When launching a new product on Amazon you have the impression that in the host of products already out there your product will be in the last row, die before it goes into battle or get shrapnel (hijack, bad reviews, etc.) and bleed out there. Unfortunately, this is indeed a scenario you may encounter often, but you can’t give up in the run-up and you have to fight for your product’s rank and Sales Rank.
Remember that Amazon is the largest e-commerce platform in the world with millions of products for which whole companies and even armies of sellers, marketers, manufacturers, resellers, brand owners and importers fight for visibility. But rest assured, it is a fairly even fight, as the arsenal of tools available to all sellers is similar and the battlefield, the marketplace, has the same rules for all players. However, it is important to realise the principle that – “Rome wasn’t built in a day”. You need tactics, tools, but most of all patience and efficiency in your actions to get your product out in front of others. It won’t happen in a day, a week or even a month, but PPC will definitely allow you to successfully compete for your product and who knows, maybe even allow you to get an “Amazon’s choice” medal.
Below we will walk you through the process of launching your first PPC campaign on Amazon in 4 easy steps. But first, a few words about what PPC is and the nomenclature it entails.
What is Amazon PPC?
PPC means Pay Per Click. Campaigns in this model, also called “Sponsored Products”, are based on a simple solution in which you, as the advertiser, pay for each click on an advertisement which redirects to your product listing. This is an effective tool for promoting products, but if not managed effectively it can also be a money eater.
PPC campaign indicators.
Here is a brief summary of the most important terms you will come across when creating a PPC campaign.
Bid – is the rate you are able to pay for one click on your ad and redirection to your product
Daily Buget – is the amount you are willing to spend per day on your campaign – with a Bid of EUR 20 and a Bid of EUR 0.40 (in most categories this is the Default Bid) you can count on 50 visits to your listing.
Keywords – the keywords of your campaign on which you want your advertisement to appear.
ACoS or Advertising Cost of Sales. This is a percentage indicator showing how many sales you achieved vs. the costs you incurred for a given campaign. The formula for ACoS is ASoC = total PPC campaign spend / total sales generated by the PPC campaign x 100
Step 1: The product is the most important
Without a good product listing, your campaign simply won’t be effective, full stop. We have already written about how a listing should look like and it is worth going back to it. You can find the details here.
Additionally, you should remember that the information contained in the product data in Seller Central has an impact on PPC campaigns. From the data you include in the product name, bullet points and product description, Amazon’s algorithm will automatically select the keywords on which your product’s ads will be displayed.
Step 2: Decide which campaign you want to run.
There are generally two types of Amazon PPC campaigns. Automatic campaigns and manual campaigns. In the “Targeting” section, you can choose one of them. Below, we’ll give you a closer look at what their advantages and disadvantages are.
Amazon chooses for you the keywords on which the campaign will run. This choice is influenced by two elements. The first, this product information contained in the product listing and the second is the category searches and keywords of competing products.
The advantages of an automated PPC campaign:
+ Easy. It does not require any knowledge of keywords or targeting – Amazon chooses them for you.
+ Fast. This is the fastest option to launch a product campaign.
+ Budget under control. You have full control over your campaign budget.
The disadvantages of an automated PPC campaign are:
– Limited control over the issue of campaign targeting.
– Passive campaign. We have no influence on the campaign keywords chosen by Amazon.
– The detailed expenses of the campaign are not entirely clear.
The second option is a manual campaign. In this case, you decide for yourself which keyword to target and how much you will spend on the keywords. Of course, manual campaigns also have their pros and cons.
The pros of a manual campaign:
+ Full control over the campaign
+ Measurable benefits. You can see which keywords brought in what return on investment and exclude those words that do not convert to sales sufficiently.
+ Budget control. You can choose which words your campaign runs on, so you can allocate budget to less popular words with higher conversions instead of using it on popular phrases with low conversions. Based on this, you can find your sweet spot and keyword mix in relation to cost and the sales they generate.
Downsides of a manual campaign:
– Time consuming compared to an automated campaign
– Wrong choices will happen with these campaigns, especially in the beginning and your budget may be burned on low conversion keywords. This is the cost of the knowledge you will gain from such a campaign and which you will use on subsequent campaigns.
The best way to manage these two types of campaigns is to combine them. Initially, you run an automated campaign to gather information on keyword conversions, ACoS, you analyse the results and then run a manual campaign based on these results.
There are quite a few external tools on the market that support this process. Some analyse the results of the automatic campaign, on the basis of which they suggest which keywords to include in the manual campaign. More advanced tools also take into account the ranking of organic keywords and combine them with the results of the automatic campaign. Some of them even allow you to calculate net profit per product, taking into account the budget spent on campaigns, and estimate how much organic sales growth is related to PPC campaign results.
Step 3: Keyword selection.
Whether you choose a manual or automated campaign you will encounter three types of keywords:
Broad match words, known as broad match. Your product ad will appear for different variations and words related to your keyword. If someone provides a different variation of the word, twists the spelling your ad will still show up to the user. The advantage of this is that we have a broader reach for our campaign and can find words that coincide with our keyword that will convert well. However, it may happen that our campaign will target the wrong categories we care about.
Phrase Match – in this option, our keyword(s) may appear in search results for entire phrases, the so-called “long tail”. How can this look like in practice? Our keyword is “red mug” – an advertisement for our product will also appear in search results for phrases such as” red tea mug” or “ceramic red mug”
Exact Match. In this option, the ad will only be displayed in the search results for the exact phrase. This narrows the campaign reach, but increases the match and reduces our ACoS.
Keyword search is a topic for a separate post, but in general you can use several sources:
Amazon – start typing a given word into the Amazon search engine for a given marketplace and see what variations the search engine itself suggests to you. These are the most commonly searched phrases having to do with your keyword.
Competition. Check the TOP 100 of the category you will be listing in and see what phrases in names and bullet points appear most often
External tools for keyword sourcing:
1. general – such as Google Trends, Google Ads, Wordstream or Keyword tool
2. tools dedicated to Amazon such as Jungle Scout or Hellium10
Most of the categories have words that are the ‘workhorses’ of the category. These have high search volumes but are also very competitive and therefore expensive. The ideal situation is to find keywords that will convert well but will be relatively niche and therefore cheap. If we find more of these words we will find that their sum can give us a traffic volume close to that of the main keywords and our sales will move strongly forward, thus maintaining a good ACoS ratio. This phenomenon is referred to as “lifting all boats”.
Step 4: Invest, optimise, win.
PPC campaigns should be an integral part of selling on Amazon, not just in the initial product lifecycle. To fully experience the benefits of a PPC campaign, it should be ongoing and continually optimized to increase sales and decrease ACoS. Remember that as your sales increase with PPC, your Sales Velocity increases, potentially the number of product comments also increases, sales rank goes to number one and thus your organic sales will also increase.
Below we have put together some tips on what you should look out for when optimising your PPC campaign:
1. get rid of weak keywords.
If you discover a keyword that doesn’t convert well just consumes your campaign resources, place it as a Negative Keywords of the campaign. Automated campaigns in particular can have many of these words.
2. optimise your product listing.
If your PPC campaign keyword analysis shows that there are keywords in your campaign that are unproductive, you should check if such words are in your listing. If you find such a word in the name, description, bullet points of the offer or in the “Keywords” section of your listing remove it from there and try to replace it with another, more promising word.
3.Squeeze as much as possible out of your keywords.
Your campaign has been running for a while and you already have a list of keywords that you think are converting well – it’s time to squeeze more out of them. Analyse these words and try to find variations of this word, close words and use them in the next campaign of your product.
4 – Focus on the best keywords.
This is obvious, but it’s important to remember. If your ACoS at a given level satisfies you and you still have the opportunity to increase the rate, do it. Test the campaign at different PPC rates for your keywords to find a balance between the cost of the campaign and meeting your business goals.
The above post is obviously an outline of what Sponsored Products campaigns are on Amazon. You should take the time to learn this tool and test it on your own unique example before you master it and get satisfactory results. Don’t be afraid to experiment, but learn from those experiments, because this learning comes at a cost.
It is also worth noting that this tool is available to both Seller and Vendor sellers.
If you are convinced by the idea of PPC but don’t have time to delve into it – let us know, we will take care of your campaign.
Do you have any experiences, comments or questions about PPC campaigns? Share them below this article. We support knowledge sharing within the Go2Market Community.
To battle and Happy Selling.