords. This is the cost of knowledge you gain from such a campaign, which you will use in future ones.

The best way to manage these two types of campaigns is to combine them. Initially, you run an automatic campaign to gather information about keyword conversions, ACoS ratios, analyze the results, and then based on them, you launch a manual campaign.

There are many external tools on the market that support this process. Some analyze the results of automatic campaigns, based on which they suggest which keywords to include in the manual campaign. More advanced tools also take into account the ranking of organic keywords and correlate them with the results of the automatic campaign. Some of them even allow calculating net profit per product, considering the budget spent on the campaign, and estimate what increase in organic sales is correlated with the results of PPC campaigns.

Step 3: Choosing keywords

Regardless of whether you choose a manual or automatic campaign, you will encounter three types of keywords:

Broad match keywords. Your product ad will appear for various variations and related words to your keyword. If someone uses a different form of the word, misspells it, your ad will still show to the user. The advantage of this is that we have a wider reach for our campaign and can find keywords that are aligned with our keyword, which may turn out to convert well. However, it may also happen that our campaign targets categories that we do not care about.

Phrase Match - in this option, our keyword(s) may appear in the search results for entire phrases, known as the "long tail." What could this look like in practice? Our keyword is "red mug" - our product ad will also appear in search results for phrases like "red mug for tea" or "ceramic red mug".

Exact Match. In this option, the ad will be displayed only for the search results of that exact phrase. This narrows the campaign's reach but increases relevance and lowers our ACoS.

Keyword research is a topic for another article, but generally, you can use several sources:

Amazon - start typing your keyword in the Amazon search bar for that marketplace and see what variations the search engine suggests. These are the most frequently searched phrases related to your keyword.

Competition. Check the TOP 100 categories in which you will be listing and see which phrases appear most frequently in the names and bullet points.

External keyword sourcing tools:

General - such as Google Trends, Google Ads, Wordstream, or Keyword Tool

Tools dedicated to Amazon, such as Jungle Scout or Helium10

Most categories have keywords that are the "workhorses" of that category. They have high search volumes but are also very competitive and therefore expensive. The ideal situation is to find keywords that convert well but are relatively niche and thus cheaper. If we find more of such keywords, it turns out that their total can provide us with traffic volume similar to that given by the main keywords, and our sales will significantly advance, thereby maintaining a good ACoS ratio. This phenomenon is referred to as "lifting all boats."

Step 4: Invest, optimize, win.

PPC campaigns should be an inseparable part of selling on Amazon, not just in the initial phase of a product's life. To fully experience the benefits of PPC campaigns, they should be run continuously and be constantly optimized to increase sales and lower ACoS. Remember that as PPC sales increase, your Sales Velocity rises, potentially increasing the number of product reviews as well, the sales rank moves towards the first place, and consequently, your organic sales will also grow.

Below we have gathered a few tips on what to pay attention to when optimizing PPC campaigns:

1. Get rid of weak keywords.

If you discover a keyword that does not convert well and only consumes campaign funds, place it as a negative keyword for the campaign - Negative Keywords. Particularly automatic campaigns can contain many such words.

2. Optimize your product listing.

If the analysis of the keywords from the PPC campaign shows that there are non-productive keywords in it, you should check whether such words are in your listing. If it turns out that such a word is in the name, description, bullet points, or in the "Keywords" section of your listing, remove it from there and try to replace it with another word that has better prospects.

3. Get the most out of your keywords.

Your campaign has been running for some time now, and it turns out that you have a list of keywords that you believe convert well - it's time to squeeze more from them. Analyze these words and try to find variations of this word, synonyms, and use them in the next campaign for your product.

4. Focus on the best keywords.

This is obvious, but it needs to be remembered. If your ACoS at a certain level satisfies you and you still have the option to raise the bid, do it. Test the campaign with different PPC rates for your keywords to find a balance between campaign costs and meeting business objectives.

The above post is, of course, an outline of what Sponsored Products campaigns on Amazon are. You need to spend considerable time learning this tool and test it on your own unique example before mastering it and achieving satisfactory results. Don't be afraid to experiment, but draw conclusions from those experiments, as this learning comes at a cost.

It is also worth mentioning that this tool is available for both sellers in the Seller and Vendor models.

If you are convinced by the idea of PPC but don't have the time to delve into it - let us know, we will take care of your campaign.

Do you have your experiences, remarks, or questions regarding PPC campaigns? Share them under this article. We support knowledge sharing within the Go2Market Community.

To battle and Happy Selling.

Go2Market Crew