Almost all online platforms offer advertisements in the form of external and internal. External meaning paid advertisement by the brand or seller and internal meaning by the online platform itself. On Amazon, there are different forms of advertisement, but the concept is quite the same.
For those of you who are not familiar with Amazon ads, they are often referred to as Pay Per Click (PPC) or sponsored ads. Sponsored ads appear in highly visible areas when buyers search for products similar to yours. The reason why sponsored ads are often referred to as PPC is because it is a Pay Per Click program which means you are only charged when a shopper clicks on your sponsored ad.
We are often asked questions as to how we run PPC internally, so now for the first time, we are going to cover some of our tips that companies and agencies of all sizes can use to run effective sponsored ads.
Note: This blog offers quick tips for PPC and a lot of these are high-level tips, so be sure to take notes as you read through our steps.
First, we want to be clear, if you are using Pay Per Click to only increase your sales, you are using PPC for the wrong reasons or you have a lot of money and time to waste. For you to better understand what we mean, let’s compare the difference between Amazon & Google.
Google – an online search engine: Whoever will pay the most via ads wins the ad slot.
Amazon – an online marketplace: Whoever generates transactions for that keyword wins page one rankings.
The difference is that Google generates revenue through ads, and Amazon generates revenue through transactions. In other words, Google does not care if your ads convert, but Amazon does. This is because, in order for them to make the most for their buck, you also need to generate a transaction.
So why is PPC on Amazon important for brands of all sizes and how can you use our tips?
Note: The following tips are for brand sellers, not resellers.
Tip #1: Increase Rankings: In order to increase rankings you need a combination of strategies. One of them being PPC.
Step 1: Setup a testing campaign via broad match type. Your goal here is to let Amazon shoppers tell you what keywords or phrases they use to search for your product or brand. After your testing campaign, review your search term report.
Step 2: Using the highly relatable keywords found in your search term report, setup a phrase match testing campaign. Your goal here is to prove that those keywords and phrases are actually relatable. During this step, you are measuring impressions and conversion.
Step 3: Once you’ve completed one to three weeks of testing and have noticed a solid amount of sales generated from your selected keywords, the next step is to setup an exact match campaign. Using the exact match type, you are telling Amazon to display your ads to anyone who is using those exact words while searching for a product.
Note: Remember, Amazon’s algorithm has one job and that is to display as many products that will generate transactions. When you are using steps 1 – 3, Amazon’s algorithm will start to associate those keywords with your product listing as more shoppers convert. Over time, you will start to increase in rankings.
Tip #2: Adjust Bids by Placement (Formally Bid+): Adjusting bids by placement allows Amazon to increase the maximum keyword bid in a campaign by up to 900%, but only when ads are eligible to show in the top of search results.
Note: To ensure you don’t overspend, our best practice is to increase bids by at max 50%.
So, when do you adjust bids by placement? This should be used for products that are performing poorly via PPC or when a product fails to rank quickly. However, in order to use this tip for low performing products, you should go with a low bid option. In doing so, you’re only going to bid standard when the highest chance of a sale is determined by the algorithm.
Step 1: Determine your low performing products and most relevant keywords. Then, review the level of competition per keyword. If you are not sure how to do this, just remember that the keyword with the highest volume will likely cost the most and low volume keywords will cost the least. To save your ad spend, the best option is to find a happy medium.
Step 2: Setup phrase or exact match types with lower bids. If you are not sure what a lower bid might be, play it safe using the average bid amount “what Amazon tells you” and reduce spend by 50%. If you are more advanced, determine your CPC and decrease your bid by ten to thirty cents.
Note: Over time, when using a low bid strategy with bid adjustments, you are saving money and protecting your cost of advertising. Also, the keywords that you deemed too expensive will start to become profitable as time goes on and when sales generate overtime you will also rank.
Our software allows brands to automatically adjust bids in real time to properly utilize your budget and appear in the buy box whenever possible. Contact us today to learn more!
Tip #3: Negative Keywords Say NO to Amazon: Negative keywords are words or phrases that generate clicks but fail to convert. They can also be keywords that are highly unrelated to your product. Traditionally this happens with automatic campaigns.
As a rule of thumb: ONLY focus on keywords that generate sales and clicks. If the keyword does not work, move on and focus your time on the ones that do work.
Step1: Review your audit reports for non-relatable keywords and negative exact match them in the correct campaign.
Step2: Filter the click-through rate (CTR) to under 2% and look for keywords that are high spend with no return and negative exact match them.
Step 3: Filter the click-through rate (CTR) to above 2% and again look for the keywords that are high spend with no sales and negative exact match them.
Step 4: Review the keywords with a negative net profit and negative exact match them.
Note: In some cases, keywords that are highly broad, but highly relatable, will need a low bid opposed to a negative exact match so use your best judgment.
Tip #4: Keyword Match To Outsell Your Resellers: Currently, keyword tracking and ranking are done on an ASIN by ASIN level. However, most people do not realize that each seller on Amazon has the ability to rank for a keyword as well. Although this is not yet a measurable metric, there are steps a brand can do to ensure they receive most of the sales generated on a listing.
Step 1: Select the listings that have the most resellers.
Step 2: Review all keywords associated with the front end of the listing and add them to a spreadsheet.
Step 3: Review product name keywords as well as highly related keywords and add them to a spreadsheet.
Step 4: Using keyword research, determine which keywords would generate the most sales. Typically, this can be determined by total search volume.
Step 5: Setup phrase campaigns for each product and input all relevant keywords from your spreadsheet.
Step 6: Set your bid to 20% higher than the average bid.
Note: This tip can be used for more than to only outsell resellers.
Note: Following these steps will increase the chances of you appearing in the ad slot, as well as increases the chances of you winning the buy box for that particular keyword.
For more information on how to outsell your resellers, contact us today!
Tip #5 Low Bid To Maintain Sales: Even though you’re appearing organically on the first page for some customer search terms, still run PPC on those terms to reinforce your organic rank. This is done by decreasing your bid down to $0.10 or the lowest amount that still ensures clicks and sales.
Tip #6: Using Headline Ads: Headline ads are a great way to increase conversion on Amazon.
- Use Headline Ads to direct customers to your storefront to increase impressions and sales on your Amazon store.
- Run PPC on direct competitors’ search terms to appear and potentially steal their customers.
- Run two testing campaigns (HSA or SP) on the same product with different search terms and see which one is converting more.
Tip #7: Best Practices & Ongoing Maintenance
- Never run two campaigns with one product with the same search terms because you’re just competing against yourself.
Always continue to optimize and adjust your campaigns until your ACOS is 20% and below.
- Note: Your ideal ACOS might be less than 20% based on your COGS.
- Find your top 5 products and run a campaign with very broad terms and high bids to drive even more traffic to those listings.
In case you want to dominate the Amazon marketplace today, get in touch with us. Our software solutions can automate your operations, making your life easier, and profits healthier.