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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.

The Ultimate Amazon PPC Beginner Guide

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.

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.

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.

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

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.

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.

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.

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.

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.

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.

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").

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.

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.

Amazon is launching a TikTok-inspired social commerce shopping feed in the US in December 2022. The e-commerce giant is thus revolutionizing its digital shopping experience and turning the tables on the well-known social media platforms.

Amazon Inspire - Ecommerce meets Social Media

The boundaries between social media and commerce platforms have been blurring for some time. While platforms such as Instagram and Tiktok are increasingly penetrating the commerce sector, Amazon will in future offer video and image content based on personal interests. Customers will discover products and trends tailored to them directly in the Amazon app. This is also where the final purchase is made.

Proven commerce platform meets young target group

Amazon's latest feature is designed to attract the attention of a young target group. Generations Z and Alpha move intuitively and naturally on platforms such as TikTok and Instagram. Purchase decisions are made there based on recommendations from influencers and content creators. However, the focus is not on the purchase itself, but on entertainment. Through Inspire, Amazon is trying to reach this target group and at the same time retain existing customers in the app and on Amazon.

The Inspire feed is accessed via a lightbulb icon within the Amazon Shopping app. Customers enter their interests within the 20 existing product categories. The look and feel is very reminiscent of Pinterest's interface. Everything else is tried and true: Users can like posts and, similar to TikTok, swipe up from the bottom of the vertical feed to see the next post.

Brands and authorized retailers can post their content and products on Inspire. They can access content from brand ambassadors or develop their own content, among other options.

The prerequisite for participating in the Inspire feature is an existing Amazon Brand Registry and an existing Brand Store. The clicks are ultimately directed to this store and the customers make the purchase.

Amazon has been testing the new shopping function for selected customers and influencers in the U.S. since mid-2022. From December 2022 or in the following months, the offer is to be extended to all customers in the USA.

Whether and when Amazon Inspire will also be available in the EU is not yet known. The first provisions are already visible in the Amazon back end. If the test phase is successful, a launch in Europe is likely.

With its image and video content and user experience, the new format is strongly reminiscent of the internationally known social media platforms such as Tiktok, Instagram and Pinterest. Amazon wants to tap into new and especially younger target groups and retain them in the long term. The aim is to make the shopping experience of its customers more entertaining and encourage them to buy. Whether the marketplace can compete with the leading social media champions remains to be seen at this stage.

Amazon is the largest online mail order company in the world. In Germany alone, there are over 55,000 active retailers (as of 2016). These offer more than 229 million products in over 35 main categories on the German market. Amazon is therefore an interesting target for product counterfeiters.

Amazon Transparency - With Transparency Against Counterfeiting

The basic principle of how Amazon bundles this abundance of offered products on the platform is simple. In contrast to eBay, where each offer has its own eBay item number, Amazon assigns each product an individual identification number - the Amazon Standard Identification Number (ASIN for short). Every merchant who wants to sell this product on the Amazon Marketplace must necessarily offer it under the same identification number. However, there are a large number of competitors on the Amazon Marketplace who sell the same products. Thus, a product is usually offered by several retailers and ultimately the price war decides on the sale. Since Amazon wants to counteract monopolization through this bundling, this approach is completely unproblematic in the first place.

It becomes problematic for both retailers and customers when product counterfeiters use the same ASIN to sell inferior knock-offs. In addition to negative customer reviews, this can even result in warning procedures. The company itself states that it does not tolerate counterfeit products. According to the terms of participation, their offer on the Amazon Marketplace is prohibited. However, it has not yet been possible to completely prevent counterfeits on the platform. According to Amazon, however, "it is the responsibility of the seller and supplier to obtain, sell and ship only authentic products." Amazon has already been criticized several times for the fact that the principle of personal responsibility applies on Amazon Marketplace and that brand owners must independently monitor the use of their own brand by third parties.

A prominent case occurred at the end of 2017: The traditional German manufacturer Birkenstock left the German Amazon Marketplace at the turn of 2018. The company had already withdrawn from the US marketplace in 2016 due to repeated product counterfeiting. The manufacturer justified its withdrawal with a disturbed relationship of trust with Amazon. The US company was said not to have done enough to prevent legal violations on the marketplace. Birkenstock had expected Amazon to eliminate and prevent legal violations independently and without being asked to do so. However, the online giant had "not prevented on its own initiative " counterfeit products from being sold through the marketplace. Finally, the management duo Bensberg and Reichert decided to discontinue all business relations with Amazon. Since then, the company no longer supplies the online store worldwide.

However, even though Amazon has so far only eliminated infringements as soon as a rights holder reports this, Amazon supports merchants with various tools for monitoring their own brand and prosecuting possible infringements. Amazon Trademark Registration has already offered owners of a word mark and/or word/figurative mark protection on several levels since May 2017. You can thus protect your "intellectual property on the online trading platform and create a correct and trustworthy experience for your customers on Amazon". Registration is definitely worthwhile, because in addition, brand owners receive exclusive writing rights in relation to all product descriptions and images sold under the brand. This way, the image of the brand can be protected as well.

Amazon is continuously working on new technology-driven solutions to increase transparency and protect brands and customers from counterfeiting. With Transparency, Amazon recently made available its new item-level authentication service: Using uniquely generated codes, Amazon, brand owners, customers as well as other supply chain stakeholders can authenticate each product unit. According to Amazon, uniquely authenticating each product unit is "the most effective way to combat and prevent counterfeiting across the supply chain."

It is crucial for the authentication process that the Amazon Transparency Code is unique per product: To ensure that the product is not a counterfeit, Amazon scans the codes as soon as products participating in the Transparency Program are delivered to a fulfillment center. If a duplicate code is discovered, Amazon immediately withdraws the counterfeit goods from circulation and destroys them. Transparency also allows customers to verify authenticity. Regardless of whether the product was purchased from Amazon, another online store or a brick-and-mortar retailer. Customers can use the free Transparency app to check the code on the product. The app checks the product for authenticity and, in the event of positive authentication, also displays the stored information at item level.

The program has already been tested promisingly in the USA. With over 4,000 brands participating and over 300 million codes generated, Amazon was able to proactively remove 250,000 counterfeits from circulation. Now Transparency has been extended to Amazon marketplaces in Germany, France, Italy, Spain, the UK, India and Canada. To register with Transparency, brand owners must have a Global Trade Item Number (GTIN for short), such as an EAN or UPC barcode, affixed to their products. Amazon then generates the unique Transparency codes for each item, which must be affixed to the respective product unit in addition to the GTIN. For each item, the 26-character encrypted identification number is unique. In addition to the date and place of manufacture, it contains additional product information such as the materials and ingredients used.

With the Seller and Vendor programs, Amazon offers sellers two ways to distribute goods using the world's largest product search engine.

Seller vs. Vendor - Amazon Consulting

Sellers who want to use Amazon Marketplace as a sales channel must register with a professional seller account in Amazon Seller Central (ASC) at the beginning. While Seller Central is available to all sellers, the vendor program can only be participated in with an exclusive invitation from Amazon. The so-called third-party seller marketplace model has so far been aimed more at small to medium-sized merchants. On the other hand, brand manufacturers, larger manufacturers and wholesalers were invited to cooperate directly and act as vendors on the marketplace.

One of the most fundamental differences between the programs is whether the goods are ultimately sold on Amazon directly to the end customer or to Amazon: Sellers sell their products on the platform directly to the end customer (B2C) and are therefore responsible in every respect for the sales process as well as marketing and logistics. They have full control over pricing, product listing, selling the goods, and customer support. In contrast, Vendors supply Amazon with their products (B2B) and act more like pure suppliers. Vendors are thus only responsible for the product selection and also relinquish full control to Amazon. While attractive conditions, advantages in the battle for the shopping cart field, and a lack of capacity in the company itself used to be decisive arguments for participating in the vendor program, increasingly frustrated manufacturers are questioning the cooperation with Amazon. Not least because of inflexible contract conditions, the trend can be observed that more and more vendors are switching to the seller program. Since manufacturers are still responsible for maintaining content and marketing activities in the vendor program, the switch to the seller program brings decisive advantages with a comparable effort. The question of whether it is worth accepting an invitation as a vendor or switching to the seller program is often raised during an Amazon Consulting session. Accordingly, the respective advantages and disadvantages of the two variants should be weighed up with regard to the company's own strategy.

While no negotiations with Amazon are necessary for the seller program, vendors usually have to agree to non-transparent and sometimes unfavorable conditions. Accordingly, vendors become extremely dependent on Amazon, which leaves little room for their own decisions. For example, with a standard 7-20 percent, sellers not only have significantly lower levies on Amazon. While sellers can set the sales prices independently and control them accordingly, vendors also transfer all rights to Amazon with regard to pricing and lose the associated influence on sales margins. Since it can be observed time and again that Amazon exerts pressure on market prices in the battle for the shopping cart field with other merchants, high price erosion is generally possible. In some cases, Amazon offers products below the respective RRP, so that sellers in the vendor program have to be prepared for comparatively lower margins. The note "Sold by ..." shows the customer on the product detail page below the shopping cart field with whom a deal has been concluded and under what conditions the goods are shipped. Since the Amazon brand is usually trusted more than a possibly unknown third-party vendor, there is an assumption that customers prefer to buy directly from Amazon and that vendors can expect higher sales accordingly. However, it is questionable to what extent customers actually make their final purchase decision dependent on this indication and whether this compensates for the lower margins. Ultimately, vendors must also be prepared for sometimes long payment terms of up to 90 days, while sellers can look forward to receiving money after just 14 days.

Sellers have full control over listings, the products offered and thus product availabilities. Accordingly, proactive inventory management is necessary. Since vendors supply Amazon with their products, the listing and availability are ultimately in Amazon's hands. It is not uncommon for Amazon to place small orders to different warehouses several times a week. In addition, Amazon provides for penalties should vendors fail to deliver the products properly and promptly to the desired warehouse. In the case of vendors, Amazon handles all logistics and offers the end customer the Amazon Prime service at no additional cost to vendors. In addition to its own shipping (Fulfillment by Merchant - FBM), however, Amazon also offers all sellers the opportunity to participate in the Fulfillment by Amazon (FBA) program for a corresponding fee. Similar to a consignment warehouse, the goods are stored in Germany within one of the 12 Amazon Fulfillment Centers (AFC), but continue to belong to the seller until the sale and only the shipping and returns management are handled by Amazon. Through FBA, Amazon Prime shipping benefits can be enjoyed, so joining the FBA program is always recommended. Since Amazon Prime customers are more likely to order from participating sellers thanks to the free and fast shipping, FBA also brings decisive advantages in the competition for the shopping cart space, so that sales can be increased significantly.

In order to be able to present the products in the best possible way, sellers and vendors have similar presentation options at their disposal. Sellers with a brand registered on Amazon, for example, have the same option as vendors to use A+ content, i.e. extended content for the product description, and to create their own Amazon Brand Store. While Amazon Advertising Services were previously only available through Vendor Central, sellers now also have the ability to use Sponsored Products, Sponsored Brands and Demand-Side-Platform Display ad campaigns to increase visibility and drive sales. Both Sellers and Vendors are responsible for displaying products and, if applicable, the Brand Store, as well as creating and managing ad campaigns. Accordingly, Sellers must pay advertising expenses to Amazon in both programs. While Amazon thus receives advertising revenue from vendors on the one hand and the revenue generated by the advertising campaigns is additionally generated on Amazon's side, sellers can book the direct revenue on their own company's side.

Since sellers manage sales independently, they have much more information at their disposal via Seller Central than via Vendor Central. With shopping cart statistics, customer and transaction data, and shopping cart field quotas, they thus receive relevant information that can also provide important target group insights beyond the sales channel. However, sellers must be prepared to regularly check the relevant quality indicators. This also includes the fact that sellers are responsible for customer service and must answer customer inquiries within 24 hours. In addition, returns should be handled promptly for in-house shipments. While Amazon takes care of this service in the Vendor program, a greater effort is required from Sellers. However, sellers thus have the opportunity to receive direct feedback on the products and, if applicable, the brand through contact with the end customer.

Selling on Amazon and the associated international expansion opportunities are becoming increasingly interesting for many sellers. But how important is Amazon today and which global marketplaces are currently available?

Selling on Amazon - Worldwide

Jeff Bezos founded Amazon in 1994 and led the then online bookstore out of the garage to become one of the world's currently most successful online mail order companies. On the German Amazon Marketplace alone, more than 300 million different products were offered in 2018. In view of this abundance, it is therefore not surprising that for more and more people the Amazon Marketplace has become the first port of call for product and information searches and that roughly every second order in the e-commerce sector is processed via Amazon. In Germany, for example, over 44 million customers click on "Buy now" several times a year. According to statistics from the IFH Cologne, a rising trend is emerging: while in 2004 a German Amazon customer ordered around eight times from Amazon, in 2017 they already clicked on "Buy now" an average of 41 times. Thus, Amazon's German trading platform generated a trading volume of more than 20 billion euros in the 2018 financial year. The more than 300,000 third-party retailers on the German market generated around 45% of this trading revenue.

A look at Amazon's global sales shows that it is not only the German market that offers enormous potential for retailers. Amazon generated around 232.89 billion US dollars on its 16 online marketplaces worldwide in 2018. While the marketplaces in China (amazon.cn) as well as in India (amazon.in) are currently only accessible to sellers based within these countries, Amazon offers merchants the opportunity to sell worldwide on the 14 other marketplaces regardless of their place of business. Selling globally on Amazon can expand sales activities and reach millions of new customers through the international Marketplaces. The following table provides an overview of the Amazon Marketplaces in Asia (6), Europe (5), Oceania (1), and North and South America (4) and when the platforms launched.