Amazon PPC Ads Optimization: Complete Guide for Sellers 2024

Amazon PPC stands as a pivotal tool for sellers aiming to boost product visibility and sales. Mastering Amazon PPC is not merely an option but a necessity for sellers looking to thrive in the competitive marketplace. This blog will delve into the intricacies of Amazon PPC, offering step-by-step guidance on setting up campaigns, optimizing ad performance, and monitoring metrics to drive success.

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What is Amazon PPC and How it works?

Amazon PPC (Pay-Per-Click) is a type of advertising where sellers pay for their products to appear in Amazon search results and on product pages. Sellers bid on keywords, and when a shopper clicks on their ad, the seller pays a fee.

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Sponsored Products Ads

Imagine your product appearing at the top of search results or alongside similar browsing choices. Sponsored Products make this a reality. You bid on relevant keywords, and your product ads appear in high-visibility placements when shoppers search for those terms. This is a golden opportunity to:

• Increase product discovery: Get your product noticed by potential customers actively searching for what you offer.
• Drive targeted traffic: Attract high-intent shoppers who are already interested in similar products.
• Boost sales: By grabbing attention and driving qualified traffic, you're more likely to convert browsers into buyers.

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Where are Sponsored Products Ads displayed?

Keep an eye out for these prime spots:

• Search results pages: Your ad appears directly within the search results, competing for top of search placement or rest of search placement based on your bid and other factors.
• Product detail pages: Shoppers browsing similar products might see your ad displayed alongside them, prompting them to consider yours as well.

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How does Sponsored Products look like?

They feature a product image, title, price, and a "Sponsored" tag to differentiate them from organic search results. These ads are designed to blend seamlessly into the Amazon shopping experience.

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Sponsored Products Ads Optimization Strategy

On Amazon, sellers can choose between automatic and manual ads to promote their products. Automatic ads are managed and optimized by Amazon's system. From selecting keywords and targeting products, Amazon managed by themselves. In contrast, manual ads allow sellers to choose keywords and targeting based on their product features, target audience, and competition. Here's a suggested strategy for allocating budgets and optimizing your automatic, manual, and keyword ads effectively.

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1. Automatic Product Ads: 20% of Budget

The goal of automatic ads is to verify relevance and build traffic. Initially, you can bid at the price that Amazon system remcommended.

Or you can set up three campaigns with minimum, recommended, and maximum suggested bids. By running these three campaigns simultaneously, you can see which bid level performs the best. This is a form of A/B testing where you compare different bid strategies to find the most effective one

After running these campaigns for a while, you can analyze the performance data to identify which bid level yields the best return on investment (ROI).

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2. Manual Keyword Ads: 50% of Budget

Manual keyword ads are used for keyword expansion and are categorized into broad keyword ads, core keyword ads, and long-tail keyword ads.

• Bid on Broad Keywords: They are ideal for a low-budget, low-bid approach. This type of ad helps filter out irrelevant search queries, ensuring your ads remain relevant to your target audience. Broad keyword ads are commonly used to increase traffic or promote product listings ahead of peak seasons.
• Bid on Core Keywords: In highly competitive categories, launching campaigns with broad keywords may lead to poor conversion rates, especially for new products. Instead, it's more effective to initially utilize core keywords to attract organic traffic. Once established, you can then use broad keyword strategies.
• Bid on Long-Tail Keywords:  At the start of your ad campaign or after running it for a while, make sure to focus on the most effective long-tail keywords that you have identified. ****These ads are often run as separate campaigns to ensure top positions in search results to improve ad visibility and click-through rates. This strategy is effective for attracting an audience with specific needs and increasing ad conversion rates.

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3. Manual ASIN Targeting: 20% of Budget

Manual ASIN targeting is suitable for targeting listings of similar products with slightly higher traffic, particularly those with a lower value proposition compared to your own offerings. You can gradually increase the targeting of ASINs belonging to listings of similar products sold by competitors.

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4. Sponsored Product Category Ads: 10% of Budget

Sponsored Product category ads are another crucial ad type. Although they have a smaller budget allocation, they are highly effective. By running SP category ads, you can significantly boost your product's exposure and sales within specific categories.

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Sponsored Brands Ads

Sponsored Brands campaigns are ideal for brands looking to increase their visibility, drive brand awareness, and promote multiple products or product lines on Amazon.

These campaigns allow advertisers to create custom ad creatives featuring a headline, logo, and a selection of products. It’s perfect for brand storytelling and highlighting key offerings. Whether you're launching a new product line, promoting seasonal offers, or looking to establish your brand presence, Sponsored Brands ads offer a versatile and impactful advertising solution.

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Sponsored Brand ads 3 Formats

Sponsored Brands Ads come in three compelling formats: Product Collection Ads, Store Spotlight Ads, and Video Ads.

• Product Collection Ads: These ads allow brands to showcase a curated selection of products directly within their Sponsored Brands campaigns. With Product Collection Ads, brands can highlight their best-selling or newest products, enticing shoppers to explore their offerings further.
• Store Spotlight Ads: With Store Spotlight Ads, brands can drive traffic to their Amazon Storefront by featuring their brand logo and a custom headline. These ads are an effective way to increase brand visibility and promote brand awareness among shoppers.
• Video Ads: Video Ads enable brands to capture shoppers' attention with engaging video content.

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Sponsored Brands Ads Optimization Strategy

Sponsored brand advertising and brand video advertising serve as pivotal tools for boosting product exposure and sales. Proper positioning and optimization are paramount.

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How to Optimize Sponsored Brand Ads？

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Aim at High-Performing Keywords

‍Choose 2-5 core keywords with high performance that have relatively low click costs and bring effective exposure and sales to your brand. Make full use of Amazon Search Term Report to discover more relevant and moderately competitive target keywords. In the first 2-4 weeks, you can invest more to further boost the exposure of these keywords and increase brand's presence in relevant search results.

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Link to Your Brand’s Storefront Page

‍Direct the ad links straight to your brand's storefront page, allowing users to land on the primary display page of your brand immediately. Storefront pages typically showcase a brand's product line, brand story, promotional activities, etc.. It can effectively enhance overall brand awareness and trust among users.

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For Sellers Without a Storefront

‍For sellers who have not built their storefront and lack of a complete brand page, it's preferable to link the ads to the product page. By directing the ad links to the product listing page, users can directly browse the core products of the brands.

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Optimize Videos Content to Attract Clicks

‍Produce high-quality, attention-grabbing ad creative materials, including eye-catching headlines, clear product images, and concise description copies to attract user clicks. Emphasize the product's unique selling points and advantages, tailoring them to align with the interests and needs of your target audience. This approach will enhance the attractiveness and relevance of your ad materials through creative design.

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Advantages and Strategies of Brand Video Advertising

Brand video advertising has become a crucial step for Amazon sellers to achieve success in 2024. To seize this opportunity, it's essential to ensure well-crafted video content. Consider outsourcing professional services for shooting and production to ensure video quality. If budget is limited, you can also opt for slideshow-style videos, but regardless of the approach, ensure that the video conveys sufficient information and is attractive. Amazon offers a self-service video production tool called "Amazon Video Shorts," which allows sellers to easily create short video ads. Through Amazon Video Shorts, sellers can choose preset templates or customize designs according to their brand image and advertising needs to create videos.

Basically, Amazon brand video advertising involves three main aspects: keyword targeting, product targeting, and category targeting. Here's an explanation and additional details on these strategies:

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Keyword Targeting

• Organize Key Selling Points and Brand Keywords: Carefully bid on keywords that accurately reflect your product's key selling points and brand characteristics.
• Avoid Using the Same Video for Multiple Keywords: Each video ad should focus on a specific keyword to ensure precision and effectiveness. Using one video to target multiple keywords can dilute the ad's impact.
• Create Videos Around Bid Keywords: The content of the video should be closely tied to the keywords you are bidding on, enhancing the relevance and increasing click-through and conversion rates. The video should highlight the product’s core selling points and make them resonate with the targeted keyword.

Additional TIps:

• Keyword Research: Conduct thorough keyword research to identify the most promising keywords. This can be done by analyzing competitors, using keyword research tools, and referencing Amazon's search suggestions.
• A/B Testing: Experiment with different keyword and video combinations through A/B testing to determine the most effective pairings, and continuously optimize your ad strategy.

Product Targeting

• Expand Related Traffic: Video ads should not only attract your existing target audience but also draw in potential customers through related products and content. The ad content should showcase unique selling points that are superior to or complement your competitors' products.
• Create a Closed Loop: Ensure every step of the ad process effectively guides users from clicking the ad to making a purchase, achieving closed-loop marketing. The video content should include strong calls-to-action (CTAs) like “Buy Now” or “Learn More.”

Additional Tips:

• Differentiated Selling Points: Clearly demonstrate the product's differences compared to competitors, emphasizing advantages in quality, functionality, price, or other features.
• Customer Feedback and Use Cases: Incorporate customer reviews and real-world usage scenarios in the video to enhance the product's credibility and appeal.

Category Targeting

• Recommend Categories Based on Product Range: The ad categories should align with the variety and diversity of products in your store. If your store offers a wide range of products, consider advertising in multiple relevant categories.
• Landing Page Selection Determines Ad Category: The choice of the landing page is crucial as it impacts the conversion rate of the ad. Ensure the landing page is consistent with the ad content and provides a good user experience.

Additional Tips:

• Optimize Landing Pages: Landing pages should be clear and concise, highlighting the main selling points from the ad and ensuring users can quickly find the information they are interested in, with a clear path to purchase.
• Category Expansion Strategy: Identify new potential categories through sales data and market trends, and conduct test campaigns to explore new market opportunities.

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Sponsored Display Ads

Sponsored Display campaigns are well-suited for advertisers looking to retarget and engage with audiences who have shown interest in their products or similar products on Amazon. These campaigns allow advertisers to target shoppers based on their browsing behavior, purchase history, and interactions with product listings. Whether you're looking to retarget past visitors, reach new audiences, or promote complementary products, Sponsored Display campaigns offer a versatile and targeted advertising solution.

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Where are Sponsored Display ads displayed?

Sponsored Display ads are displayed across various touchpoints on and off the Amazon platform.

• On Amazon:
  • Search Results Page: Ads appear at the top or on the side of the search results.
  • Product Detail Page: Ads are displayed below the product images, under the product description, or within the "Frequently Bought Together" section.
  • Browsing History Page: These ads can show up on the user's browsing history page.
  • Related Product Recommendations: Ads appear in the related product recommendation section on product detail pages.
  • Amazon Live: Ads can also be featured during Amazon Live streams.
• Off Amazon:
  • Sponsored Display ads can be displayed on third-party websites and apps through Amazon's extensive network of advertising partners, reaching a wider audience beyond the Amazon platform.

Sponsored Display Ads Optimization Strategy

Amazon has continually innovated and improved its advertising platform, providing sellers with more marketing tools and opportunities. One of them is contextual targeting. This allows them to showcase their products outside of the Amazon platform, thereby increasing brand exposure and attracting more potential customers.

Amazon's display advertising offers various targeting options, including:

• Product or ASIN Targeting: Ads will be prioritized to appear on pages related to the target product or ASIN.
• Category Targeting: Ads will be prioritized to appear on pages related to the selected category.
• Retargeting Based on Browsing History: Ads will be shown to users who have previously browsed similar products.
• Demographic Targeting: Ads will be displayed to individuals who match the characteristics of the target audience.

Unlike other types of ads, this type of advertising focuses more on off-platform exposure rather than specific search keywords or target audiences. Amazon offers up to 13 category options, allowing sellers to select categories relevant to their products for targeting. This provides sellers with more flexibility to showcase ads to potential target audiences.

However, to maximize the effectiveness and cost-effectiveness of ad placements, it's advisable to set bids conservatively and choose categories with high relevance to their products for targeting. Conservative bidding can reduce advertising costs, while selecting highly relevant categories ensures that ads are shown to audiences potentially interested in the products.

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Remarketing Ads for Sponsored Display

Sellers can observe potential customers' behavior with their products, such as adding items to the cart or viewing product detail pages. By leveraging the audience targeting feature of SD ads, sellers can show ads to these potential customers who have shown interest but have not yet made a purchase, reminding them to complete the purchase.

In practice, sellers can choose browsing retargeting to target SD ads to customers who have previously browsed their products but have not yet made a purchase. Through this approach, sellers can precisely show ads to potential customers and prompt them to complete the purchase, thereby increasing sales conversion rates.

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General Strategies for Optimizing Amazon PPC Ads

Here are some general strategies to help you manage advertising campaigns more effectively.

1. Maintain Competitive Positioning: For well-performing search terms, such as those with high search rankings and impression shares, it's important to sustain competitive positioning and consider increasing investment in Sponsored Brand ads.
2. Boost Sponsored Products ads: For search terms with average performance but high ACoS, these terms may not have received sufficient exposure or may be affected by intense competition. Therefore, Investing more in SP can enhance ad impressions and clicks,  improve performance and lower ACoS.
3. Focus on Product Attributes and Layout Direction: Develop corresponding advertising strategies based on specific product attributes or product line layout directions to maximize advertising effectiveness and sales revenue.

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Read more: How to Analyze your Competitor's Amazon PPC Strategies?

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Amazon PPC Strategies for Different Budgets

Sellers need to formulate different advertising strategies to achieve the best  results and ROI based on theirt budget. Here are some suggestions of advertising strategies for scenarios.

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High Budget Strategy

If the products you are selling are in highly competitve category and have sufficient budget, consider adopting a high investment, high return strategy. You can improve products exposure through Increasing or even double the suggested bid on Amazon, bid on top of search placements to gain more traffic. Sellers mainly focus on acquiring traffic while being more lenient on the ACOS to quickly accumulate sales and improve sales rankings. But with this high initial investment in the early stage, pay attention to control your ad cost.

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Limited Budget Strategy

When your budget is limited but facing a fierce competition, you may choose to maintain profitability and avoid overspending by gaining some advertising exposure and sales volume through low bids and strict ACoS control. It mignt minimize risk, but it also limites exposure and traffic. If your goal is to create a best seller, this might not be the best approach for you.

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Medium Budget but high performance Strategy

This suits sellers with a medium budget aiming for quick growth in less competitive niches. Sellers may slightly increase fixed bids and make it higher than the suggested bid. You can also allow for a higher ACoS initially to gain traffic. But it still requires constant optimization to avoid overspending.

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Initial Testing and Exploration Strategy

For sellers with limited budgets, you can allocate a small budget to test different PPC strategies, gathering data on market feedback and user behavior for future optimization and adjustments.

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To maximize the effectiveness of your Amazon PPC campaigns, consider using automation tools like M19. Tools like M19 not only automate key processes that save massive time if you gonna lauch multiple campaigns or but also provide comprehensive reports that help Amazon sellers understand campaign performance and identify opportunities.

Key Features of M19

• Amazon PPC Automation: Automate bidding, ACOS target adjustment, decent budget allocation, and keyword exploration to optimize your PPC campaigns.‍
• Keyword Tracking: Monitor and analyze the performance of your bidding keywords to adjust strategies accordingly.‍
• In- depth Reporting: Generate comprehensive reports that provide insights about product groups and ads performance. helping agencies make business decisions.

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Whatever which strategy you want to deploy, m19 can always save your budget accordingly.

Because we estimate the optimal bid based on the historical sales data and keyword performance for ad campaigns, which can be 80% less than the mimimum suggested bid on Amazon.

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How much should I Bid for Amazon PPC?

When establishing your Amazon PPC budget, it's essential to calculate your Break-Even Point (BEP) max bid accurately. This metric serves as the threshold for the maximum amount you're willing to spend on a click while still maintaining profitability. The calculation formula is:

BEP Max Bid = Average Gross Profit - Conversion Rate * Average CPC

The formula for determining the BEP Max Bid involves several key variables:

• Average Gross Profit per Unit: This is the profit you make from each sale after accounting for all costs associated with the product.
• Conversion Rate: The percentage of clicks on your ad that result in a sale.
• Average Cost Per Click (CPC): The amount you pay each time someone clicks on your ad.

Imagine you're running a business selling organic skincare products on Amazon. Your average gross profit per unit is $10, your conversion rate stands at 5%, and the average cost per click (CPC) for your ads is $0.25.

BEP Max Bid = $10 - (5% * $0.25) = $10 - $0.0125 = $9.9875

In actual sales, you'll have to consider the impact of organic orders alongside ad-driven ones. If, for instance, organic orders account for 40% of your total sales, your actual maximum bid may be higher, perhaps ranging from $0.3 to $0.4, to ensure your advertising investment complements

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FAQ

What is Amazon PPC?

Amazon PPC (Pay-Per-Click) is an advertising model where sellers pay a fee each time their ad is clicked. It allows sellers to promote their products on Amazon's platform and increase visibility to potential customers.

How does Amazon PPC work?

Sellers create ad campaigns on Amazon's advertising platform, set bids for keywords or product targeting, and create ad creatives. When shoppers search for relevant keywords or products, Amazon displays ads based on relevance and bid amount. Sellers are charged only when a shopper clicks on their ad.

How much does Amazon PPC cost?

The cost of Amazon PPC varies depending on several factors, such as the competitiveness of your keywords, your bids, and your conversion rate.