Amazon PPC Management: How to Create the Best Sponsored Ads Strategy

Last updated on December 14th, 2022

Written by Ken Zhou

Are you afraid to dip your toe in the unfamiliar waters of Amazon PPC management? You know all too well that a kick-ass product listing is not enough to attract new customers. At some point, you will have to learn how to set up pay-per-click (PPC) ads on Amazon yourself. 

But is there such a thing as the best Amazon PPC strategy? Let's face it: not all products are created equal. What others think is the “best” for their products may not be the right strategy for yours.

In this article, we're going to discuss Amazon PPC, why Amazon sponsored ads management is essential, and how to set up PPC on Amazon.

Are Amazon sponsored ads worth it?

If you're brave enough to compete with over 2.5 million active Amazon sellers and 12 million product listings, be our guest. Amazon understands how even seasoned merchants have trouble dealing with the fierce competition in the platform. Thus, the international e-commerce giant offered a solution: PPC or sponsored ads. 

Once you understand how to manage an Amazon PPC effectively, you might be lucky to join the millions of small- and medium-sized enterprises that sell more than 4000 items per minute. Did you know that Amazon's average daily sales can reach a whopping $410 million? If we break it down, the platform can churn over $283,000 per minute or over $4,722 per second!

Now that we’ve explained the importance of Amazon sponsored ads, let's enumerate the three types of Amazon PPC.

What is Amazon PPC? 

Amazon PPC or sponsored ad is an advertising model in which sellers or advertisers pay Amazon a fee when customers click their ad. It has three types.

Amazon sponsored products

It promotes a particular product or Amazon Standard Identification Number (ASIN) and may appear within the product detail page or shopping results. When clicked, Amazon redirects the shopper to the product detail page. 

At a glance, it’s easy to mistake a sponsored product for an organic search result because they look very similar. The only difference is it has a “Sponsored” label on top of the product title.

Every sponsored product ad has organic-looking creative elements like product title, star rating, number of reviews, and price. You don't have to create this from scratch because Amazon auto-populates its content, which it gets from the ASIN's product detail page.

Amazon sponsored brands

Promoting a collection of products, this type of PPC ad appears on product detail pages and search results (at the top, side, and bottom). Each box contains an image or headline of the brand and up to three ASINs. It looks like this:

Amazon sponsored brands offer more customization than sponsored products. You can create your own headline and image and redirect it to a custom landing page. 

How to set up a PPC campaign on Amazon

One thing you should know about managing PPC on is it aims to lure shoppers who are in the consideration and purchase stages of the customer journey. It means sponsored ads focus on high-intent customers. All you need to do is create a winning Amazon PPC strategy for them to take the bait. 

1. Determine your campaign objective.

A good Amazon PPC strategy must have a solid and clear objective. If you don't have an objective in mind, it will create an impact on some of your decisions in the future, and your campaign metrics won’t be accurate. Here are the two campaign objectives Amazon sellers aim for.

Campaign efficiency

You can measure campaign efficiency by advertising cost of sales (ACoS) or return on advertising spend (RoAS). Divide your campaign spending by the total sales you made in its duration, and that is your ACoS. A low ACoS translates to a good campaign. It implies that your sales are high, and you only spent a small amount of money per click. 

Meanwhile, you can get your RoAS by dividing your campaign sales by your advertising cost. Target a higher RoAS if you want your PPC campaign to be successful.

Brand awareness

It is a campaign objective measured by the total number of impressions or how many times Amazon displays your ad to a customer. You should aim for higher results.

2. Choose which ASINs to promote.

You can't start managing a PPC campaign if you don't have existing ASINs or product listings to choose from. But how can you identify your best ASINs? 

Can you choose any ASIN without any basis? Nope. Amazon recommends considering the following:

Retail-ready ASINs

These are ASINs that passed the retail readiness checklist. What are the metrics Amazon uses to consider an ASIN retail-ready?

Best-selling products

It is the easiest ASIN to choose from. Pick ASINs that garnered high sales—as simple as that. By selecting best-selling products, you're also retaining your ASIN's relevancy, click-through rate, and sales.

3. Select an Amazon PPC type.

In this part, you can now choose between Amazon sponsored products PPC and sponsored brands. 

When you choose sponsored products as your Amazon PPC type, your campaign aims to drive brand awareness and sales. 

On the contrary, sponsored brands are used to introduce a new line of products or increase brand engagement.

4. Set a campaign budget.

Here's the “fun” part: setting the budget. Some advertisers and Amazon consultants agree that proposing a budget is challenging. You have to convince the board or the seller that your PPC strategy will work and it justifies your proposed budget. It may not work well for you if your budget is limited. 

You have two options to choose from.

Daily budget

In this type of budget, you will set an amount that you're willing to spend per day. At the month’s end, Amazon charges based on the number of days in the month times your average daily budget. The minimum amount is $1.

Lifetime budget

It is the maximum amount you're willing to spend on an entire campaign. You can set at least $100. If you assign an end date, your lifetime budget will be divided by the number of days in your campaign. For example, your lifetime budget is $100, and the duration is from June 1 to June 30 (30 days). The amount spent per day is $3.33.

5. Set a campaign duration.

After you decide how much your campaign budget is, you can either set its duration continuously or select an end date.

When you run a campaign continuously, you can still pause and resume it whenever you want. This duration is perfect for the best-selling products that you want to promote all year round until they gain a considerable number of impressions.

Alternatively, set a campaign end date if you're offering seasonal products or products with limited availability. Examples of seasonal products are those sold during holidays such as Halloween and Christmas. On the other hand, products offered in limited numbers are those you want to sell during summer, fall, or your company's anniversary.

6. Do keyword research.

In PPC management, you can't avoid dealing with Amazon SEO, specifically keyword optimization. The keywords you choose can mean the success or failure of your campaign. One of the best Amazon PPC strategies is thinking like your customers, not as advertisers or marketers. 

There are two categories of keywords, namely, brand and category.

Brand keywords

This category mentions your brand name. Your customers may use this keyword when they're looking for your products or brand. For example, your company, named “Audiogear,” sells headphones. If you want your products to reach shoppers who wish to buy from you, you may set “Audiogear headphones” as your brand keyword.

Category keywords

You can target customers with no specific brand in mind or are in general searching mode using category keywords. Based on our previous example, your mock company “Audiogear” may choose keywords such as “headphones with microphone,” “gaming headphones,” “wireless headphones,” or “headphones with Bluetooth.”

7. Set keyword bids.

The next step is bidding on your chosen keywords. At this point, you have to be budget-conscious, especially if you only have a limited budget. Whether you're planning a PPC strategy for Amazon sponsored products or sponsored brands, keep in mind that its inventory-buying model is an auction-based cost per click.

In this model, you will compete in the auction based on your ad's Amazon PPC strategy and relevance to the customers' search keywords. Only the seller with the highest bid under a specific keyword can have a sponsored ad real estate on Amazon.

You may opt for different bidding techniques to create the best PPC management strategy. It differs based on the sponsored ad type.

For sponsored brands, you can set it to automated bidding, in which Amazon automatically optimizes your campaign budget across all placements. Alternatively, if you're confident enough to bid on your own, then custom bid adjustment is for you. This bidding strategy allows you to decrease or increase your bid for other placements by up to 99%. 

For sponsored products, you can target by keyword, ASIN, or category. Amazon recommends using product and keyword targeting. Sponsored products have three Amazon PPC bidding features. 

1. Dynamic bids — down only

If you set this feature, Amazon will decrease your bid up to 100% when your ad is possibly less likely to convert a sale. 

2. Dynamic bids — up and down

This setting goes both ways. Amazon adjusts your bid in real time up to 100% if a conversion is likely and vice versa.

3. Fixed bids

Amazon will not apply any adjustments regardless of its rate of conversion.

Another bidding strategy for sponsored products is to adjust bids by placement. There are three different ad placement groups on Amazon.

1. Top of search placement appears at the top row of the first-page search results.

2. Rest of the search results, where ads appear on page 2 of the search results and in the middle or bottom of the page.

3. Product pages are ads appearing on the product details page and Add to Cart page.

In closing

To summarize, Amazon PPC management is a process that requires dedication, effort, and money. It includes a clear campaign objective, high-performing ASINs, sponsored ad type, budget, and duration. You should also be well-versed in bidding on keywords and ad placements. 

However, formulating the best strategy doesn't end here. It is a continuous process of trial and error until you achieve a cost-effective way of managing Amazon sponsored ads that meets your goals.

Do you want to know more about managing an Amazon PPC? Seller Interactive has a team of expert Amazon consultants willing to help you create a solid Amazon PPC strategy. For inquiries, email [email protected].