The greatest lie is that making money on Amazon is easy. How does one make money by selling on Amazon? You need a great product, reasonably priced, with sound logistics and a solid PPC strategy. The catch is that none of these things is “easy”. We can only talk about the last part and we hope that this post will help you.
When we talk about strategy we are referring to the basic plan of action designed to achieve a long-term or overall aim. Let us assume that the aim is to develop the account and make more money.
We advise writing down what are your goals, how are you going to get there, what is the short/mid/long term plan and so on. This doesn’t have to be a strict template but should include all the components mentioned. If you handle your own ads, these should be your plan of action; if you have an external partner taking care of ads, these should be discussed and agreed to prior to any work.
Time and time again we have seen the importance of clear, concise and mutually agreed upon plans. If you don’t take care of it, they will creep up on you and remind you what you are missing. Trust us.
Metrics – What is your goal?
In the PPC strategy, when we talk about goals, we are referring to data-backed, measurable metrics. After all, we are PPC folks. For overall business goals you can have bold visions and mission statements but PPC is there to translate this into solid figures.
We recommend focusing on the key metrics: Total Ad Spend, Spend as Percentage of Total Revenue (TACoS, RACoS, Real ACoS, whatever you prefer calling it), Total Revenue From Ads, Ads Revenue as Percentage of Total Revenue, Total Overall Revenue (organic + PPC), ACoS, PPC Orders. Free tip: ACoS is NOT the most important metric, in order for you to know which one is, you have to have a strategy which tells you.
Of course, writing down these goals means nothing if you don’t take into account the next component.
Read about PPC trends in 2020 and get started with your own successful PPC strategy.
Time – When do you need to reach it?
When is equally important as what.
Our goals are fine, we know what we want but can we say when? Of course, the whole point is to segment your goal into: three years, year, quarter, month and week. PPC is often overly focused on weekly performance, and no long term plan is thought of. This mistake bars us from contextualizing the development of the account.
We can talk about account maturity but we have to keep in mind that products, portfolios and campaigns have to be monitored and consciously developed through advertising and that no one else is going to care about your account if you don’t.
Account Structure – How do you plan to achieve it?
It is hard to overstate just how important is the account structure to the PPC strategy and the account in general. Well, it is the account. In order to launch new products (or relaunch old ones), expand established ASIN’s, build a defensive structure around our SKU’s or target competitor listings, it is crucial to have an accompanying structure which will enable us to reach our goals. A new account is not the same as a mature one. Time and goals condition the state of the structure, and they work together all the time.
This part is tricky as you need a certain level of knowledge of PPC in order to know why you would settle only for Sponsored Product campaigns or go for Sponsored Brands and Display ads as well. Or how developed your manual campaigns should be. Or how many keywords should an ad group have.
Let us recap
Our PPC strategy should tell us what our aim is (make more money, develop the account). It should have our goals clearly stated (what), organized in a time horizont (when) and an account structure which should follow these two parameters (how). To have one without the other two or two without the one is insufficient. This structure has three cornerstones and each is equally important.
If you like this article, be sure to read ,,5 Amazon advertising tips you should implement in your strategy”
About the author
Stefan is the Account Director at Sellers Alley. He joined the agency 2 years ago and has been engaged in client communication and account management ever since. He has significant experience in the FMCG industry as well as in Corporate communication and was a Business Development manager for a leading regional law firm.