Boost Your Sales Using Optimized Amazon PPC Strategy and Bidding

December 7, 2021
Written by Kevin Wong
Amazon PPC Strategy

A lot of Amazon sellers attribute their success to their effective and innovative Amazon advertising PPC strategy. Amazon PPC helps products on the rise by increasing brand awareness, better product placement and visibility, and organic traffic and audience formation. For example, dynamic bid strategy Amazon PPC provides sellers with an automated option to bid lower or higher based on the real-time conversion forecast.

There is a definite learning curve when getting started with Amazon PPC. A campaign will typically take some time and adjustments before delivering favorable results which can be frustrating, especially when getting started. In addition, you’ll need to get familiar with terms like conversion, clicks, impressions, ACoS, which are just the tip of the iceberg when diving into Amazon PPC.  

Getting overwhelmed? Don’t worry because in this article we will show you how to effectively plan out the best Amazon PPC strategy using easy-to-use techniques and clear explanations.

What is Amazon PPC?

Did you know that at least 12 million product listings exist on Amazon? So naturally, competition is an undeniable threat to any new seller with numbers like this. Fortunately, sellers can advertise their products to gain visibility and promote sales – that’s where Amazon PPC comes in.

Amazon PPC stands for Pay-Per-Click. Amazon’s advertising platform houses a model where an advertiser, AKA the Amazon seller, is charged when a potential buyer clicks their ad and is redirected to the product’s listing, increasing the potential for sale. On this platform, the seller is free to create and customize campaigns that help promote the sales and profitability of the product.

Key Terms in Amazon PPC:

Amazon PPC is riddled with so many technical terms, but don’t stress, we’ve got you covered.

Keywords

Keywords are terms or phrases that users enter on the Amazon search bar when shopping on Amazon. Sellers enhance their product listing by including these terms, which can help increase the visibility and ranking of your product listing.

Impressions

Impressions are the number of times users see the ad on Amazon.

Clicks

Clicks refer to the number of times users clicked the ad.

CTR (Click-through Rate)

CTR is the percentage of clicks over impressions (Clicks ÷ Impressions), i.e., if one user clicked your ad after it was seen 100 times, it would be considered a 1% CTR. 

Conversion Rate

Conversion refers to the percentage of sales over the number of clicks. So, for example, if you received 3 sales out of 10 clicks, your conversion rate would be 30%.

ACoS (Advertising Cost of Sale)

ACoS is one of the key metrics in measuring the profitability of an Amazon PPC campaign. It refers to the ad spent over sales. So, if you spent $10 on advertising and received $100 worth of sales, then your ACoS is 10%.

RoAS (Return on Ad Spend)

Similar to ACoS, RoAS is a metric used in Amazon PPC campaign performance. It is the inverse of ACoS. For example, say you earned $100 for $10 ad spend, then your RoAS is 10:1.

CPC (Cost-Per-Click)

CPC is a PPC ad mechanism for advertisers to determine the value of a click. When a shopper clicks an ad, the advertiser pays Amazon the bid value stated in the Campaign Manager on Seller Central.

Automatic targeting

Automatic targeting is a mode in Amazon advertising campaigns that lets Amazon manage the settings for your ads. This option is optimal for advertisers who are just getting started with advertising, specifically Amazon PPC.

Manual targeting

Unlike automatic targeting, advertisers can customize the settings for their campaigns. This option is suitable for advertisers who have experience in Amazon PPC and are ready to experiment on the platform.

Amazon homepage

Three Different Types of PPC Ads

There are three types of Amazon PPC  – Sponsored Products, Sponsored Brands, and Sponsored Displays. They each have their own features and benefits that you can use to run these types of campaigns effectively. 

Sponsored Products are PPC ads that display your ad on the top, alongside or within Amazon search results. They also appear on product pages in mobile and desktop views. ASINs typically show positive results when using Sponsored Products ads. Not only does it increase the impressions you receive on your listing, but it also makes your product look more appealing to buyers.

On the other hand, sponsored brands are recommended for new and growing brands. They are effective in heightening brand awareness to their target market. Like Sponsored Products ads, sponsored brands appear within the marketplace in the same way. This type of Amazon ad is available for brands enrolled in Amazon Brand Registry. Many brands have seen significant increases in their metrics due to ads across different niches on Amazon.

Finally, Sponsored Display ads appear both on and off Amazon. Amazon can display ads in mobile, desktop, and app views with its subsidiaries and third-party partner sites. 

These three ad types are self-service, which means advertisers can customize their ads and manage their campaigns manually and on their own. Amazon does not interfere with the advertisements, and you can control the details you want to modify entirely. Keep in mind, these ads are all CPC, so you will only have to pay Amazon when a shopper clicks your ad. Every click has a bid which means the higher the bid, the more likely it will appear to the user shopping on Amazon. 

Amazon PPC Strategy

There are a lot of different strategies that can be practiced when advertising on Amazon. They are continuously changing to cater to the ever-changing demand of the target market. While accumulating profit is still the primary goal of businesses when using Amazon PPC campaigns, you can customize your campaign to promote other objectives like increasing brand awareness, selling through inventory.

Do Your Research

This step is highly demanding and requires time and effort to yield the best results. Researching keywords, audience insights, product targeting, trends, current events, and many other things will significantly equip you with the knowledge to help you succeed with your Amazon PPC campaigns.

Proceed to Strategy Testing

Once you’ve conducted your research, you can develop a strategy that best suits your objectives. Some sellers manage this, while new sellers often refer to professional opinions from reputable Amazon PPC marketing agencies

One neat trick to try is to select automatic targeting when testing a keyword, then let it run for a week with a minimal budget limit. This period can help collect data to determine whether or not a specific keyword campaign produces favorable results or not. You can use this information towards manual targeting to maximize its potential if it does.

Study the Results

Several key metrics are used to study your advertising campaigns’ results, such as RoAS and ACoS. Examine the results and ask yourself which 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.

Apply measures for success and repeat steps 1, 2, and 3.

After you’ve generated results from your campaign, you can repeat this strategy to boost your sales and revenue on other profitable keywords. The outcome of CPC relies on the keywords and graphics of your product listings. Pictures and videos can help entice shoppers to hit the Buy Box. By monitoring your data producing effective campaigns, you should scale your business effectively. 

Bidding Strategies in Amazon PPC

One of the vital components of a successful Amazon PPC strategy is selecting the right bidding strategy. Advertisers set bids to compete for the top search results when shoppers use a keyword to look for a product. The higher the bid, the higher the product’s visibility.

Amazon introduced dynamic bidding back in early 2019 to give users an option to automatically adjust their bid prices for their PPC campaigns about their conversion. Let us look at the three main modes under bidding strategies:

Dynamic Bid – Down

Amazon can reduce the bid down to 100% in this mode when it sees that clicks are not likely to be converted to sales. It was the default setting before the option of dynamic bidding up and down was released.

Dynamic Bid – Up and Down

If clicks have a reasonable conversion rate, Amazon will show your Sponsored Products ad at the top of the search results. It will then raise your bid to up to 100%. For the other placements, bids will remain increased at 50%.

Fixed Bid

There is no modification in the bidding value. What you set as your default bid will remain the same.

Which bidding strategy to choose?

There is no “best” bidding strategy because each has its pros and cons. For example, dynamic bid-down works best in PPC ad campaigns at the beginning of the cycles to see which keywords perform well after 2-4 weeks. Only then is dynamic bid-up-and-down an excellent option for best-performing keywords to maximize their potential in giving you conversions. On the other hand, the fixed bid is chosen when your goal is to obtain increased brand awareness since Amazon will show your ads to the users in a constant bid.

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Final Thoughts

Amazon PPC is indeed complex. Due to its nature, Amazon PPC specialists and agencies exist to assist sellers in planning their Amazon PPC strategy, doing the research, making the materials, measuring KPIs, and optimizing their ad campaigns. This is why Seller Interactive is here for you.

Seller Interactive has in-house teams of Amazon PPC specialists with a proven track record of PPC training and education. In addition, their experience in PPC advertising provides an advantage when developing strategies on what works and what does not work. 

Value your time and cut your losses. Exceed your competitors and boost your sales. What are you waiting for? Contact us at [email protected] for Amazon PPC strategy, today!

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