One of the most exciting parts of being an Amazon seller is launching a product. It means that you’ve done it! You did the research, sourced a product, and now you’re ready to introduce it to the world.
Whenever I reach this point, I always ask myself, “Is this product going to succeed?”
Fortunately though, it’s easy to launch a product successfully when you use the right launch strategy. So, if you’ve been following the Jungle Scout blog, you probably already know about promotional launches using our tools and software.
But, today I want to go over another important element of an effective Amazon launch strategy: Amazon Pay-Per-Click (PPC).
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Amazon PPC: Table of Contents
- What is Amazon PPC?
- How much does Amazon PPC cost?
- When should I start using Amazon PPC?
- What is a good strategy for Amazon PPC?
- How can I track my Amazon PPC costs?
- How do I start an Amazon PPC campaign?
- Which Amazon PPC campaigns should I start with?
- How do I optimize Amazon PPC campaigns?
- How do I do keyword research for Amazon PPC?
- What other types of Amazon PPC campaigns are there?
What is Amazon PPC?
PPC, or pay-per-click, is a form of advertising where you pay a predetermined amount each time a consumer clicks on one of your ads. Many search engines utilize pay-per-click advertising methods because of its efficiency and effectiveness.
As an Amazon seller, you can create Amazon PPC campaigns for your products by targeting specific keywords. And if you have a brand-registered product, you’ll have even more options available when it comes to advertising on Amazon.
How much does Amazon PPC cost?
Amazon PPC means you pay a fee each time a shopper clicks on your ad. How much you’re charged for each click depends on a multitude of factors:
- First, you get to set your own maximum bid per keyword (or all keywords, if running an automatic campaign).
- Second, what you’re charged also depends on what your competitors’ bids.
- Third, you can set a daily budget for your bids; once you max out your daily budget, Amazon will no longer display your ad.
Now keep in mind, you are charged regardless of whether or not the shopper makes a purchase. If the ad is clicked, you will get charged. Therefore, it’s up to you to optimize your listing to ensure those clicks convert into sales.
What is a conversion rate?
A conversion rate is a digital marketing metric that takes the number of people who’ve purchased your product and divides it by the number of people who’ve visited your page (in marketing terms, these are called “impressions”).
For example, if 10 people visit your listing, but only one buys your product, then your conversion rate is 10%.
In other words, the higher your conversion rate, the better!
When should I start using Amazon PPC?
Most Amazon experts will tell you that it’s best to start Amazon PPC campaigns immediately, as soon as your listing is active. That’s because Amazon PPC not only helps get your product in front of more shoppers, it also tells Amazon’s search engine algorithm that your product is worthy of notice. It lets Amazon know your ASIN is relevant.
However, there is a fine balance when using Amazon PPC. The last thing you want to do is throw money at your ads carelessly. And you definitely don’t want to play it too safe either.
So, we suggest starting with an automatic campaign and a daily budget of $25 per day, with individual bids maxing out around $1.50. Then, after a week or so of doing this, you can scale your daily budget and bids up or down as needed.
What is a good strategy for Amazon PPC?
The best strategy for Amazon PPC is to do the following:
- Start slowly with a limited daily budget and reasonable pay-per-click bids for each ad campaign (between $1 – $2).
- Create both automatic and manual campaigns alongside product launch promotions.
- Run weekly reports and highlight high converting keywords.
- ABR (always be researching); continue to search for new and better long tail keywords.
- Remove keywords that aren’t converting and promote keywords that are.
- Keep your Amazon ACoS (advertising cost of sale) at 25% or lower.
- Use Amazon-specific accounting software to track your actual advertising costs.
What is Amazon ACoS?
Amazon ACoS stands for ‘advertising cost of sale’ (or ‘actual cost of sale’), and is calculated by taking the actual ad spend for a single product’s advertising campaign and dividing it by the total sales of that product derived from the ad campaign:
(Ad spend ÷ sales) x 100 = ACoS
Unlike conversions rate, the lower your ACoS, the better. For example, if you spend $40 in ads and earn $200 in sales from those ads, then your ACoS will be 20% (40 ÷ 200 = 0.2 x 100 = 20%).
How can I track my Amazon PPC costs?
Once upon a time, Amazon made it a whole lot easier to track your day-to-day ad costs in the reports section of Seller Central. Unfortunately, they’ve since changed the way reports work, making it difficult to determine advertising costs…until the moment Amazon hits you with a $500 charge for ads, that is.
That’s why the easiest way to track Amazon PPC costs is to use Amazon-specific accounting software. And for my money, the best software out there is Fetcher. It actually integrates with your Amazon Seller Central account, pulls all of your relevant data, and sorts it into a series of attractive bar, pie, and line charts.
Instead of using a calculator and/or a spreadsheet to estimate your Amazon PPC costs, Fetcher does all the work for you. All you have to do is log in and check your dashboard!
How do I start an Amazon PPC campaign?
The process for creating a sponsored product Amazon PPC campaign is fairly simple. Here are the basics:
- Login to Amazon Seller Central.
- Click on the Advertising menu option, then on Campaign Manager.
- Next, click the big, orange ‘Create Campaign’ button.
- Supply the campaign settings page with the following information, then click ‘Continue to next step’:
- Campaign name: what do you want to call your campaign?
- Daily budget: what is the most you’re willing to spend per day on ads?
- Start/End dates: when will your campaign start, and when (if ever) will it end?
- Targeting type: there are two types of Amazon PPC targeting options:
- Manual targeting: these are keywords you target specifically.
- Automatic targeting: these are keywords Amazon optimizes and targets on your behalf.
- Name your ad group; within your campaign, you can name your ad group, too.
- Choose the products you wish to advertise; we recommend one per campaign.
- Enter your default bid; what is the most you’re willing to bid per click (it will likely be between $1 – $2 for most products)?
- For manual targeting, enter your keywords; there are two ways to do this:
- Suggested keywords: these are keywords Amazon thinks are appropriate for your product.
- Provide your own keywords: these are keywords that you’ve researched yourself.
- Click “Save and finish.”
Which Amazon PPC campaigns should I start with?
We recommend the following for product launches, combining both Amazon PPC ads and product launch promotion campaigns:
- Create a product launch promotion. The easiest way to do this is by creating a promotion in Amazon Seller Central. Then, when that’s done, advertising your promotion on an Amazon deal site. This will help Amazon know that your product is relevant. Additionally, it can help you get early reviews, boosting your product’s rank.
- Run an automatic Amazon PPC campaign. During your promotional campaign, launch an automatic Amazon PPC campaign as well. This early campaign will allow Amazon to help you identify high-converting keywords. I recommend starting with keyword bids around $1.50-$2.00, and you’ll want to run this type of Amazon PPC campaign for at least a week.
- Use the data from keyword research to create your first manual campaign. Add any keywords you discovered through running Amazon keyword reports (see below) to your manual campaign, plus any you found using sites like keyword.io. Then, start bidding on those keywords!
Once you’ve got the hang of the basic Amazon pay-per-click campaign types, and you’ve got a brand-registered product, you might want to try some of the other intermediate-level Amazon ad campaigns, like headline search ads and display ads (see below).
How do I optimize my Amazon PPC campaigns?
The best way to optimize Amazon PPC campaigns is by running regular reports, performing excellent keyword research, and making small adjustments (based on the data in your reports and your keyword research) to the campaign each week.
This isn’t something you want to rush, though…but you don’t want to set it and forget it either!
Sometimes it can take up to 60 days to fully optimize your Amazon PPC campaigns, and even then, you’ll want to continue to update and tweak those campaigns for as long as your product is available on Amazon. You should always be optimizing!
How do I do keyword research for my Amazon PPC campaigns?
There are two simple ways to conduct Amazon keyword research:
Method #1 – Create an advertising report through Amazon Seller Central.
This is probably the most effective way to find keywords for your manually targeted Amazon pay-per-click campaigns: by finding out which words are actually landing you sales.
Here’s how do this:
- Login to Amazon Seller Central.
- Click on the Reports menu option, then on Advertising Reports.
- Next, select the following information:
- Enter Keyword as the report type.
- The Report Name can be whatever you want it to be.
- Your Report Period should be the longest period possible; later, you might try running keyword reports with shorter periods.
- Data unit should be Total.
- Click the ‘Create Report’ button.
- Download the CSV report. It may take a moment for Amazon to create it.
- Open the CSV in Excel.
- Organize the keyword data by ‘Conversion rates within one week’.
- Highlight or copy all of the keywords with high conversion rates. I recommend 10% or higher for most products. If your product has a higher sales price ($40 or more), then you might go for a lower conversion rate milestone.
- Paste those keywords into a notepad document or directly into your manual campaign.
Method #2 – Use keyword research tools to find long tail keywords.
Next, in addition to the high converting keywords you’ve discovered with your Amazon keywords report, you can also find more long tail keyword opportunities using tools on the web.
Some of my favorite keyword research tools include:
- Keyword Scout: the most state-of-the-art Amazon keyword research tool ever created.
- KWFinder: optimized for bloggers more than anything, but can still be useful for Amazon sellers.
- Keyword.io: has a specific option for Amazon.
- Sellerwords: another cool tool specifically for Amazon sellers; it uses reverse ASIN lookup tech.
- Google Keyword Planner: the tool a lot of sellers swear by; Google’s own keyword planner can help you come up with some awesome long tail keywords.
What is a long tail keyword?
The phrase ‘long tail keyword’ refers to keywords that are more specific or niche than their ‘short neck’ counterparts.
Usually a long tail keyword phrase will contain three or more words, versus the one or two you find in short neck keywords. Therefore, long tail tends to have fewer searches, but also fewer competitors, and thus lower costs.
Additionally, long tail keywords tend to have higher buyer intent, which means higher conversion rates.
For example, if you were going to sell a funny hat that looked like a cheeseburger and you bid on short neck words like “hat” or “funny hat” you could pay as much as $3-$5 per click. However, if you bid on long tail keywords like “hat shaped like cheeseburger” or “big cheeseburger hat”, the cost would be less.
What other types of Amazon PPC campaigns are there?
In addition to the manual and automatic Amazon PPC campaigns described above, you also have options with Amazon Marketing Services (AMS). These campaign options include Headline Search and Product Display ads.
What are Amazon Headline Search Ads?
A headline search ad is an Amazon PPC campaign that automatically takes three branded products and places them into a banner on the search page. Typically, the banner will be above all other search results (including other sponsored ads) and includes the brands, ratings, prices, and even a custom tag line that you can create.
Here is an example of a Headline Search ad:
Headline search ads are only available to sellers who have at least three products under an Amazon-registered brand. You can create headline search ads on Seller Central under the Advertising Campaigns menu selection, or through the AMS subdomain.
What are Amazon Product Display Ads?
A product display ad is an Amazon PPC campaign that inserts advertisements directly into other product pages. It’s an effective way to advertise your item on a competitor’s product page. Typically, the ad appears just below the Buy Box.
Here is an example of a Display ad:
Much like headline search ads, display ads are an Amazon PPC campaign that you can access only if your product is a registered brand with Amazon. You can only create display ads on the AMS subdomain (https://ams.amazon.com).
So, that’s it for Amazon PPC basics. Of course not every campaign is the same. Depending on your own costs and product needs, you may encounter new and different challenges of your own. But regardless, be sure to follow the fundamentals of PPC.
First, always make sure you’re doing plenty of research (ABR!). Then, run regular reports to see how your ads are doing. And finally, keep using product promotions and new types of advertising campaigns to continue to boost your sales and rankings.
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Hey Greg, thank you for the details. It was very useful.
You mentioned conversation rate is “the number of people who’ve purchased your product and divides it by the number of people who’ve actually visited your page (in marketing, these are called “impressions”)”. Shouldn’t this be clicks rather than “impressions”? Since clicks is the one that qualify as people who visited your product page?
Would you recommend launching with both automatic and manual ads?
If so, what are the budgets you’d recommend for both types?
Yes it is recommended to use both automatic and manual ads.
Your budget should start at $1.00 – $2.00 for at least seven days and if after a couple day you haven’t seen any clicks you can raise it by a quarter at a time.