PPC for Ecommerce: What Your Ecommerce Business Needs

Last updated on August 4th, 2023

Written by Mohamed Aden

There are several strategies for selling on Amazon, and one of them is PPC for ecommerce. Yes, one of the world's largest ecommerce websites has an ad platform that allows sellers to build brand awareness and generate more sales.

You've probably hopped onto this article to either understand:

• What Amazon PPC is
• Why it's important for your ecommerce business
• To find out the best strategy for marketing on Amazon

Let Seller Interactive touch on the points mentioned above. Keep reading to discover how you can increase sales through PPC advertising.

What Is Amazon PPC?

First off, PPC stands for pay-per-click. Hence, Amazon PPC is an advertising strategy done through Amazon's own ad platform called Amazon Advertising. In this model, sellers like yourself will pay Amazon only when a customer clicks on your ad. So, if users see the ad without clicking, you won't get charged.

These ads show up on Amazon's online platform. This proven advertising method brings your ads in front of potential customers, increasing your chances for them to purchase your product. Learn the many terms associated with Amazon advertising to familiarize yourself with the process.

How to Set up Ads on Amazon 

Most Amazon vendors use three ad format options:

• Sponsored Products: For promoting specific products. These ads appear in the regular search results on Amazon and tell users they are 'sponsored' within the ad. You can target these ads by keyword or product category. This option has the most sales-per-click because they blend in beside other products in the search results.
  
• Sponsored Brands: For promoting your brand and showcasing up to three products. These ads are seen above the regular search results.
   
• Sponsored Display: For displaying ads to customers having interest in a specific product or category. These look similar to other display ads you might have seen online. Unlike the above two options (which are paid on a cost-per-click basis), Sponsored Display Ads are paid on a cost-per-thousand impression basis, (i.e., you pay for every 1000 people that see your ad.)

Here’s a brief step-by-step guide on how to set up your paid ads on Amazon:

1. In your Amazon Seller Central, go to the “Advertising” tab and click on the “Campaign Manager” from the drop down.
2. Click the “Create Campaign” button on the lower left side of the graph.
3. Select the ad format of your choice. In this example, we’re going to click the “Continue” button on the “Sponsored Products” section.
4. Enter your campaign name in the bar. Your campaign name should preferably follow a naming convention if you have many SKUs. This is something you’ll want to think about so it’s easier for you to organize and manage your ads. You also have to set up the following:
   1. Start: The date your campaign will start running.
   2. End: The date your campaign will stop running.
   3. Daily Budget: How much you are willing to spend for this campaign in a day. 
5. Below the bars, you’ll find “Targeting” options. Select the option that you find suits your advertising needs.
   
   1. Automatic Targeting: Amazon will select keywords that are similar to your product and the ad will trigger once a shopper enters the keywords Amazon chose.
   2. Manual Targeting: You select the keywords that will trigger the ad and select how much you want to bid for your ad to show up on the results page.
6. Next, you have to select a campaign bidding strategy. Here are options in a nutshell.
   
   1. Dynamic Bids (Down Only): Automatically decreases the bid amount if the product is less likely to turn into a sale. This helps you save money.
   2. Dynamic Bids (Up and Down): The bids will automatically increase or decrease depending on the chances your product will convert into a sale.
   3. Fixed Bids: Whatever bid you set will stay the same no matter the possibility of a sale.
7. Next, you have to create an ad group under the campaign to further organize your ads. Type in your chosen name under the “Ad Group Name” bar. 
8. Under the “Products” section, select the product you want to advertise under this ad group.
9. Under the “Automatic Targeting” section, enter your preferred base bid amount under the “Set Default Bid” option. Alternatively you can further specify your default bids by matches if you choose the “Set Bids by Targeting Group” option.
10. As an option, you can also set up a negative keyword list for your campaign. These keywords prevent your ads from being triggered by irrelevant keywords.
11. At the bottom right part of the page you can either click “Save as Draft” if you’re not done setting it up and want to get back to it at a later time, or you can click “Launch Campaign” to get the paid ads rolling on your preferred start date.

How Much Does It Cost to Set up an Ad?

While the cost of the ad depends on many factors, sellers can expect to pay between 2 cents to $3 per ad click. The cost depends on the type of product, competition for your keyword choice, product category, and so on.

Why Is Advertising on Amazon Important?

With increasing competition and a crowded market, Amazon's customers are bombarded with several options when searching for a product. Hence, businesses need to allocate resources for advertising on Amazon to make sure customers see their products first.

As most consumers searching for products on Amazon stick to the first page and buy products from the first few rows, it's an intelligent strategy to invest in Amazon Advertising to drive sales.

Increases Visibility and Reach

PPC advertising enables ecommerce businesses to expand their reach and increase visibility among potential customers. By appearing at the top of relevant search results, businesses can attract more attention and drive organic traffic to their product listings.

In terms of reach, PPC advertising allows a business to control the type of audience they want to reach. As such, they can choose to expand their demographic by selecting a broad criteria so more people can view the brand or product they advertise.

Drives Targeted Traffic to Product Listings

With PPC advertising, businesses can target specific keywords and phrases that align with their products. This allows them to attract highly relevant traffic, increasing the likelihood of conversions and sales.

A huge chunk of basic PPC strategies relies on targeting specific keywords. Selecting the right keywords to bid on can give business access to the untapped niche of consumer groups ready to shell out money for their products. In the same vein, choosing a saturated or irrelevant keyword may lead to wasted resources.

Boosts Sales and Revenue

Effective PPC campaigns can significantly impact a business's sales and revenue. By strategically bidding on keywords, optimizing product listings, and creating compelling ad copy, ecommerce businesses can generate increased conversions and revenue.

With thousands of products on Amazon vying for the shopper's attention, an effective PPC campaign is essential. While product optimization compels shoppers to purchase your products, a lack of exposure may limit its potential, resulting in little to no sales. Having a good PPC strategy in place puts your product in the arena.

To Compete With Established Brands

For new or smaller ecommerce businesses, competing with established brands can take time and effort. PPC advertising on Amazon provides an opportunity to level the playing field. By investing in targeted campaigns, smaller businesses can compete directly with larger competitors and gain market share.

Small ecommerce businesses that are either clever or have the resources can go toe-to-toe with established brands and come back with huge takings. But in most cases, competing with giants means constantly capitalizing on blind spots; businesses do this with an unrelenting search for the most suitable keywords and dominating them until they grow as big as their rivals.

The 7 Recommended Amazon PPC Strategies

In today's highly competitive ecommerce landscape, businesses need to leverage the power of online advertising to reach their target audience effectively. And among the range of options to make your brand and products known, pay-per-click (PPC) advertising is the most dominant and widely used by ecommerce businesses.

PPC for ecommerce offers a valuable opportunity to display targeted ads to potential customers and generate qualified leads. By employing the right strategies, ecommerce business owners can optimize their PPC campaigns to increase visibility, attract quality traffic, and boost conversions. Here are some things you can implement for your Amazon PPC strategy.

Choose an Ad Format

First, decide on which of the three advertising options you would like to choose from to advertise your products or brand. Use A/B testing methods to figure out which ad drives more sales, or let a team of experienced account managers find the ad that works best for your business.

Pick the Products You Want to Advertise

You most likely will have products in your business that you want to advertise more than others. You will be able to see which of your products have higher sales, ranking, and productivity on Amazon. Regardless of the type of ad, select a few products from your portfolio depending on the above factors, and visualize how they would fit in, say, a Sponsored Brand ad.

Do Keyword Research

The next step involves selecting keywords for your ads that will get you higher click-through rates. Now there are two ways that you can do this:

1. One is through a manual campaign where you yourself will have to research keywords that fit your ad. We recommend using tools such as Sonar or Keywords Everywhere.
2. The other is selecting an automatic campaign where Amazon does the work of compiling keywords based on your product and targets the ad to the right consumers automatically.

For vendors and sellers new to this, it is recommended that you start with automatic campaigns, and once you get more experience in navigating the platform, move on to the more advanced manual campaign option.

Optimize Your Amazon Product Listing

Whichever campaign type you end up picking, it is vital to optimize your product listings. This is from a search engine optimization (SEO) standpoint. By investing in SEO, you will have better chances of ranking higher in Amazon's organic searches. Optimize your title, product description, product images, content copy, and more using SEO tools, or simply speed up this process by taking an expert's opinion.

Configure Your Bids

When you start to create your campaigns and have uploaded your keywords (for the manual targeting option), the next step you will face is to bid on the keywords. You will be shown your list of keywords along with the cost for each keyword (CPC). Here, you will determine how much to invest in a particular keyword when compared to another. 

Once you've submitted your ads, it will take a few hours for Amazon to review the ads. It will then launch your campaign when no errors are visible. It is recommended to check and monitor the performance of your keywords daily. Amazon will suggest which ones are more effective, and it would be wise to bid more on those keywords to generate better leads.

Set Up Your Negative Keywords

In the wild world of ecommerce, setting up negative keywords for your PPC campaigns is like putting on a bulletproof vest before stepping into a gunfight. It's a smart ecommerce PPC management move that can save your business from wasting precious time and money on irrelevant clicks and uninterested customers.

Negative keywords act as your first line of defense, filtering out the noise and fine-tuning your campaign's targeting towards the right audience. By specifying the words and phrases you don't want to be associated with your ads, you're able to steer clear of unprofitable keywords that attract the wrong crowd. It's like saying, "Hey, I don't want to sell running shoes to people looking for clown shoes."

By carefully selecting negative keywords, you're able to refine your campaign's focus and ensure that every click counts toward reaching the right customers who are more likely to convert into sales.

Use Other Ecommerce PPC Advertising Mediums

Other commerce PPC ads allow you to reach a wider set of audience and target them with surgical precision. Google Shopping ads, for instance, display your products directly in the Google search results, enticing potential customers who are out of the Amazon platform to click and make a purchase.

Furthermore, ecommerce PPC campaign platforms like Google Shopping Ads or Facebook Ads provide invaluable insights and data about your audience and campaign performance. All you need is a Facebook or Google Ads account (Merchant Center), and you'll gain access to detailed analytics such as click-through rates, conversion rates, and return on ad spend.

Armed with data, you can continually optimize your ads, making them more relevant, compelling, and profitable. You can even gain insights into what type of shoppers you attract on each platform, so you can plan out your ecommerce PPC campaigns in a way that optimizes your sales funnel.

This constant feedback loop allows you to fine-tune your PPC strategies, delivering better results over time. So, don't shy away from ecommerce PPC ads; they're not just a luxury but a necessity in today's competitive online landscape. Embrace them, harness their power, and watch your business soar to new heights.

PPC for Ecommerce Is More Important Than Ever

Seeing that most consumers are now more receptive to ecommerce businesses post-pandemic, it is all the more critical for businesses to make the most out of Amazon's PPC. With the average user having increased screen time, now is also the right time to take advantage of Amazon PPC optimization to drive sales. 

Here's a useful resource about understanding PPC ads from Amazon itself that will come in handy.

To close, what makes a successful paid advertising campaign is to put yourself in the shoes of the customer. Try considering what you would want to see in an ad when you are searching for it online, and then work on creating your ads. 

Best of luck on your campaign! Do you need support for your Amazon PPC optimization? Talk to an Amazon seller account specialist and schedule a call with an expert today!