Fundamentals of Amazon PPC Terms – Glossary
Before we get into the nitty-gritty details of Amazon PPC and SellerApp PPC Manager, let’s double check that we are thorough of all the Amazon PPC terms in the Search Term Report just to make sure we are on the same page and understand Amazon PPC and its working in a better way.
Amazon PPC Terminologies
Getting a thorough understanding of Amazon PPC terms could, of course, take some time, however, brush up through the basic Amazon PPC and SellerApp PPC terminologies we’ll encounter throughout this guide.
* Bookmark this tab, so that you can refer back upon stumbling on PPC terms that seem greek to you!
We’ll first learn terms you’ll come across while setting up the Ads
The highest level in the hierarchy of Amazon Ads, campaigns are where you will set the details for your PPC campaigns - the organization of the Ads and the targeting.
Campaigns are of two types - Automatic Campaigns and Manual Campaigns.
Amazon will automatically choose the keywords for you to target based on your product listing information such as the title, bullet points, description, and keyword search terms. You will still control the bid price and daily budget but all of the keywords will be chosen by Amazon.
With manual campaigns, the seller chooses the keywords to be targeted in the ads. There are a couple of options on how to target these keywords - which are called the Match Types on Amazon.
The match types map the instances for on which the ad is shown providing you the capability to restrict ads only for the best buyer audience.
Other than specifying the keywords for the campaign, Amazon also lets you match the different types of searches. You can decide to display your product ad based on the matches of the search term with your keywords for exact search term match, terms are padded before and after the search terms, make restrictions on the order in which the search terms are displayed, etc.
Learn more about Amazon Keyword Match Types
The keyword bids are the maximum cost you are willing to pay when someone clicks your ad. Manual Campaigns require you to bid separately per keyword, while on automatic campaigns you specify the default bid. The default bid is the maximum cost-per-click for every ad from this ad group.
Post creating an ad, you’ll see quite a number of data points associated with each ad instance, those terms are explained below,
The number of times your product ad was displayed, for a search query that matched the keywords you are running ads for. Sellers only pay for ads only when a customer clicks on your ad not for the number of impressions or for running the ads.
The number of times shoppers clicked on your product ad to view the complete product detail page.
CTR - Click Through Rate
Expanded as Click through Rate, is the ratio of the Impressions versus the clicks, ie the number of times your advertisement was clicked by a shopper, for each time your ad was displayed.
Average Cost per Click
The average amount you’ve been charged for your Amazon product ad. Average cost-per-click (Avg. CPC) is calculated by dividing the total cost of your clicks by the total number of clicks.
The average amount that you’ve been charged for a click on your ad. Your average CPC is based on your actual keyword bid / maximum cost per click. The average CPC might be different than your maximum cost-per-click (max. CPC), which is the highest amount that you’re willing to pay for a click.
Here’s an example of how Amazon calculates your average CPC.
Let's say a keyword is bid at $1, and the ad gets two clicks, one costing $0.20 the other costing $0.40.
The Total Cost per Click is $0.60.Divide $0.60 (the total cost) by 2 (your total number of clicks) to get an average CPC of $0.30.
If you are just getting started and want to get an idea of the average amount you might be charged for a click? You can use Keyword Planner to get estimated average CPC of keywords for your Sponsored Campaigns.
Expanded as Advertising Cost of Sales, ACoS is the ratio of ad spend to the sales conversion generated from the ads.
ACoS = ad spends ÷ sales
Calculate ACos Value with this free pro tool
When looking at your ACoS inside SellerApp PPC Analyzer or Seller Central, you can look at your ACoS on the campaign level and your overall ACoS for all campaigns.
The amount of money you have spent on advertising for the keyword.
The SKU or product that was associated with the original advert that was clicked.
A user has clicked on an advert for one of your SKU’s but then purchased another of your SKU’s. e.g if your selling blue and red shirts if a user clicks on an advert for a redshirt but purchases a blue shirt, this is classed as “Other SKU”.
The conversion rate is the number of people who visited your listing versus the number of people who purchased your product.
The first day of impression, Last day of impression
The date range is the first time and last time that search term got an impression for that keyword in that ad group.
The target ACoS is the basis on which SellerApp’s PPC algorithms populate keyword data on your dashboard.
By default, the target ACoS is set as 30% for all the campaigns for the highest profitability. However, it is advised to change your Target ACoS according to your PPC goals.
Setting up the right Target ACoS for your campaigns
Each campaign could have a different target ACoS depending upon the goal of running the campaign, whether you are running the campaign for a launch, scalability or for profitability.
In the next article, we’ll learn the more about ACoS and the framework of setting up Target ACoS the Break Even ASoS that translates to tracking for profits.