9 Costly Amazon PPC Optimization Mistakes and How to Fix Them

Last updated on June 23rd, 2023

Written by Ken Zhou

Amazon PPC optimization happens after you start running your sponsored ads campaign. It’s when you realize you’re not meeting your objectives and your ACoS (Average Cost of Sale) is too high. 

When that happens, it’s time you backpedal a bit and revisit your live Amazon PPC campaigns. Take this opportunity to determine the root of the problem, find cost-effective solutions, and develop the best Amazon PPC strategy.

We’ve listed some common and costly sponsored ad mistakes Amazon sellers encounter and how to apply the right PPC optimization technique to each. We will also share some best practices to ensure successful PPC campaigns. 

9 Amazon PPC Optimization Mistakes That Affect Your Ad Spend

Amazon advertising allows you to introduce your brand and products to the public, especially if you are new in the industry. As this strategy involves spending money, you must be more cautious in running your PPC ad campaign to avoid costly mistakes. 

Here are nine common mistakes that can affect your advertising cost: 

Mistake #1: Treating Amazon Ads Like Facebook Ads

Amazon ads work differently from Facebook ads, but you may not be aware of it and treat them similarly, leading to significantly costly mistakes. The consumer behavior, targeting and intent, placement, and ad format and design are unique in each platform. 

For example, Facebook ads are quite similar to intrusive pop-up ads that appear unexpectedly on various parts of the screen. Amazon PPC ads don’t work this way. They only appear when they are relevant to the customer’s needs. One of the factors contributing to this behavior is the keyword the buyer enters in Amazon’s search box. 

How to optimize it: 

Amazon uses an auction-based cost-per-click (CPC) inventory model. Sometimes the seller with the highest bid grabs first place in Amazon’s search results, followed by the second, and so forth.

Consider several factors, like your bid price and the product’s relevance. Also, try tweaking your keywords by doing the following:

• Use relevant keywords. If you’re selling pillowcases, avoid keywords associated with electronics.
• Add relevant keywords. It is pretty rare for shoppers to use exact-match keywords. Utilize other keyword match types like phrase match and broad match to maximize your chances.

Mistake #2: Poor Structure of Amazon PPC Campaigns

All your efforts will be futile if you fail to structure your PPC campaigns properly. It will be impossible to scale up your advertising campaign over time. 

While it's tempting to cleanse, repeat, or delete your current ad to create a new one, doing so can affect the performance of your product listings and sales. This ultimately leads to wasting the allocated ad campaign budget.

How to optimize it:

Avoid adding several related products in a single ad group. For starters, use this basic structure:

Mistake #3: Unsystematic Naming Convention

If not done right the first time, the naming convention may affect your PPC optimization in the future. Imagine labeling an Amazon PPC campaign “Test 123,” “Test ABC,” “XYZ ad,” or “Amazon Campaign no.1.” when you’re A/B testing. Then, after running several tests over the week, you launched it without making changes. 

This makes it difficult to track and analyze your campaign performance effectively. It also leads to inefficiencies, confusion, and wasted resources, hindering your ability to allocate ad budget wisely. 

How to optimize it:

Before creating an advertising campaign, plan a logical and easy-to-understand naming format. For example, use the template “Campaign name: wireless headphones.” Be sure to put the product you will promote on the label so you won’t have trouble monitoring it.

Mistake #4: Excluding Misspelled Keywords

Wrong spelling is wrong, right? Keyword typos in your campaigns can cause irrelevant clicks, low conversion rates, limited reach, and high competition. This leads to higher bid pricing and CPC. But they can benefit your PPC strategy, which we reveal below.

How to optimize it:

On the contrary, Amazon’s A10 algorithm considers and evaluates misspelled search queries when ranking product listings. It has a bearing on your PPC campaigns’ visibility. If a customer enters “headfones,” it will not show ads with “headphones” as its keyword. So, don’t skimp on the opportunity and add misspelled words to your keyword list.

Add some negative keywords and close variations, such as “shoes” and “shoe.” On the other hand, Amazon ignores words like “the,” “when,” “of,” and “if.” But while it’s good to expand your keyword coverage and maximize your reach with these variants, learn to exclude irrelevant terms to avoid hurting your account's performance.

Mistake #5: Using Automatic PPC Campaigns Only

Running your Amazon PPC in auto-campaign mode helps you match your ads to relevant search queries and products. However, you might overspend your ad budget if you only use automatic campaigns and always follow Amazon's recommended bid. 

On the other hand, manual campaigns give you more control to customize and optimize Amazon PPC campaigns. 

How to optimize it:

We recommend using both types of Amazon PPC campaigns to widen your targeting opportunities and have more control over your budget. You may use the keywords from the automatic campaign’s ‘Search Term Report’ and add these to your manual campaign. In this way, you won’t have to conduct exhaustive keyword research.

Here’s an additional, more in-depth tip for utilizing effective automatic and manual campaigns, according to our team’s experts:

Mistake #6: Monitoring ACoS Only

In PPC optimization, one of the metrics you should continuously check is ACoS or Advertising Cost of Sales. ACoS is computed by the total amount you’ve spent divided by the total sales on a single campaign. 

The lower your ACoS, the better. But ACoS is not the only barometer of an efficient PPC campaign. If you monitor ACoS only, you risk spending more on your ad spend without knowing if your ads rank or attract more clicks.  

How to fix this mindset:

Besides ACoS, measure other metrics like conversion rate (CR) and click-through rate (CTR). If you score high in both indicators, you can win a bid better. CR gauges your sales, and CTR determines how relevant a product is to customers. 

As a standard, a good CR is around 10%, CTR is 0.5% and above, and ACoS is about 15% to 30%. These rates, however, are only general estimations. The perfect rates for your metrics still depend on your niche, product type, profit margins, and advertising goals.

Mistake #7: Mixing Brand and Non-Brand Keywords

Branded keywords and non-branded keywords offer different functions and intent. Brand keywords target customers with a high intent to search for your products. Meanwhile, non-branded keywords focus on people who are unaware of your business but looking for similar products.

Using brand and non-brand keywords within a single PPC campaign is not advisable. It can lead to lower ad relevance and fewer CTR because of the confusing targeting and intent of the ad. Naturally, this results in inefficient budget allocation. 

How to optimize it:

Better put each keyword in separate PPC campaigns to maximize targeting outreach. According to the Search Engine Journal, this strategy gives you transparency to monitor your PPC ads well and optimize them easily. It also prevents competitors from using your brand keywords to sabotage your Amazon PPC campaigns.

Mistake #8: Running Out of Stock

You’re so focused on the technical aspects of your PPC optimization that you forget about your inventory. That is not good; what if you run out of stock? That would mean you will continue to run PPC campaigns without available products, resulting in wasted costs.

Product stock availability is also part of Amazon's Retail Readiness Checklist. It's your duty to ensure your items are available. Otherwise, it creates a wrong impression that you're unable to fulfill your customer's needs. Amazon will stop showing your PPC ads, affecting conversions, organic search ranking, and overall listing performance.

How to optimize it:

Ensure proper inventory management and devise restocking strategies to maintain product availability and prevent stockouts. Don’t know how to start with inventory management? 

Amazon can help you with multi-channel inventory management if you sell across multiple marketplace platforms. Amazon offers free software called Veeqo, which syncs and monitors your inventory across channels, locations, and FBA. This will help you avoid overselling. 

If you're an Amazon FBA seller, you can access the tools under the FBA program to help you monitor your inventory in Amazon's warehouses. You can view these tools through your Seller Central dashboard and mobile app. 

Aside from the tools, you can also practice proper inventory management by

• monitoring your inventory levels, 
• restocking popular products quickly, and 
• running promotions to avoid spoilage and free up your storage space. 

Mistake #9: Developing a Habit of “Set-it-and-Forget-it” Approach

Do you continuously optimize your Amazon PPC campaign? Or did you simply launch it and expect your ad campaign to do its magic? Unfortunately, there is no such thing as a “magic pill” when managing Amazon PPC campaigns. 

Devising the best Amazon PPC strategy requires hard work, dedication, and an analytical mind. If you treat your campaigns as a one-time task, you are wasting every penny you spend on every ad.

How to fix this mindset:

Whether you’re busy or simply forgetful, make it a habit to monitor and optimize Amazon PPC campaigns regularly. For example, set a fixed schedule at least once a week. The ecommerce world is constantly evolving, so it is best to consistently check on your advertising efforts and ensure they align with your current goals.

To do this:

1. Put your campaign objective on top of your mind as you review your ad, and check out metrics like CR, CTR, ACoS, etc.
2. Analyze if you need to adjust your bid or optimize your keywords.
3. Try applying the right PPC strategy to get on top of Amazon's search results.

Best Amazon PPC Optimization Practices for Your Ad Campaigns

Now that you know the common mistakes in Amazon campaign optimization, learning more about how to optimize PPC campaigns better would be helpful. In this section, we listed some of the best Amazon PPC tips you can do to achieve great heights for your business.

1. Research High Performing Keywords

Even though you will receive important keyword data once you have started Amazon advertising, it would still be best to do your keyword research. For keyword optimization, gather the highest converting keywords to get the most out of your ad spend.

Doing this will help you get more insights into what customers are searching for and trends you should watch out for before implementing your next ad campaigns. You can use online keyword generator tools to help you find the right keywords. 

But if you need professional help for this task, you can reach out to Amazon SEO or PPC managers instead.

2. Identify Your Budget for Amazon PPC Campaign

As mentioned above, Amazon’s PPC ads are convenient even for small and medium-sized enterprises (SMEs) because they are affordable but effective. But as an Amazon seller, you must also be wise about how much you must spend on running your Amazon campaigns.

So, calculate your ACoS first because it will influence your advertising budget. Also, avoid putting all your resources immediately. Study consumer behavior and trends and consider your overall advertising budget. 

By doing these, you can run your Amazon ads longer, leading to more visibility. 

3. Apply Strategy Testing

Once you start running your Amazon PPC ad campaigns, you have control over which keywords to bid on, how much you want to spend, and how long you want the ads running. Of course, you will also encounter changes in the weekly data you gather. 

So it’s important to review the ad reports and use them to modify your strategies on keyword selection and bidding amount. Mix and match all possible options and check which ones would work best for your advertising campaigns. 

Some sellers manage this, while new sellers often refer to professional opinions from reputable Amazon PPC marketing agencies. 

4. Study the Results

Key metrics can be used to study your advertising campaigns’ results, such as RoAS and ACoS. Examine these results and ask yourself which ad campaigns successfully generated sales with minimal ad spend. 

You can boost these campaigns and turn off those not performing as well. Monitoring your results should be conducted at least once a week to allow Amazon to reflect your Campaign Manager’s exact data.

5. Create Eye-Catching Amazon Ads

Aside from optimizing your keywords and other aspects of your ad campaigns, don’t forget to improve your product descriptions and photos. People can already judge your brand based on what they see in the ad. 

If they like what they see, they will likely click your ad and look at your product listing. For example, your product listing copy should be compelling to persuade your target customers to buy your items. 

Even if they click your ad, it’s not guaranteed that they will purchase from you unless you convince them through compelling product descriptions and pictures. So while PPC strategies are necessary, don’t forget to craft a compelling product listing.

Final Thoughts

Don’t be disheartened if you make a mistake with your sponsored ads. You can apply the best PPC optimization tips mentioned above until Amazon deems your product relevant. An optimized PPC campaign is your way to outsmart your competitors, increase brand awareness, and improve your sales.
Do you want to have the best Amazon PPC strategy? Seller Interactive has a team of expert Amazon consultants knowledgeable in Amazon PPC optimization. Send us an email at [email protected] to get started.