How to Set Up PPC on Amazon Without Overspending

February 23, 2021
Written by Jenna
how to set up PPC on Amazon

You've noticed no one is buying your products. No clicks. No impressions. No sales. So, you did what every sane Amazon seller would have done. You've decided to create Amazon sponsored products to increase clicks and sales. Since you know which products aren't making you money, all you should do is go to the Campaign Manager and start bidding, right? Uhm, not really. Let us help you with how to set up PPC on Amazon without overspending.

What is an Amazon sponsored product PPC ad?

First, PPC stands for "pay-per-click." It is an online promotion method in which you pay every time a customer clicks on your ad. Amazon offers three types of PPC ads and one of which is the sponsored products.

Amazon sponsored product PPC ad's goal is to promote a single product. It appears on the top, middle, and bottom of search results and product pages. Clicking on the add will direct the customer to your product listing.

What makes it the best Amazon PPC strategy? Sponsored products look like organic results. Here's a sample:

Source: Screengrab from Amazon.com

How do you make it the best Amazon PPC strategy?

This is the tough part, to be honest. Remember that you need to spend money on bidding. In the bidding or auction process, the Amazon sponsored product PPC ad with the highest bid wins, and you will pay an amount which is a little higher than the second-highest bid. This is called the second-price auction.

However, don't be misguided that Amazon only favors the highest bidders. Amazon also checks if your PPC ad is relevant or not based on your keywords. It will only show ads relevant and useful to its customers. Amazon is big on "relevance" and values their customers immensely.

In short, you need to balance between your bidding price and the relevance of your keywords. Besides these two, it is also essential to monitor the performance of your PPC ads by checking the ACoS.

What is ACoS?

ACoS or "advertising cost of sales" is the key metric to determine if your sponsored product ad performs well. The lower the ACoS, the better. Hence, it is crucial to know the best way on how to set up PPC on Amazon.

You can calculate the ACoS using this formula:

ACoS = 100 x (Total Ad Spend / Total Sales)

If the ACoS goes through the roof, it means your overspending, and you're not earning profit from your Amazon sponsored products PPC ad.

How to build a PPC campaign on Amazon

In Amazon, you can create two types of campaigns for sponsored products:

Automatic Targeting – Amazon shows ads to all relevant search queries using the data on your listing.

Manual Targeting – you will set the keywords and bids to target your ads.

Which one would help you in developing the best Amazon PPC strategy? Pick both! You will see why as you continue.

Now, let us start the exciting part: how to set up PPC on Amazon.

1. Optimize your chosen product listing

An Amazon sponsored product PPC ad acts as a "bait" to make customers buy your product, but the real deal happens when they click on the "Buy Now" button after they scan your product listing. Yes, unfortunately, online users, in general, will browse through your listing and will only focus on terms relevant to what they want.

Plus, sponsored product ads are made from the contents of your listing, especially the title.

Before you run a campaign, see to it your product listing is optimized. You can learn more about Amazon product listing optimization here.

2. Create an Automatic Targeting campaign first.

On your Seller Central account, you can create one under Campaign Manager. Then choose Automatic Targeting. Wait for one to two weeks to gather data.

Then, download the Search Term report and get all the high-converting keywords. You will use this for the Manual Targeting campaign. Thus, saving time and effort in searching relevant keywords as Amazon does it for you.

3. Create a Manual Targeting campaign.

Set up separate ad groups for three keyword match types, namely, broad match, exact match, and phrase match. Use the keywords you’ve filtered from the Search Term report of the Automatic Targeting campaign.

4. Set the bid amount.

Remember that our goal is an Amazon sponsored product PPC ad with lower ACoS. One way to do this is bidding with the lowest amount then increasing it gradually.

Say, if you start bidding at $0.20 and you noticed it is not getting conversions, you may increase it bit by bit until you reach a certain amount where you get the most conversions but lower ACoS. 

Moreover, you may avoid spending a lot of money at the start of your campaign that will eventually lead you to a high ACoS.

In conclusion, Amazon sponsored product PPC ads can help you maximize your reach and increase the chance of your products to be discovered, resulting in higher sales. It is achievable through the best Amazon PPC strategy, where you continuously monitor your campaigns' clicks and conversions. Moreover, conduct a regular Amazon PPC optimization to target the lowest ACoS as possible. Get professional help on how to set up PPC on Amazon. Seller Interactive has a team of experts that are willing to help create the best Amazon PPC strategy customized for your products. For inquiries, email [email protected]

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