Supercharge your Amazon Business

What Is Amazon PPC? How the Amazon PPC Auction Works

Diving into the world of Amazon PPC (Pay Per Click) Advertising can be intimidating. However, it can get a lot messy and eat up your budget if you do not think over it and have the right campaign strategy.

The guide is designed to not only walk you through set up on Amazon PPC and how Amazon PPC advertisement works but ensure you have the necessary assets in place to run successful campaigns. Beyond the basic stuff, we’ll also review keyword research and creative tips and tricks in the future articles.

amazon ppc beginner best practices

These are the main points covered in this article. If you are here looking for something specific, feel free to click on any section that interest you the most.

What is Amazon PPC?

PPC is the abbreviation of Pay per click, simply meaning you pay each time your ad is clicked on. Correctly managed Amazon ppc advertising can drive more sales, boost the visibility of a product, build brand awareness for a newly launched product, and even increase the potential for more reviews.

When should you activate Amazon Pay Per Click (PPC)?

We recommend that you activate your Amazon Pay Per Click (PPC) as soon as you have a new listing. To improve the effectiveness of your Amazon PPC campaign, you can wait till your listing has 3- 5 reviews also. But nevertheless, you should start the Amazon Pay Per Click (PPC) campaign as soon as the listing is live for both identifying the right set of keywords as well as understanding the competition for your keywords. This will also help you understand the typical budget that you need to run Pay Per Click (PPC) campaigns. On the basis of this information, you can also even adjust the pricing to make sure that you are selling profitably.

5 Reasons to give Amazon PPC a try

Though you have a product that is making pretty decent sales, you might want to consider running PPC campaigns for a variety of reasons. The most common reasons why sellers and vendors run PPC campaigns for their products are listed below.

#1

It boosts sales for a product

Running PPC campaigns is one of the easiest ways to bring in sales. Increasing sales is, of course, the long-term objective of all sellers running PPC campaigns for their products.

#2

Increases the organic ranking of extremely competitive keywords

There might be keywords in your listing which are too competitive to rank in an organic search. Running PPC campaigns for such keywords help to build the visibility. Having the first-page result for those keywords not only bring in sales, but they also increase the organic ranking of your product for the keyword over a period.

#3

To create brand awareness for new product launches

Products that have the most sales are automatically on top of the search results. New products have great difficulty in ranking high for keywords. Low ranks result in fewer sales. Running PPC campaigns is an ideal method by which the product ranks high and also gets an increased sale potential.

#4

To avoid competitors snatching top positions and sales

Over a period, best selling niches and categories see saturation in the number of sellers. Though your product ranks high in organic searches and has good deals, they can be easily outrun by competitors running PPC campaigns for their products. Most top-ranking brands run PPC campaigns to safeguard and retain the top ranks and positions in Amazon searches over competitors who also run PPC.

#5

To increase the visibility of products for seasonal trends

Amazon Sellers see the biggest and the maximum sales during seasonal trends like Christmas, Mother’s day, Halloween, etc. The same goes for the end of season sales and the Q4 quarter. Depending on the product, Amazon Ads can be a great way to generate sales by increased customer interest as a result of seasonality.

Did you know that the top 4 ads on Amazon page get 45% of the clicks?

Adpositions play a massive role in deciding the profitability of PPC campaigns. Often it is the first results; products in the case of Amazon, get the maximum clicks, irrespective of whether they are sponsored or organic results.

 

Amazon Pay per click ad relevance

Amazon Pay per click ad relevance

Ad types in Amazon PPC

There are three main types of ads on Amazon

  1. Sponsored product ads

  2. Headline ads

  3. Product display ads

Sponsored products ads

This type of ads always best friends with conversions and click-throughs. They are the most beneficial ad type as they mimic the organic search results and intermix with them. Sponsored product ads appear below the search results, on the right-hand side of the search results page and product detail pages (sponsored products related to this item section).

Sponsored product ads work well if you have done your keyword research homework and knew the right set of keywords to target.

Headline search ads

Headline search type ads are the keyword targeted cost per click search ads just like sponsored product ads and appear at the top of the 1st page of search results on desktop and mobile. With headline ads, you can show off multiple products at the same time customize the landing destination and the ad copy.

This ad type in Amazon PPC offers the largest range of customization you can decide where everyone who clicks the ad lands. You can choose from your brand pages, product pages, search result pages or a custom URL. You can also choose the text and images shown in the ad.

Product display ads

Amazon Product display ads are product or interest targeted cost per click ads that appear on the related product details page.

Each ad type has its screen placement section, budgets, and differ greatly in the conversion rate and the click-through rates influences.

types of amazon ppc ads

Are you all set to run PPC Campaigns?

There a few things you’ll need to start running Amazon PPC campaigns. Review the checklist below to ensure that you are all set to drive more traffic and bring more sales to your Amazon product.

Basic requirements for running Amazon Ads

  • An active Amazon professional seller account.
  • For Headline Search Ads, enrollment in the Amazon Brand Registry.
  • Products must be new
  • Ability to ship to all US addresses.
  • For Sponsored Products, eligibility for the Buy Box. If you create a Sponsored Products ads for a product listing that is not eligible for the Buy Box, your ad will not display to Amazon shoppers. Headline Search Ads will be shown to shoppers regardless of who is winning the Buy Box.
  • The product must first be considered relevant for that keyword. The keyword is in the product information (for example, in the title, bullet points, etc.)

Factors affecting PPC placements

If there is more than one relevant product for the search term, then you’ll compete for placement. Two factors decide the placement position,

  1. Amazon CPC: The CPC price is the highest a bidder is willing to pay for a keyword.
  2. Quality factor: The quality of Amazon ads is measured by the probability of a customer clicking on it. This takes into account the ad’s applicable click history, as soon as it’s been active for a while.

The higher your Amazon CPC bid, the higher your ad will be placed when you’re competing with advertisements of the same quality. Regarding the quality, the higher the quality of your ads, the lesser you’ll need to bid for your ad to appear in the first position.

Basic Terms used in PPC

Customer Search Terms and Keywords

Though the terms keywords and search terms are used interchangeably, they are two different things when it comes to Amazon PPC.

Search Terms

Amazon search terms are the exact terms that the shopper types in the search box for which your product Ad is displayed. It may be misspelled, out of order or have other words tacked on to it, or conversely, it might be identical to the keyword.

Amazon Keywords

Amazon Keywords allow sellers to decide which customer search terms they want their ads to appear on Amazon. If the seller’s keyword matches the customer’s search term, then the ad will be displayed on Amazon.

Search queries are a broader set than the keywords, and by looking at the search queries, you can identify new keywords to target in your PPC Campaigns. Search Term querying can also be an excellent way to determine negative terms that are eating up your PPC money. Amazon decides whether or not to display your product depending on the keyword and the opted keyword match type.

Refer Amazon PPC Budget terms glossary for understanding all the terms in your Search Term report.

Campaign Types in Amazon PPC

For every product, Amazon offers the option to run automatic campaigns or manual campaigns or both. Automatic campaigns are extremely useful in identifying new keyword opportunities whereas Manual campaigns can offer optimized precision targeting.

Amazon Automatic campaigns

Automatic campaigns are where Amazon makes the decision of displaying your product ads depending on the search terms typed by the shopper. Amazon makes this decision based on the keywords in the product listing page.

Automatic type of campaigns see overwhelming visibility rate, impressions and click-through rate, however, the percentage of sale conversions and revenue generating click-throughs are comparatively lesser. However, this campaigns can uncover keyword opportunities and search terms which might be great sale converters.

Amazon Manual campaigns

Manual campaigns are where the seller defines the exact keywords to be targeted and the search terms for which the product ads must be displayed. This campaigns have an optimized target audience and invite precision clicks. However, the impressions and click-through rates are restricted compared to automatic campaigns.

Manual type campaigns also offer you the choice of matching the keyword types. The keyword match types empower you with the ability to decide between Phrase match, broad match and, exact match.

The basic difference between manual campaigns and automatic campaigns are that manual campaigns are precisely targetted whereas automatic campaigns help you reach a wider audience. Manual campaigns give you the ability to decide your search terms and the bids; they give you greater control over the target keyword. Automatic Campaigns help you understand the search terms used by potential customers. Therefore they require no efforts regarding the keyword research, whereas, manual campaigns require precise efforts in keywords.

Amazon Keyword Match Types

Let’s take this example; the search term is benches. The search intent is quite apparent. However, Amazon displays a “baking tool” as the first sponsored product.

broad keyword match example amazon ppc

Avoid such instances of irrelevant ads by choosing the ‘Keyword Match type.’

With Keyword match type, you can decide when to display your product and, based on the matches of the search term with your keywords. You can choose for an exact search term match, terms padded before and after the search terms, make restrictions on the order of search terms, etc.

For each campaign that lets you choose the keyword type, there are three categories to consider,

Amazon Keyword Match types Differences :

1. Broad Keyword Match

Search terms that not only match your keyword but are also related to your keyword. Your advertisement may display regardless of the order of keywords and also for additional words. This might include synonyms, misspellings, and variations of your keyword.

Pros and cons of Broad Keyword Match

Broad match targets an extensive range of search terms including abbreviations, acronyms, and synonyms:

  1. This usually means higher visibility and sessions for these keywords, as shoppers can use a broader combination of search terms to trigger your ad
  1. Broad match can turn out to be extremely expensive and can drain your money inviting clicks from irrelevant ads and search terms, like the example illustrated above
  2. Broad match is a great way to target more people and get more visibility for your listing

You could run a broad keyword campaign for a specific period, analyze the data and then fine tune the keywords according to the search terms.

2. Phrase Match

The phrase match is where you specify a phrase and the keywords are matched with terms before or after. The critical feature of phrase match is that it allows you to control the word order. Variations may include misspellings, singulars, and plurals, stemming;

Example: skiing gloves, ski gloves, abbreviations, and acronyms.

Pros and Cons of Phrase Match Type

Phrase match displays the ad only when the search term is the same as the keyword, but additional words can be added before or after the keyword

  1. The target group of the ad is a medium range and can be triggered by both short search terms as well as broad search terms
  2. You still enjoy high visibility for your product, however few unnecessary clicks that were generated in the case of broad term match are avoided
  3. This is a good middle ground between broad and exact match, as you have slightly more control over when you ad displays

3. Exact Match

By the exact keyword match, you can narrow down to the customers who are searching exactly for your product. Exact match targeting allows only your exact keyword (plus plurals, singulars, and misspellings) to trigger your ad.

Pros and Cons of Exact Match Type

  1. The target group of the ad is very small yet quite precise.
  2. Exact Match takes a toll on the number of impressions compared to the other ad types as the ad is displayed to people who are typing the exact search term as your keyword.
  3. Exact match is a great way to ensure you get the right clicks and target the audience who are precisely looking for your product.

Amazon PPC Management is a great way to drive in sales. However, it is also a process that requires a lot of research and analysis to pull it off in the right direction. Amazon offers many choices to PPC sellers and campaigns, and if worked in the right direction, Amazon PPC is a great way to make enormous profits.

What should be my Pay Per Click (PPC) campaign strategy?

We recommend a robust – 3 step process to make the most of your Amazon PPC campaigns.

Step 1: Activate Auto Campaign – High Bid

The objective of the “auto campaign – high bid” is to uncover all the keywords that are relevant for your listing across the price range. The recommended values you have to enter for suggested bid rate for keywords is $5.00 with a daily budget of $20.00 and running for 3 days. The typical bid rates are much lower than $5.00 but when you run this campaign for 3 days with $5.00 as the bid rate, you will get a very good understanding about the range of bid prices and the keywords for which people click your keyword.

How to Analyse the search reports

At the outset, our advice is to activate three campaigns. That’s exactly how I do it.

The first campaign is automatic. You can say Amazon: “Hey Amazon, I make an automatic campaign, then Amazon is there and looks at your listing. Then Amazon starts your campaign then all that you have to say is “I pay and so much per click”. Here I recommend, go with a euro in the beginning. You pay only 1 € per click. And to reduce the risk because now you’re saying  I’ll pay 100 € a day at once. You can decide it yourself and say at 20 € ‘This is the end’ as an example. Amazon online marketing gives you this benefit.

The second campaign is: Do you think about which keywords are important to you? What keywords do people search for before they buy your product?

And the third campaign is again one of the things you can do with Google Adwords. Once you’ve set up an account with Google AdWords, you’ll be able to search for specific words in the keyword planner and it’ll also show you other keywords. I think it’s really about mass at the beginning. You want to get as many keywords as possible to see what works. And then it says to wait a week because the data from Amazon are not directly available. Then you can go into the individual campaigns and look exactly through what people have clicked, which keywords made impressions on the user, how many people clicked on it and how many people even ordered. All this keyword data is used to find Amazon hidden keywords. You want to optimize your listing on these keywords that you found. The more keywords you have the better.

I’ll explain the importance of the whole thing. The above process. And how does it work? Through sales, Amazon spins up: when your product sells well to your keyword. Then it gets ranked at Amazon. Because Amazon wants to sell and if your product is the best and people buy your product then your product is also placed above. And that is the ultimate goal. The more you go up in organic searches for your keywords you’ve found out. This is the benefit of Amazon advertising.

The 6th step is very important. Always optimize again. What has changed, are there more keywords, more lists? And with optimization, I do not mean that you should stop the thing! This campaign is increasing that only what you need to optimize, is how much you spend, you need to ensure that the whole is not the Red goes. At least reinstate what they cost. This is the whole secret recipe as you at Amazon good ranks. Because Amazon sees someone searches “Wellies” sees your ad, clicks on it and buys the rubber boots is for Amazon: “Aha!”

The product is just right for someone looking for “rubber boots”. We better take it up!

Pay-per-click advertising (PPC) / Amazon marketing is by far the most successful advertising model on the Internet. The inventor of this advertising model was the US company Goto.com, which later renamed Overture and has been trading as Yahoo Search Marketing since the end of February 2006. But Google’s success led to this advertising model: when Google began advertising in 2000, Google named this ad, AdWords was the breakthrough for the commercial success of the search engines. Today it can be assumed that over 90 percent of Google’s revenues come from these ads.

Even if there are many similarities between search engine optimization and the booking of PPC ads on a superficial view, both marketing activities differ considerably. The most obvious difference for the user is that the PPC ads are marked as advertisements and highlighted in color. From the point of view of the online market, however, the fact that AdWords advertising is paid per click is the most important difference to search engine optimization.

Because search engine optimization initially poses higher requirements, under certain circumstances the complete web appearance has to be completely reworked; if this initial hurdle is taken care of, the following fixed costs remain rather low and the single click is itself “free”.

If you want to draw parallels to off-line marketing, search engine optimization is most likely to be compared with public relations work. In both activities, it is very difficult to predict the possible benefits. This means that a press release can be just as unread as an optimization cannot bring about any improvement in position. PPC ads, on the other hand, correspond to the classic advertising, such as in newspapers or magazines. Here and there you can estimate in advance how many people will consume the advertising message. And from experience, both measures are relatively easy to estimate such as ROI (Return On Invest). For particularly short-term activities, PPC displays are excellently suited.

Within a very short time, with Google often only in a few minutes, the advertisement is activated and immediately on the web to see. And just as quickly, the ads can be stopped again. This makes PPC advertising an ideal advertising form for special activities of online shops.

Amazon PPC Functioning

PPC advertising works on the auction model: Who is willing to pay per visitor at a higher price, will continue to appear within the listed ads above and can gain more visitors. The minimum prices for a booking are usually 0.10 Euro per click; to the top, only the game of supply and demand sets a limit. For particularly popular keywords such as “insurance comparison” or “data rescue”, Google’s advertisers pay more than 10 euros for each click.

The Augsburger search engine agency explido provides on its website a monthly comparison of different keywords. There, not only can the approximate prices for particularly sought-after search queries be determined; the sometimes extreme differences in click prices between PPC providers expect out of this formation.

Pay-per-click or cost-per-click, abbreviated simply PPC or CPC, comes from the English language area. In English, pay-per-click means “pay or cost to click”.

Pay-per-click or PPC has developed in the field of online marketing. Internet pages are provided with advertising banners. For example, on a blog for long-distance travels, you’ll find airline banners or search engines for flight bookings. These advertising banners are operated by companies. As soon as a customer is aware of the advertising, no costs arise. Only when he clicks on the advertising banner and is forwarded to the side of the company does it cost. Behind the system are various ways to operate marketing. Advertising banners can be placed on search engines, blogs, private homepages or company pages. Amazon PPC is based on the same principle.

Again, the dealer has the opportunity to influence. Thus, the product appears at all, the product of the needs keyword are considered relevant. This is because the keyword is contained in the product name, for example. Another requirement is that the product in the Amazon Buy box stands . If these two conditions are fulfilled, the advertisement can be displayed.

If the keyword is relevant to multiple ads, they are in competition with each other to position the items. To solve this conflict, Amazon takes an auction that decides on the ranking. Two factors have an important influence on this auction.

 

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Customer Success Head at SellerApp

Customer success leader with expertise in coordinating between cross-functional teams in product development and strategy, professional services, sales, marketing and content to deliver excellent customer experience and accelerate growth within the company by ensuring clients’ success.

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