Did you know that most new brands today focus their selling efforts on eCommerce marketplaces? This shift in shopping behavior has been a driving force for Amazon’s growth. Amazon continues to evolve as the need for a more expansive product catalog is desired, as well as faster shipping. With the evolution of more products online the challenge of getting your products on page one of search results is a critical and important undertaking. That’s where Amazon PPC (Pay Per Click) advertising comes into play.
What is Amazon PPC advertising?
PPC stands for Pay Per Click. This type of advertising campaign focuses on the advertiser only paying for the actual clicks they receive on their ad. Amazon PPC advertising has three formats:
- Sponsored Products
- Sponsored Brands
- Sponsored Display
The primary difference and advantage to advertising on Amazon is that the customer is already there to make a purchase. Other platforms have different primary purposes like sharing information (Google), connecting with friends (Facebook and Instagram), learning more about a product or how to (YouTube), etc. However, Amazon is different and the primary purpose is to connect customers with products they are interested in and convert that interest into a sale.
In addition, Amazon’s PPC advertising often blends in with other relevant products in the organic search results which creates a more seamless and less intrusive look and experience for shoppers.
Top Benefits to Advertising Your Products on Amazon
The goal of any advertising campaign is to increase awareness of your brand or product. Amazon PPC advertising allows brands to boost their visibility for their products. Traditionally, without advertising, it could take weeks, months or even years to work your product up to the first page of search results. With Amazon Sponsored Product and Sponsored Brand campaigns you can move your product up in search results almost immediately.
Selecting the Right Type of PPC Campaign for Your Products
It’s a challenge to figure out your budget and which PPC ads will perform best for your product and category. Our experienced specialists make it easy to find the right approach and they monitor your ad account - so you don’t have to!
Here are the three fundamental ad types which are targeted to the shoppers search terms or products, and boost the visibility of your products and brand on Amazon.
Sponsored Product ads showcase individual product listings to shoppers as they browse search results. The way these ads are presented make them ‘look like’ a typical search result and they tend to show up within search results. Sponsored product ads are seamless and blend into the organic search results but give you a higher position within the search results. These ads also show up to customers who are already in the “ready to buy” stage of their search. This type of advertising is available to all sellers in Vendor Central or Seller Central.
Sponsored Brand ads feature three of your products within a single ad and direct customers to your Brand Store, product collection page or sponsored brand video thus allowing them to see more about your brand and additional products that you have available for sale. This option draws attention but it is more obvious that it’s an ad. These ad types are limited to Amazon Vendors and Brand Registered sellers within Seller Central.
Sponsored Display ads show up to customers as they browse a competitor's product. These campaigns use auto-generated display creatives to help inspire the purchase while keeping the familiar look of shopping on Amazon. Additionally, these ads can be configured to reach audiences off Amazon across third-party publishers.
Advertising is an important part of your budget but in order for it to be effective you need to be utilizing the right keywords as well as make sure your listing is optimized with quality information. You don’t want to spend money to attract a customer only to send them to a listing that is sub par. Check out how we helped one client review their advertising to spend a considerable amount less (52% less to be exact) while maintaining their annual sales.
How Should Your Budget for PPC Advertising?
The most asked and highly important question. You need to budget enough money to make an impact but not lose your profits. As a general rule, the minimum we recommend spending on Amazon is about $500 per product each month. This will put you in a category to get some basic results to work and help to optimize your campaigns.
Additionally, Amazon does have minimum requirements for advertising. The minimum amount you can spend each day on Amazon Sponsored Product ads is $5 on each campaign. Let’s say you are running two campaigns a month. In this case you will need to budget and spend at least $300 a month on ads.
These numbers are just starting points and every campaign is unique. Our advertising specialists take a close look at each campaign and the products being advertised in order to make qualified recommendations. In addition, they consistently monitor the ad campaigns and make adjustments to ensure they are performing at their best and for our clients to get the most out of their ad spend.
Keep in mind that budgets are variable and are based on the competition within each category, the goals of the campaign and the actual cost of the goods. A campaign geared towards creating awareness of the brand to new customers will have different budget guidelines than a campaign geared towards sales.
Easiest Way to Calculate Your ACoS
The ACoS is your Advertising Cost of Sale and is used to measure the performance of your Amazon PPC campaign. This is the easiest way to calculate your ACoS.
(Profit Margin) / (Selling Price) x 100 = (Target ACoS)%
That being said, we consider it “best practice” to try and keep the ACoS in the 30-35% range, even if the formula says it could be higher.
Advertising does help to improve conversion rates. Amazon PPC ads tend to have a higher conversion rate compared to other forms of advertising. They also help to create brand recognition and improve the organic search results.
Concerns of Spending on Advertising During COVID-19
In the first quarter of 2020 COVID-19 did rock the world in many ways, including supply chains. Over the last few months we’ve seen things start to stabilize. Advertising results during the onset of COVID-19 were random across the board. However, the businesses that “stayed the course” have seen profits return to mostly normal. The key factor was dependent on the business being able to keep their products in stock.
There have been some sellers within specialized categories, like party supplies
and some school supplies, that have seen a hit to sales but this is moreso an overall account situation and due to the climate that we are in and not related to PPC advertising. In these situations businesses have decided to cease advertising spending or pull back their ad spend considerably.
On the other hand, there have been businesses that have seen their product be in more demand now than it was in the past. Once again, this also depends on the product and the category.
How Can I Improve My Amazon PPC?
Make sure your budget is adequate for your campaign and the category in which you are selling. Use the calculation above to calculate your ACoS.
Keep an eye on what you are bidding on each target. Make sure the bid you are using is hitting a good target ACoS. These will need to be continuously optimized.
These are the words potential customers are using to find your products. It’s important to be utilizing relevant keywords in your product listing as well as in the backend section of your listing in order to connect with your target market.
Optimize Your Listing
Your goal is to drive traffic to your product listing, make sure you keep the buyers interest by having informative bullet points and descriptions as well as high-quality photos and graphics.
Advertising Services to Help Your Campaign
Our team is experienced in managing effective Amazon PPC campaigns. They work tirelessly to strategize, create, execute and maintain each ad campaign and are experts at implementing and optimizing campaigns to lower ACoS and maximize the advertising budget.
Our services include:
- In-depth keyword research and competitive analysis
- Product advertising recommendations
- Targeted approach by category, ASIN, placements and/or competition
- Customized campaign setup and strategy
- Automatic and manual campaign management
- Regular and timely bid adjustments
- Subscribe and save recommendations
- Promotion, coupon and lightning deal management
- Weekly reporting
- On-going optimization
- Graphic design
We believe and understand that Amazon is a dynamic ecosystem that must constantly adapt and evolve to achieve optimal results. As your campaign runs, we gather data on impressions, clicks, ACoS and other KPIs to measure ad performance and optimize when necessary.
Are you ready to have an Amazon PPC advertising campaign that is specific to your target market and needs? Careful consideration and monitoring can ensure your advertising strategy success. Schedule your free 30-minute consultation to learn more.