Why is Amazon advertising important?

Amazon had 2.2 billion organic traffic as of April 2023, according to Statista.

With the majority of customers shifting their shopping activities online, e-commerce giants like Amazon and its sellers have immense opportunities to grow their profits. However, the competitiveness of the marketplace also brings the problem of visibility.

As Amazon is a retail platform, people come here to make a purchase, but 45% of people have said if they don’t find you on the first page they won’t scroll.

So Amazon PPC ads enhance your chance of visibility to your customers by bringing your product to the top of the search result page instead of being buried amongst all other competitors.

Using PPC ads can lead to more sales and, in turn, improve the organic ranking of the product on Amazon for each well-performing keyword. Sales velocity is a vital factor that Amazon’s A9 search algorithm looks for, and by utilising advertising such as PPC ads, you can increase your sales velocity.

What is Amazon PPC Advertising?

Similar to Google, pay-per-click advertising allows you to place ads next to relevant search results on Amazon. When someone searches for something specific on the platform, your ad will appear in the search results.

Pay-per-click means that when someone clicks on your ad, you pay for that click. PPC ads are perfect for sellers who want to reach more customers on Amazon and are more commonly used by professional sellers and brand-registered sellers.

Types of Amazon PPC Campaigns

• Sponsored Product Ads: Crafted to elevate the visibility of individual products, these ads are tailored to appear alongside organic search results.
• Sponsored Brand Ads: Designed to enhance brand recognition, these ads showcase a brand’s logo, a curated selection of products, and a captivating tagline.
• Sponsored Display Ads: Capitalising on the power of product targeting, these ads extend beyond Amazon’s confines, reaching potential customers even as they explore the broader web.

 
Important to note: If you’re a Brand Registered seller, you also get access to Amazon Stores, Amazon Attribution, and Amazon Live as part of Amazon Advertising.
 

Amazon PPC Key Terms and metrics to track

• Advertising cost of sales (ACoS): ACoS measures the efficiency of an Amazon PPC campaign and is the ratio of attributed ad spend to ad revenue. Let’s say you spend £15 on ads and get £30 attributed sales your ACoS will be (15/30)*100=50%
• Impressions: the number of times your PPC ad is shown to shoppers regardless if they click on it or not
• Clicks: The number of times a buyer clicks on the ad
• Click-through rate (CTR): CTR is the ratio of clicks to impressions for an ad. If your ad gets 200 impressions, and only two buyers click on the ad, your CTR will be (2/200)*100=2%
• Cost Per Click (CPC): This is the amount sellers pay to Amazon when a shopper clicks on the ad. This can range from £0.05 up to £10. This depends on what category you are selling in as some are highly competitive, which means your CPC will likely be high.
• Attributed Sales: The total amount of sales that your ads generate within a period of time from the clicks on your ad. The sales data can up to 48 days to show on the report.

 
Ok, now you know what Amazon PPC ads are available and what each key term and metric is, it’s time to get into boosting your ad campaign performance.

How to set up your Amazon PPC Campaign for success?

The road to success requires planning and strategy! Don’t worry, we’re here to help with that with these Amazon PPC checklists to boost your ad campaign performance.

Pre-campaign preparation

1. Keyword Research and Analysis

Using the keyword research tool on the Amazon Ads platform, identify your high-converting keywords to use in your campaign and your long-tail keywords for more niche targeting.

You can also analyse your competitors’ product listings and PPC campaigns to see what is working for them and consider testing similar keywords in your own campaigns.

2. Add negative keywords

Negative keywords in Amazon advertising are words or phrases that you don’t want your ads to show up on. By adding negative keywords, irrelevant traffic is filtered out, which improves the quality of your ads and boosts your campaign performance.

The great this is that you can add negative keywords at the campaign level, so this applies to all ad groups, particularly beneficial for setting negative keywords for the entire PPC campaign.

You can add a negative exact match or negative phrase match to your PPC campaign.

Here’s how you do it:
1. Log into your Amazon Seller Central Account
2. Click on the Advertising Tab
3. Select Campaign Manager
5. Click on the Negative Keywords tab.
7. Click Add Keywords and Save.
 
3. Set clear campaign PPC goals to track

How do you know what to monitor and what success looks like if you don’t set clear campaign goals? This is an important first step! Set different campaign KPIs so you can monitor your goals which helps to boost your ad campaign.

These goals could be hitting ACoS targets, converting new customers, or launching a product.

However, do have a think about the key business goals as having these goals will then help you think about your actions. Say your business goals are:

• Building brand awareness: You might want to focus your PPC efforts on targeting high-volume keywords
• Improving long profitability: You might want to focus on retargeting customers and driving traffic to high-converting products.

4. Amazon PPC Budget Planning and Allocation

The magic ‘B’ word – budget! This is so important to understand your overall Amazon marketing budget so you can effectively spread across your different ads.

You have two types of budgets you can set can set:
 

• • Fixed daily account budget

When you set up your advertising campaign, you have the option to set a fixed daily budget for each day. This applies to your entire advertising account. The fixed daily budget determines how much you can spend each day. The amount is set for all of your budgets so if you have a cap on your PPC ads of £400 per day, then your ads will stop running once this has been met. This gives you much more control over your budget.

• Average daily budget for individual campaigns

The second type of budget you can set is the average daily budget for individual campaigns. This is the maximum daily budget you’re willing to spend for each campaign. You work out the average daily budget you are willing to spend and multiply it by the number of days that are left in the calendar month and this gives you your maximum budget for the whole month.

If your budget is not spent in one day, it will roll over onto the next so you will have an extra budget. It ensures there is a balance between your budget and spending. You set the campaign amount you want to spend and your money flexibly changes based on your daily ad performance.

Campaign preparation

1. Create your campaign structure

A well-structured campaign will help massively when it comes to monitoring and reporting, and you will thank yourself when you are at this stage!

Use your campaign goals to match them to the different ad types, and group ads together under the same campaign goal.

Your campaign name should include the Campaign Goal, Product / Category, Campaign Type and Campaign targeting.

2. Create visually appealing ads

We also see an opportunity to stress this point whenever we can, if your ad includes images make sure it’s high-quality, and your product is clearly visible.

Make sure to include your keywords in your ad copy and craft catchy titles to capture attention. Remember you can always A/B test so create as many as you can!

Where applicable, include videos too but again follow the same rules as images – high-quality and clear shots of the products. The easier you make it on the customer the better.

3. Define your bid strategy

Now you will be defining what your bid strategy will be – you can choose between automatic and manual targeting.
Manual Bidding

• • Fixed Bids: With this approach, you manually set a specific bid amount for each keyword or product target in your campaign. It provides maximum control but requires ongoing monitoring and adjustment.
  • Dynamic Bids (Down Only): Amazon allows you to set a maximum bid, and the platform automatically lowers your bid when it believes a click is less likely to result in a sale. This can help control costs.
  • Dynamic Bids (Up and Down): This strategy allows Amazon to adjust your bids both up and down based on the likelihood of conversion. It’s useful for maximising sales and targeting a specific ACoS (Advertising Cost of Sales) range.

Automatic Bidding

• • Amazon’s Targeting Options: Amazon provides automated bidding options like “Dynamic Bidding – Down Only and “Dynamic Bidding – Up and Down” which use machine learning algorithms to adjust bids based on conversion probability. These options simplify bidding management but may require careful monitoring to ensure efficiency.
  • Portfolio Bidding: Amazon offers portfolio-level bidding where you set target ACoS or ROAS (Return on Ad Spend) goals, and Amazon’s algorithms adjust bids across multiple campaigns to meet those targets.

Aside from these two bidding options for your campaigns, you can also manage your bids in other areas:

• Enhanced Brand Content (EBC) and Sponsored Brand Ads: These ad formats allow for bidding on keywords related to your brand, which can help improve brand visibility and recognition on Amazon.
• Placement Bids: If you’re running Sponsored Display or Sponsored Products campaigns, you can set specific bids for product placements on Amazon, including top-of-search, rest-of-search, and product detail pages.
• Competitor Bidding: In some cases, you might increase bids on keywords or products that your competitors are targeting to improve your ad’s visibility in response to their ads.

How to optimise Amazon PPC campaigns?

You’ve launched your ads – great! Now is the time to monitor them closely and adjust if needed. We’ve exclusively pulled together this Amazon PPC Optimisation checklist for you to use to boost your ad campaign performance, created by our team of experts!

Daily Monitoring

Check-in to monitor performance

For day-to-day, we typically perform deep dives to identify any anomalies and locate the cause, take action and improve performance. We also investigate whenever we spot any significant drops or peaks in revenue or any other KPIs.

Bid optimisation

To optimise your bid, we use tools like Fern to reduce wasted ad spend by decreasing bids for high-click non-converting targets. This helps us improve profitability by decreasing bids for targets that are performing unprofitably and growing revenue by increasing bids for targets that are generating sales at profitable ACoS.

Weekly Monitoring

Budget optimisation

Once a week we allocate ad spending in the most efficient way to push campaigns that are performing profitably and lower budgets for unprofitable campaigns. We use Fern to help with budget pacing throughout the month to ensure performance within a set monthly budget cap.

Ongoing weekly performance check

We will check our weekly performance against our campaign targets and also our month-to-date performance. Then we look at the main metrics ad spend, ad revenue, overall revenue, ACOS and TACOS and take actions to work towards these targets.

Bi-weekly monitoring

Search Term optimisation

This requires targeting new converting customer search terms as keywords and new converting competitor ASINS in manual campaigns to expand reach, target new audiences/niches and grow revenue.

We cut off any unrelated or underperforming traffic to avoid wasting ad spend. Fern offers a flexible solution to create custom keyword harvesting rules which helps us with this process.

Monthly Monitoring

At the end of the month, we review the monthly performance against targets much like the ongoing weekly check-ins, we look at the main metrics ad spend, ad revenue, overall revenue, ACoS and TACoS and take actions to work towards these targets.

Our thoughts

Optimising your Amazon PPC campaigns is a critical step in achieving success in the highly competitive e-commerce landscape. With the vast number of potential customers on Amazon, effective PPC advertising can significantly boost your product’s visibility and sales.

Utilising a checklist for your campaigns ensures that you establish a process for success! We recommend using what we have outlined above for pre-campaign, monitoring and reporting so that you can effectively manage your PPC campaign performance while making changes to optimise and boost your ads.

Need our help?

Sitting there thinking – how the heck do I implement these strategies? Or perhaps you are thirsty for more expert-level strategies to boost your ad campaign performance? Well, drop us a message or give us a call and we will spill the tea.

Who are we?

This is Unicorn is an Amazon full service marketing agency. Brands come to us to help them launch and/or grow their business on Amazon.

This is Unicorn work with some of the most innovative and recognisable brands. We create their strategy, develop their marketplaces, support their growth, work with their vendors and manage their spend.

We have frequently been referred to by those who work with us and know us best as an extension of their own team. And we love it!