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Step By Step Guide For Amazon PPC Strategy

Are you ready to launch your first PPC campaign on Amazon? Check out our short guide to learn the ropes before pushing your first ad campaign live.

Step By Step Guide For Amazon PPC Strategy
Julia Grant

November 16, 2022

With millions of products live on Amazon everyday, PPC is the way to ensure you stay at the top. If you're just getting started on Amazon, understanding the advertising side of things can be difficult. We're here to help!

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Amazon PPC Strategies: The Best Guide For Beginners

If you've scoured the internet for PPC strategies, you've likely found a combination of overwhelming and underwhelming resources. Our goal today is to get you started and give you just what you need to get your first successful PPC campaign off the ground.

The goal of any good marketing campaign is to reduce costs while maximizing the return on your investment. There are hundreds of competitors trying to edge you out of your advertising space - so you need the right strategies in place to get those clicks coming in.

GIF of a man in hippie gear saying, "click the link, man!"

Defining Our Terms: Understanding PPC and ACOS

PPC stands for Pay Per Click advertising. This kind of advertising is unique because the advertiser does not pay for marketing space - they only pay for the clicks that their ads receive.

Amazon's paid marketing runs on this model.

Here are a few key terms you'll want to understand before starting your PPC campaign.

  • PPC. Pay Per Click advertising. Ads that use this model cost a certain amount per click you receive.
  • ACoS. Advertising Cost of Sales. This is the amount that each sale costs based on your ad spend. Let's say you spend $15 on ads for a product and sell $50 worth of product from those ads. Your ACoS in this scenario is 30%. To find your ACoS, divide the ad spend by the sales value and convert to a percentage. 
  • Impressions. An impression is simply any time your ad has been displayed. With PPC advertising, you do not have to pay for impressions.
  • Clicks. A click is anytime your ad has been clicked on. Sometimes clicks are incorrectly logged, but will auto-correct within a couple days. With PPC, you pay for every click. The key? Make those clicks count.
  • Attributed Sales. Attributed sales are any sales derived from your advertisement. Typically, this is measured by considering any sales within a week of clicks on your sponsored posts. It's best to measure this weekly to ensure the most accurate data.
  • RoAS. Return on Ad Spend. This is the financial return that you receive from your advertising endeavors. you find this number by dividing all of your attributed sales by your total ad spend.
  • Bid. Since there are so many users looking for advertising space, PPC uses a bidding model. Users predetermine their budget with a bid of how much per click they are willing to spend for an ad space.
The key to effective PPC on Amazon is to maximize your RoAS and minimize your ACoS.

The 3 Kinds of Amazon PPC Ads

Amazon has three main varieties of PPC advertisements.

Sponsored Product Ads

These are the most popular ads on Amazon. The vast majority of Amazon sellers are using sponsored product ads!

These ads are found in search results and on other product listings. They are so popular because it's easy to confuse a sponsored product ad for an organic search result.

Sponsored product results within the search results.
Sponsored product results on a competitor listing.

You use keyword targeting to set up a sponsored product ad. You can do this manually or allow Amazon's algorithm to choose keywords for you. We'll unpack how to choose between these two methods in a bit - so keep reading.

Sponsored Brand Ads

These ads simultaneously display multiple products from your brand, like headline search ads, and are showcased at the top of the search results. You can choose to showcase your ad as a product collection, store spotlight, or video.

A sponsored brand ad.

All three forms are effective ways to show yourself as a desirable brand in the niche that a customer is shopping within. Only registered brands can use these ads!

Sponsored Display Ads

This is the newest form of PPC for Amazon. You must have your brand registered with Amazon to use this kind of ad. Sponsored display ads are similar to google ads, and can appear on or off of Amazon. You might see them on blogs, popular websites, or even on streaming sites. If you're just getting started with PPC, you may want to stick to the two previous options while you get started seeing as display ads are a bit newer to the Amazon advertising game.

A sponsored display ad on Google.

How To Use Sponsored Products Ads

Today we're going to focus on one primary form of advertising - the sponsored product ad. Why? Because for first-time Amazon PPC users, this is the best place to start. You don't have to be a registered brand yet and the results will help you scale your business.

Once you've mastered the basic sponsored product ad, you can implement other forms of advertising into your marketing strategy. But for now? Stick with what's simple.

Maleficent saying "Easy Peasy."

The two main varieties of sponsored products are automatic and manual targeting.

Automatic Targeting For Your Sponsored Product Ad

This is the easiest way to set up a campaign. In auto-campaign targeting, you rely on Amazon's algorithm to decide which search terms or products are relevant to your listing.

You might assume manual is always better - but Amazon's algorithms are pretty amazing. They also adjust over time to account for who is actually clicking on your ads and buying your products to make their targeting more effective.

You do have some options within automatic targeting. You get to choose between these four varieties of keyword matching:

  • Close match. Close match ads are shown to shoppers using terms very similar to your product.
  • Loose match. Loose match ads are shown to shoppers using search terms that are somewhat related to your product.
  • Substitutes. These ads target shoppers looking for a competitor product. Perhaps they are looking for a specific brand or model of an item, and you are selling something similar under a different name. You might then use substitutes for your keyword match.
  • Complements. These ads target shoppers who are looking for items or viewing items that pair well with your own.

Automatic targeting is easier for you - but does remove some control and optimization from your hands. For brand new sellers, automatic targeting is a great option! Amazon wins when we sell - so they have a vested interest in keeping their algorithms effective.

Manual Targeting For Your Sponsored Product Ad

Manual targeting requires a thorough understanding of keyword research and SEO. With this Amazon PPC strategy, you are responsible for choosing each keyword that you bid on. Using manual targeting can be more effective, because you can pick and choose relevant keywords and therefore minimize irrelevant ad expenditure. However, if you don't have the experience to inform your keyword decisions, you may end up with ineffective ads.

Setting Up Your First Automatic-Targeting Amazon PPC Campaign                   

Setting up your first Amazon PPC ad campaign is easy. In order to do so, you must already have a Seller Central account and a product listing to advertise.

  1. Login to Seller Central.
Log in to Seller Central.

  1. Click the "Advertising" panel and choose "Campaign Manager" in the dropdown.
Choose the advertising panel and click the campaign manager dropdown.

  1. Select "Sponsored Products."
Select "sponsored products."

  1. Enter in the campaign information (name, date, daily budget, and automatic targeting).
Enter your campaign information.

  1. Choose a bid strategy. Dynamic bids allow Amazon to change your bid for you ad campaigns as they think will be most effective. Down only means Amazon may reduce your bid amount if they don't think you'll make a sale, up and down means they may adjust it up or down depending on how likely they think you are to make a sale. Fixed bids stay at your set level!
Choose your bid strategy.

  1. Create your ad group. Amazon gives you the option of adding multiple products per campaign grouping. To start, just select one product per group. Name the campaign based on how it's organized and which variation of your product is included.
Create an ad group.

  1. Enter your bids. You'll have the choice between default bids and bids by targeting groups. Default bidding is simple - just put a number between $.75 and $2.00 in the bid field and Amazon will use that for all targeting groups. 

Use a higher number when you're just starting out to get yourself on the map. You can use the targeting groups (close match, loose match, substitutes, and complements) to set a specific bid quantity for each one of these groups. Amazon will give you a suggested bid - this can be useful! We suggest using the targeted match strategy.

Enter your bids.

  1. Select negative keywords. This is helpful for sellers who could easily foresee their product showing up in the wrong search results due to a similar spelling, name, or category. You want to maximize the effectiveness of each impression - so if you're worried about misplaced ads, use negative keywords to avoid that.
Select negative keywords.

  1. Push it live! Once you've reviewed all the campaign details, you will click "launch campaign" to make your campaign live. Wait at least half an hour to see if your ad is running well.
Launch your campaign.

What Now?

For brand new sellers looking to get started with PPC, this is the best way to enter the game. Use a sponsored product ad and rely on Amazon's auto-targeting option to minimize your risk and maximize your performance.

Once your Amazon PPC campaigns have been up and running for at least a week or two, you can begin analyzing your results, optimizing the campaign, and playing with new campaign ideas. But don't worry about all those details just yet. Take the first step today - get that first campaign off the ground! We'll be here with more tips and tricks when you're ready for the next big step.

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Step By Step Guide For Amazon PPC Strategy

Julia Grant

Julia Grant is a copywriter specializing in e-commerce and small business, helping businesses expand their reach with copy that clearly communicates their message and converts. She is a certified translator and interpreter and prides herself on providing culturally relevant content in both English and Spanish.

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