Amazon is the search engine for product research for many customers just like Google is for information, gaining visibility and driving traffic to your products is crucial.
One of the most efficient ways to achieve this is through Amazon Pay-Per-Click (PPC) advertising. Understanding Amazon PPC and its key components can help businesses optimise their advertising strategies and align them with their overall objectives.
What is Amazon PPC?
What Are Amazon Sponsored Products?
Sponsored Products are often the first step into the world of Amazon PPC for many sellers. These ads highlight individual product listings and work on a cost-per-click model, meaning you only pay when a shopper clicks on your ad.
Sponsored Product ads are typically displayed within search results and on product detail pages. When a customer searches a keyword that you’ve bid on, your ad has a chance to appear either at the top, middle, or bottom of the search results page. They can also appear on the right-hand side of the search results page and within the carousel of suggested products on individual product pages.
These ads are ideal for driving sales of individual items, promoting new products, and clearing out inventory. They’re highly targeted and can be set to match broad, phrase, or exact keyword match types, giving you control over who sees your ads.
What Are Amazon Sponsored Brands?
What Are Amazon Sponsored Display ADS ?
Sponsored Display is a more advanced advertising solution that enables businesses to reach audiences both on and off Amazon. They use automatic targeting, allowing Amazon to leverage its powerful algorithms to find the right audience for your ads.
Sponsored Display ads appear in various locations across Amazon, including below the fold on product detail pages, on the right rail of search results, at the bottom of search results, and even on third-party websites and apps within Amazon’s extensive advertising network. They can also appear in Amazon-operated locations like Fire TV and Kindle.
These ads are excellent for retargeting, reaching audiences who viewed your products or similar products but didn’t make a purchase. They can also help increase visibility for new products and drive traffic from off Amazon, making them a versatile tool in your advertising arsenal.
Key Components of Amazon PPC
Understanding the key elements of Amazon PPC is fundamental to leveraging its full potential.
Here are the primary components:
Campaign Types
There are three types of Amazon PPC campaigns (types of adverts you can run): Sponsored Products, Sponsored Brands, and Sponsored Display. Sponsored Products promote individual product listings and are often the starting point for Amazon PPC. Sponsored Brands help increase brand awareness and display a collection of your products. Sponsored Display allows advertisers to reach audiences both on and off Amazon with display ads.
Each campaign type serves a distinct purpose and appears in different locations on Amazon, allowing you to tailor your advertising strategy to fit your specific objectives. Let’s delve deeper into these types and their unique characteristics.
You have two primary options for targeting your campaigns (in Sponsored Ads and Brands): automatic and manual. These two campaign types offer different levels of control and complexity, serving unique roles in your overall advertising strategy. Here’s an in-depth look at automatic and manual campaigns and their distinct advantages.
What Are Automatic Targeting Sponsored Products Ads ?
Automatic campaigns are the more straightforward of the two options. When you set up an automatic campaign, Amazon’s algorithm selects keywords and matches for you based on the information in your product listing.
Amazon takes into account various aspects of your product listing, including the title, description, and category, to determine relevant keywords. When a customer’s search matches those keywords, your ad may be displayed.
Automatic campaigns are an excellent way to start your Amazon PPC journey as they require less management and keyword expertise. They are particularly beneficial for new sellers or those with limited PPC experience. Additionally, they can be used to discover new keywords that you may not have considered initially. The search term report from automatic campaigns can provide valuable insights into the keywords real shoppers are using to find your products.
What Are Manual Campaigns on Amazon Ads ?
Manual campaigns, on the other hand, offer a higher level of control. With manual campaigns, you select the keywords you want to target and choose the match type for each keyword – exact, phrase, or broad. You can also use negative keywords to prevent your ad from showing for certain searches.
This type of campaign allows you to be more strategic in targeting specific customer searches and can lead to higher conversion rates if you’ve conducted thorough keyword research. Manual campaigns are ideal for leveraging the keyword data you’ve gathered from automatic campaigns or other research tools.
However, manual campaigns do require more time and effort to manage. You’ll need to monitor your campaign’s performance regularly, adjust bids as necessary, and refine your keyword list based on performance data.Many sellers choose to hire a Amazon ppc management agency .
What is Amazon Ad Auction ?
Amazon provides three bidding strategies: dynamic bids (down only), dynamic bids (up and down), and fixed bids. The bidding strategy determines how Amazon uses your bid in auctions. The choice of strategy should align with your campaign goals. Before we have a look at Amazon ppc bidding strategies,lets look at Amazon AD auction.
Amazon’s advertising model operates on an auction system, similar to many other digital advertising platforms. Understanding this auction system is vital for Amazon sellers as it directly influences how often your ads are shown and the cost associated with each ad click.
Understanding the Amazon Ad Auction
When a shopper enters a search query on Amazon, an instantaneous auction is triggered to determine which ads will be shown and in which order. Each advertiser’s bid for the relevant keyword and the ad’s relevance to the search query are taken into account during this process.
It’s important to note that Amazon operates on a second-price auction model. This means that you pay one cent more than the second-highest bid, not your maximum bid. Therefore, if you bid £2.00 and the second-highest bid is £1.50, you would pay £1.51 for the ad placement if you win the auction.
Key Factors in the Amazon Ad Auction
Two primary factors influence the outcome of the Amazon ad auction: your bid and your ad’s relevance.
Bid: Your bid is the maximum amount you’re willing to pay for a click on your ad. Higher bids have a better chance of winning the auction, but they also result in higher advertising costs.
Ad Relevance: Amazon considers the relevance of your ad to the user’s search query. This relevance is determined by multiple factors, including the match between the search query and your keywords, your product title, description, and customer reviews. Amazon uses this information to calculate a relevance score. Ads with higher relevance scores are more likely to win the auction, even if their bids are lower.
Winning the Amazon Ad Auction
Winning the Amazon ad auction means your ad gets shown to shoppers. However, winning doesn’t necessarily require the highest bid. Because Amazon wants to provide a positive experience for shoppers, it also takes ad relevance into account. Therefore, a highly relevant ad with a lower bid can potentially win over a less relevant ad with a higher bid.
A winning strategy for the Amazon ad auction involves careful keyword selection, an optimised product listing, and strategic bidding. Understanding the Amazon ad auction and how to navigate it can help you make more informed decisions and ultimately, run more successful Amazon PPC campaigns. Regularly reviewing and adjusting your bids and keywords in line with performance data can significantly improve your chances of winning these ad auctions.
Dynamic Bids (Down Only)
Dynamic bidding (down only) is a strategy where Amazon adjusts your bid in real-time, lowering it (up to 100%) for clicks that may be less likely to convert into a sale. However, Amazon won’t increase your bid under this strategy.
For instance, if you set your maximum cost-per-click (CPC) bid at £2 for a keyword, Amazon won’t bid more than that. But if the algorithm determines a click is less likely to convert into a sale, it may lower your bid to increase your return on ad spend (ROAS).
This strategy can be beneficial if you’re looking to maximise your ROAS and are working with a tight budget. It offers some level of control over your ad spend while leveraging Amazon’s machine learning to avoid clicks that may not lead to sales.
Dynamic Bids (Up and Down)
The dynamic bids (up and down) strategy offers Amazon more flexibility in adjusting your bids based on the likelihood of a sale. Amazon will decrease your bids for clicks that seem less likely to convert, like the down only strategy, but it can also increase your bid (by a maximum of 100%) for clicks that appear more likely to convert into a sale.
Let’s say you’ve set a maximum CPC bid of £2 for a keyword. Under this strategy, Amazon might lower your bid for less promising clicks, but it might also increase it up to £4 for clicks that seem more likely to result in a sale.
This strategy can be useful if you’re aiming to maximise conversions and are willing to spend a bit more on highly promising clicks. It provides a balance between controlling your ad spend and leveraging Amazon’s real-time bidding algorithm for better conversion chances.
Fixed Bids
The fixed bids strategy is the most straightforward of the three. With this approach, Amazon uses your exact bid for all auctions and doesn’t adjust your bid based on the likelihood of a sale. If you set your maximum CPC bid at £2, Amazon will use that bid for all auctions.
This strategy gives you the most control over your bids but doesn’t leverage Amazon’s machine learning capabilities to adjust bids in real-time. It can be beneficial if you’ve done extensive keyword research and are confident in your bid amounts, or if you want to maintain strict control over your ad spend.
What are Amazon Keywords and Match Types ?
Keywords are vital to targeting your ads. Amazon offers three match types: broad, phrase, and exact. Each has different levels of reach and precision. Keyword research and ongoing optimization are crucial to successful PPC campaigns.
Understanding the purpose and function of each keyword match type is vital for successful Amazon PPC campaigns. Broad match keywords help maximise visibility, phrase match keywords balance reach and precision, and exact match keywords target precise search terms. Regular keyword research and ongoing optimisation are essential practices to ensure your keywords align with customer search behaviour and maximise your advertising return on investment. Lets look at each type below :
Broad Match
Broad match keywords offer the widest reach. When you use a broad match keyword, your ad can appear for any search that includes all your keyword terms in any order, and even for related searches. For example, if your broad match keyword is “men’s running shoes,” your ad could appear for “running shoes for men,” “men’s shoes for running,” or “best running shoes for men.”
The purpose of broad match keywords is to maximise your ad’s visibility and reach as many potential customers as possible. However, broad match keywords may lead to more irrelevant clicks, as they cast a wider net. They’re excellent for identifying new keyword opportunities and can provide valuable data for keyword optimisation.
Phrase Match
Phrase match keywords are more precise than broad match keywords but less restrictive than exact match. When using phrase match, your ad appears for searches that include your keyword in the exact order you enter it, but other words can be included before or after the keyword. For example, if your phrase match keyword is “men’s running shoes,” your ad might show up for “black men’s running shoes” or “men’s running shoes on sale.”
The purpose of phrase match keywords is to strike a balance between reach and precision. They’re particularly useful when the order of the words in your keyword is important. Phrase match can also help exclude irrelevant traffic that might be attracted by a broad match keyword.
Exact Match
Exact match keywords are the most precise match type. Your ad will only show up for searches that match your keyword exactly or are close variants of your keyword. For instance, if your exact match keyword is “men’s running shoes,” your ad will only show for “men’s running shoes” or very close variants like “men’s running shoe.”
The primary purpose of exact match keywords is precision. They allow you to target very specific search terms, resulting in higher relevance and potentially better conversion rates. Exact match keywords are ideal when you know exactly what search terms your potential customers are using.
What is ACoS (Advertising Cost of Sale) on Amazon ?
ACoS is the key performance indicator in Amazon PPC. It is the ratio of ad spend to targeted sales and is used to measure the effectiveness of your advertising campaigns. A lower ACoS signifies a more profitable campaign.
In conclusion, understanding when and where to use Amazon advertising strategy can help you increase your visibility,reduce wasted ad spend and sales on the Amazon platform. UMKYSEO can help you with Amazon advertising book a free discovery.