Almost 60 percent of shoppers start their journey on Amazon. What’s more, most of these people have arrived on Amazon’s website primed and ready to buy.
This is a sharp contrast to people who launch a search engine when they open up their web browser. Those people are more likely to be in an earlier stage of the buying cycle. The people who land on Amazon are at the bottom of the funnel.
Whether you’re just setting out or looking for some tips, our guide has what you’re looking for.
The Basics of Amazon PPC
Before we get into the advanced techniques, a quick refresher is in order. Amazon runs a pay-per-click ad program, like Google Ads and Facebook Ads.
You’ll bid on particular keywords or product categories. If you submit the winning bid, your ad will appear when someone searches for that term or phrase on Amazon. You’ll pay the bid amount for each click you get.
The Benefits of Advertising on Amazon
If you want to sell your product, then ads are one way to get them in front of your audience.
Amazon’s program has two main places for sponsored ads. The first is at the top of the search results page, which uses keyword targeting for placement.
The second is in the related sponsored products carousel on the product details page. This makes use of product targeting, rather than keywords.
Amazon PPC campaigns have better conversion rates than other PPC platforms. They also tend to be less competitive, which means you may not need to spend as much money on a bid. In turn, you can earn more when someone buys.
Another advantage is that Amazon’s program allows for more than one product to “win” the bid. If you place the third-highest bid, your product ad could appear in a few places. It might be in the third slot, the middle of the page, or at the top of the second page.
Focus on Your Product First
Now let’s take a look at how you can make your Amazon ads more effective. The first thing you should always do is put the emphasis on your product.
A great product description and high-quality images will help you sell more. A competitive price also helps. If customers like what they see when they click on your ad, your conversion rate will be higher.
This will also help you get good reviews for the product. Reviews are key to selling, even when you’re using ads. You may even wait until you have a few good reviews before you launch an ad campaign.
Define Your Keywords
When it comes to keywords, don’t be afraid to think outside of the box a little. You should bid on exact keywords and phrases, as well as broad ones. In this case, a broad phrase might include “how to treat a pet” and “treats for pets.”
Amazon will only serve your ad if the user types exactly the phrase or keyword you’ve bid on. If you bid on “pet treats” and someone types “are treats good for pets,” they won’t see your ad. This is because the search query doesn’t contain the keyword you bid on.
Make sure you negate phrase match keywords, because they’ll also trigger exact matches. This could result in you paying twice over for the same search.
It also shows why broad matches are important. Whereas exact phrases and keywords are only triggered by the exact same input, broad matches for “pets” and “treats” will get your ad in front of a user searching for “are treats good for pets.” This is because the search contains both the words “pets” and “treats.”
Improve Quality for Ads
Another way you can keep your Amazon PPC spending in line is by looking to the quality of your ads. High-quality ads improve the customer experience. The listing title, the average star rating, image, and price affect the perceived quality of your ad.
Amazon also measures click-through rate, or CTR. This records the number of clicks an ad gets, versus the number of impressions. The higher the CTR, the more likely it is that your ad is relevant.
The more relevant your ad is, the more impressions it will get. This drives down the cost per click.
You can improve your ad quality by making sure you have a click-worthy main image and a clean title. A good price point and a few starred reviews also help your cause. Targeting the right keywords also mean your Amazon ads matter to the customer, which drives clicks.
Set a Budget and Calculate Default Bids
How much should you spend on Amazon sponsored product ads? Determining a budget for any PPC campaign is challenging.
To decide how much to spend, you’ll need to know three metrics:
- Your product price
- Your conversion rate
- The break-even advertising cost of sale (ACoS) for your product
You probably know the first two. The break-even ACoS is the unknown factor, and we need some more info to calculate it. If you’re running multiple products, you’ll need to calculate this magic number for each individual product.
First, you’ll need to calculate net profitability by finding your net profit margin per unit sold. To do this, you’ll:
- Subtract the cost per unit from the manufacturer from the unit selling price
- Subtract the cost of shipping per unit
- Subtract the Fulfillment by Amazon (FBA) fees per unit sold
If you aren’t sure what your FBA fees are, you can use Amazon’s handy calculator.
Amazon Ads Are Constantly Changing
It’s important to keep on top of changes to Amazon’s ad program. In late 2018, for example, Amazon launched some new features. They include product attributes targeting (PAT) and enhanced auto targeting (EAT).
Using these features, you can target your ads by ASINs, by brands within a category, and by subcategory. You can also filter the subcategory and brand by rating and price point. PAT also has negative targeting, capabilities.
These new features function like keywords and phrases, but make it even easier to make sure your ads are reaching the right people.
Put Your Amazon Ads on Autopilot
There are many things you can do to make your Amazon PPC campaigns more successful. Another step you can take is campaign automation with powerful tools and software.
If you want to take the guesswork out of creating great Amazon ads, give our tools a try. With them, you can build campaigns that convert every time.
Also published on Medium.