The Ultimate Amazon PPC Beginner Guide
Published on by Matthias Habel
Amazon PPC is a powerful way to increase product visibility, drive purchase rates, and ultimately generate more revenue. This beginner's guide highlights strategies and best practices in Amazon PPC.
Table of contents
What Is Amazon PPC?
Amazon PPC Marketing (Pay-Per-Click) is a cost-effective advertising strategy where sellers pay only when a customer clicks on their ad. These ads appear in search results and on Amazon's product detail pages. They offer a targeted way to present your products to a wider audience and increase traffic to your product pages.
Without Amazon advertising, it is almost impossible to gain visibility for Amazon customers. Figure 1 shows the number of advertising spaces on the desktop variant of Amazon search results pages, as well as product detail pages.
The Basics of Amazon PPC Marketing
Before you dive into the world of Amazon PPC marketing, it's important to understand the basics. First of all, almost everything revolves around keywords. Choosing the right keywords is crucial because they influence when and where your ads are served. Keywords should correlate closely with your products and customers' search queries.
Automatic and Manual Amazon PPC Campaigns
With Amazon advertising, you have various campaign types at your disposal to advertise your products in a targeted manner. The main distinction is between manual and automatic campaigns. These two variants each offer different advantages and disadvantages, which will be examined in more detail below.
Automatic campaigns are especially recommended if you are just starting with Amazon advertising. Here, Amazon leaves a lot of the work to you, as the platform automatically selects relevant keywords and targets the ads accordingly. These keywords are determined based on your product information and descriptions. Amazon's artificial intelligence determines which keywords can match your products.
Time Savings: Automated campaigns require less manual setup because Amazon handles most of the process.
Wide reach: Thanks to automatic keyword selection, you can reach a wide range of search queries.
Limited control: you have less influence over the keywords and search terms you select.
Variance in performance: The performance of individual keywords can vary greatly, and not all of them necessarily lead to sales.
For a detailed and targeted advertising strategy, manual campaigns are the best option. Here, you choose the keywords you want your ads to target yourself. You can set bids and determine exactly which products should appear in the ads.
Complete control: you can select specific keywords and customize the ad texts.
Budget optimization: Your budget can be focused on keywords with the best results.
Time investment: Manual campaigns require more time and attention for keyword selection and budget allocation.
Experience Required: To achieve optimal results, some understanding of how to select the right keywords and optimize bids is necessary.
Whether automatic or manual, both types of campaigns have their own advantages and disadvantages. Automatic campaigns offer a simpler approach, especially for beginners. Manual campaigns, on the other hand, allow for greater control and customization. It may also make sense to use a mix of both types. Regular monitoring and adjustment of campaigns is crucial to ensure you get the most out of your Amazon advertising.
Amazon PPC - Campaign Types and Structure
Sponsored Products (Sponsored Products)
In this type of campaign, sellers or brands can highlight their individual products by placing ads that appear in search results and on product detail pages. These ads are marked as "sponsored". They work based on keywords that the advertiser selects. When a customer types a relevant keyword into the Amazon search bar, the sponsored ad for a product may appear. When a customer clicks on the ad, they are redirected to the product detail page.
Sponsored Brands (Sponsored Brands)
This type of campaign allows brands to showcase their products, logo and custom text in one ad. The ad can consist of multiple products and is usually displayed above the search results. It helps increase brand awareness and drive customers directly to a custom landing page or an Amazon store page for the brand. Sponsored Brands are especially useful for brands that want to build a broader presence on Amazon.
Sponsored Display (Sponsored Ad)
This type of campaign allows advertisers to place ads for their products on Amazon pages, as well as on external websites. The ads are placed based on the behavior and interests of Amazon customers. They can appear on product detail pages, search results pages, and in Amazon ad spaces outside the platform. Sponsored Display aims to target customers who are already interested in similar products, and thus can help increase visibility and sales.
The structure is almost the same for all types of campaigns. A campaign usually consists of several ad groups with various orientations. Ultimately, a click is forced via the final ad (products to be advertised), which should lead the customer to an Amazon product detail page, where in the best case the purchase takes place.
Alignments for Amazon PPC campaigns
The various Amazon PPC campaigns offer different targeting options to present your ads to exactly the right customers. Basically, the following always applies: Your customers either search for products in general (generically), or they search directly for your brand or that of your competition. This already results in a variety of strategies and targets for your Amazon advertising.
Below we list a general overview of the different alignment types. We use the so-called tagretting triangle to visualize the targeting strategy. The ad groups of a campaign should be built according to the targeting options.
- Keyword targeting: Here you select relevant keywords where you want your ads to appear. When a customer enters these keywords in the search bar, your ads are served.
- Product targeting: This option allows you to target your ads to specific product pages. Your ads will be displayed to customers who are already interested in similar products.
- Interest targeting: This allows you to select your target audience based on their interests and behaviors. This enables precise targeting of your potential customers.
- Audience targeting: Use this option to present your ads to specific customer groups such as "New Customers" or "Returning Customers".
- Placement targeting: You can select on which Amazon pages your ads should be placed. This offers the opportunity to have a targeted presence in specific product categories.
Keywords in Amazon PPC
Amazon PPC campaigns, as explained earlier, are managed using keywords, among other things. Keywords are keywords that match the search terms that potential buyers use in their search queries. The ad is displayed only when the keywords match the search terms. By choosing the right keywords, you can specify exactly which search queries you want your product ads to appear for and which ones you don't.
There are several types of keyword match types (matching the customer's search term to the advertised search term) that can be used to more precisely control the targeting of your ads to specific search queries:
- Exact match: the keyword must match the search term exactly.
- Phrase match: the keyword must be included in the search phrase, but may be accompanied by other words.
- Broad match: The keyword can appear in different variations in the search query.
Negative keywords help to ensure that ads are definitely not displayed for inappropriate search queries. For example, if a very expensive product is being sold that is very high quality, "cheap brands" or keywords like "cheap product XY" should be excluded from being shown in ads for it.
This understanding of keywords, their types and negative keywords is important to ensure that ads are displayed for relevant search queries and reach the right target audience, while avoiding unnecessary costs from non-relevant clicks.
Step-By-Step Guide to Creating a Manual Amazon PPC Campaign
- Target Audience Research: Who is your target audience, what problems does your product solve for them, and just as importantly, how does your target customer search?
- Campaign type: which campaign type best supports your goal?
- Keyword research: conduct a thorough keyword research to identify the most relevant and appropriate keywords for your products.
- Set budget: Define a realistic budget for your campaign. Take into account your goals and the competitive landscape.
- Set bids: Set bids for your keywords. Make sure your bids are competitive to ensure adequate visibility.
- Create ad groups: Structure your campaign by grouping relevant keywords into ad groups. This makes it easier to monitor and optimize.
- Create ads: Select the most relevant products to the keywords or write compelling ad copy, depending on the campaign type.
- Activate the campaign: launch your campaign and monitor performance regularly. Use Amazon's reporting tools to get insights into the performance of your ads.
Success Measurement and Optimization
Running a successful Amazon PPC campaign doesn't end with activation. Continuous monitoring, evaluation, and optimization of your campaigns are critical to achieving the best possible results.
Campaign Performance Measurement
Monitoring your campaign performance allows you to assess the success of your ads and identify opportunities for improvement. Here are some key metrics to keep an eye on:
- Advertising revenue: This value reflects the revenue generated via advertising. Note, it is the GROSS revenue.
- Advertising Cost or Ad Spend: Shows the advertising spend NET.
- Advertising Cost of Sales (ACoS): The ratio of spend to revenue. The smaller the % value, the better.
- Return on Ad Spend (RoAS): The opposite of ACoS. The value shows the ratio between revenue and spend.
- Click-through rate (CTR): This is the ratio between the number of clicks on your ad and the number of impressions. A higher CTR indicates that your ad is relevant and engaging.
- Conversion rate: The conversion rate indicates how many clicks actually resulted in a purchase. A higher conversion rate indicates effective landing page design and relevant keywords.
- Cost-Per-Click (CPC): The CPC indicates how much you pay per click. A low CPC is desirable because it minimizes your costs.
- Optimizing your Amazon PPC campaigns is based on analyzing the data you collect. Here are some proven strategies:
- Keyword optimization: remove poorly performing keywords or increase bids for keywords that convert well.
- Ad optimization: test different ad copy to see which works best. Emphasize product benefits and call to action.
- Budget allocation: allocate your budget to keywords and ad groups that deliver the best results. Maintain budget for top performers.
- Product Page Optimization: If you see through advertising that customer search terms are performing particularly well, incorporate them into your product pages as well. Basically, of course, you should always optimize your pages before placing Amazon ads ("Amazon Readiness").
Tools to Support Analysis and Control
The evaluation and control of your Amazon PPC campaigns can be facilitated via various tools:
- Amazon Advertising Console: The Amazon Advertising Console provides detailed insights into the performance of your campaigns, keywords and ads. Here you can manually adjust bids or store rules for the Amazon algorithm.
- Third-party tools: There are a variety of third-party tools that offer advanced analytics and automation features. Most of these tools are rule-based. This means that defaults are created for certain KPIs and associated actions when achieved. For example, when a certain ACoS is reached, defaults can be preset for CPC changes. The tool then regulates automatically and there is no need for manual effort.
Resources and further information
For more in-depth information and useful resources, we recommend taking advantage of continuing education opportunities. Feel free to contact us at any time for training and education.
Participating in Amazon webinars or third-party tool knowledge bases is also highly recommended to deepen your Amazon PPC knowledge. The field of Amazon advertising is evolving on a weekly basis and therefore offers opportunities and risks.
Frequently asked questions
Matthias Habel is co-founder and managing director of Fischer & Habel and a sought-after expert when it comes to selling on Amazon, the world's largest product search engine.