An Amazon PPC strategy is crucial for profitable selling on the highly competitive Amazon platform. If you’ve ever asked yourself how to sell on Amazon without investing in PPC, you should know that it may have been possible ten years ago, but it’s impossible today.
PPC advertising is an inevitable part of every Amazon seller’s business strategy.
What is truly fascinating about Amazon PPC is that pay per click is of utmost importance to conglomerates, big brands, and small and medium-sized business owners on Amazon.
PPC is unequivocally important in all Amazon business (seller account) management phases–during launch, scaling-up, profit-margin optimization, product relaunch, protection from competitors and attack phase, etc. Achieving business KPIs goes hand in hand with running PPC on Amazon.
HOW DOES AMAZON PPC WORK?
Amazon PPC is an auction system in which advertisers bid on keywords. When an Amazon customer performs a search query, Amazon sellers with the highest bids on relevant keywords win the auction, and their products get listed in their chosen placement. Advertisers only pay the bid price if their Amazon ad gets clicked (by CPC) or viewed (by CPM).
This blog post covers the top five questions you should ask yourself before making an Amazon PPC strategy. We’ll summarize what’s on the Amazon PPC checklist and talk about common Amazon PPC mistakes to avoid.
FOR WHICH PRODUCTS SHOULD I RUN AMAZON PPC?
First, make a thorough business analysis of the niche, category, and product you would like to run on Amazon. There are millions of products, and more often, many products are highly competitive within the same category. That would cause many problems in the Amazon PPC strategy that you would like to implement. When you launch your business on Amazon, you shouldn’t run Amazon PPC for all of your products. It’s better to choose the best ones or the ones you want to push from the beginning. There are plenty of external tools, such as Helium 10, that can help you decide for which product to run Amazon PPC.
HOW IMPORTANT ARE COPYWRITING AND DESIGN FOR RUNNING PPC, AND SHOULD I INVEST IN THEM?
They are essential here, as in the whole eCommerce industry and marketing. Top-quality images, headlines, descriptions, and all features that go with listing optimization are crucial for a successful Amazon PPC strategy. Therefore, use all materials in PPC according to Amazon guidelines. Find the best way to use content in Sponsored Brands and Video campaigns.
You can test out campaigns with different logos and headlines but with the exact keywords or product targeting. A/B testing with creatives and texts is an essential part of digital marketing and your Amazon PPC strategy.
WHAT ARE MY KPIS, AND DO I KNOW ALL RELEVANT METRICS?
Many metrics are relevant in Amazon PPC. First but not the most important is ACoS.
Still, many sellers are trapped in catching the perfect ACoS while neglecting the importance of other metrics. True ACoS is as essential as ACoS and is the ratio of Ad Spend to Total Revenue. In that way, you can view the total percentage of advertising costs in total revenue, among all costs, to make a better calculation.
You can even calculate True ACoS for every active product (ASIN) you are advertising. Conversion rate is a metric that should be followed in all campaigns and search terms to prove the relevancy of the number of orders in PPC clicks. CTR, CPC, CPA, and many other calculated metrics are relevant for running Amazon PPC.
Set up your short and long-term KPIs as a combination of all the metrics mentioned above. Depending on the period of the year, your KPIs will change. For example, if we are at a shopping peak during Q4 and Prime Day, your main KPIs will be Total Revenue and Ad Sales, while others will be a low priority. During the low season in summer and after Q4 and Prime Day, your main KPI should be profitability–lowering ACoS, True ACoS, CPC, and CPA while increasing conversion rate.
DO I KNOW HOW TO USE THE DATA PROPERLY?
Amazon PPC is data marketing, as the main PPC effort is made in the backend through bulk files, advertising reports, new features in Campaign manager, etc. Numerous reports can help you run Amazon PPC as a professional, and you can make all significant changes through bulk files. Continuous and consistent advertising reports usage is essential to run your Amazon PPC advertising. Below are the examples of advertising reports from the Campaign Manager.
Search terms can give you an overview of what is converting and what is irrelevant to your products. The advertised product can provide you with actual sales, spending, and many other metrics by advertised ASIN and SKU. Placement and Purchased reports are beneficial as well. If you don’t have the time and the knowledge to use this data, we suggest you hire us to manage your Amazon account and help you obtain precious data from reports!
SHOULD I SCALE UP AND PUSH RANKING OR TAKE CARE OF MARGINS AND PROFITABILITY?
It depends on your current phase, as each strategy has its steps and stages. You should go through proper stages in your Amazon PPC strategy, skipping none of them. The first step in PPC can be a challenge–scaling up and taking a position in front of competitors.
That would get your ACoS higher than the targeted one. Along with heavy bidding in the first several weeks, promotions are more than beneficial for your products because you need to collect at least ten reviews of the main products you advertise. More reviews will bring you higher relevancy regarding customer’s position on Amazon while searching to buy a product.
COMMON AMAZON PPC MISTAKES
Your first few months might be challenging, but eventually, you will get familiar with the Amazon marketplace ins and outs. However, it is better to be safe than sorry, so here are the newbie mistakes to avoid when launching a product on Amazon:
Choosing the wrong product to sell. A product with low demand and high competition won’t make any sales. Moreover, if Amazon prohibits that product type, all your efforts will go to waste.
Not testing the product thoroughly. Amazon has strict guidelines about packaging and prep requirements.
Having insufficient advertising budget. As a first-time seller, you might be hesitant to go full blast, like setting a higher discount or giving away too many units.
Targeting the wrong keyword. Your product may be the best, but your keyword isn’t relevant to your product.
Setting keyword and product targeting bids below the suggested/market level, and your keywords and campaigns are not delivering.
Misusing PPC data. There are different reports and new features inside Campaign Manager that you did not use properly, and you missed a chance to gain profit and scale up.
Preparation is everything in running PPC on Amazon! Organize and prepare your business plan, money, time, patience, tools, and products to have a successful Amazon PPC strategy. The five questions and detailed answers above can help you along the journey to eCommerce success! Keep in mind that PPC influences mainly overall sales and organic sales.
Structure your campaigns, prepare high-quality creatives and texts for your products, perform A/B testing, track relevant metrics, and be sure to avoid the common PPC mistakes.
We have a great team of PPC specialists who can help you achieve faster and better results on Amazon with a tailor-made Amazon PPC strategy. If you want to increase your sales and get ahead of your competitors, book a FREE Amazon Audit today!
About the author
Vukašin Mihailović is a Data Analyst at Sellers Alley with extensive experience in PPC and inbound marketing. More than 4 years in digital advertising. Very familiar with all relevant digital tools for advertising. DIMAQ certified. Amazon PPC passionate.