Amazon PPC: Your Guide to Sponsored Advertising in 2021

Introduction

If you’ve bought products on Amazon you’ve likely bought a promoted product without realizing it.

Amazon does an excellent job of integrating advertised products into organic search results. In fact, many shoppers click on sponsored listings without necessarily knowing that the listings are advertisements.

As a seller, you’ve dabbled with Amazon Advertising, but given that Amazon Advertising is now considered one of the big-three digital ad platforms (Google and Facebook being the other two), dabbling simply isn’t enough. If you’re merely average, you’re going to get beaten by competitors who:

CHAPTER I What Are Amazon Sponsored Ads?

How can Sponsored advertising get you more sales on Amazon? Amazon PPC advertising helps sellers to:

  1. Increase Marketplace Visibility: An Amazon ad campaign introduces your product to more shoppers.
  2. Intensify Organic Impact: As you sell items through the Amazon Sponsored Products program, your sales and your rankings will improve. Your Amazon marketing campaigns will help your organic search position as a result.
  3. Drive Customer Acquisition: Amazon pay per click is one of the best ways to acquire new customers who make repeat purchases.

TL;DR

If you’re getting started with Amazon PPC, Sponsored Products Ads is the place to start . . . but by no means the place to end if you’re a member of the Amazon Brand Registry.

Sponsored advertising, also known as PPC (pay-per-click advertising) is by far the most popular. However, the more people use PPC, the higher the cost per click (CPC) of each keyword. 

Other forms of Amazon advertising (video ads, custom ads, and Amazon DSP) are more complicated and not available to the majority of merchants. The three main types of ads on Amazon are Sponsored Product Ads, Sponsored Brand Ads, and Sponsored Display Ads.

Amazon PPC, types of sponsored advertising

1. Sponsored Products Ads

Sponsored Products Ads are available to all sellers on both Seller Central and Vendor Central. Because any seller can use SPAs, these ads are the go-to for Amazon advertisers. They appear directly in the product results for a keyword.

Sponsored Product Ads

Sponsored Product Ads are easy to set up and they’re effective. They allow targeting by keyword or ASIN or category, which affords you many options for ad space.

But there’s a flip-side too; because sponsored product campaigns are so prevalent, the competition is fierce. CPCs can be very high, but these product ads should still be a big part of your Amazon advertising strategy.

Sponsored Products Ads Appear:

– Above shopping results
– Alongside shopping results
– On product detail pages

2. Amazon Sponsored Brands Ads (Formerly Headline Search Ads) 

Unlike most Amazon advertising campaigns, Sponsored Brands campaigns are only available to members of Amazon Brand Registry. There is significantly less competition when compared to other Amazon marketing services. SBAs appear in different places than Sponsored Products Ads, such as on top of search results.

Headline Ads / Amazon Sponsored Brand Ads

Sponsored Brand Ads linked to your Amazon Store. An Amazon Storefront can be a powerful showcase for brands selling on Amazon. Buyers interested in a particular brand can view multiple products and browse through a seller’s product listings without a specific search intent. 

3. Sponsored Display Ads

SDAs are the newest member of Amazon’s PPC family, and they were previously only available to merchants using Amazon DSP (Demand Side Platform). Now the barrier to entry is significantly lower, so any seller who is Amazon brand-registered may partake. Sponsored Display Ads can appear above and within search results, as well as next the the product detail page.

Amazon Sponsored Display Ads

Because Sponsored Display Ads can appear on sites outside of Amazon, they are a great way to direct external traffic to your listing using ASINs, categories, or keywords.

CHAPTER II The Basics of Amazon PPC

To create the content of your first campaign, you must understand how PPC campaigns work. Here are the basics.

Pro Tip:

Use one product per campaign just to keep things clean. It’s easy to link that product to the campaign advertising it: simply connect via ASIN/SKU.

An ad campaign is the highest-level grouping within the Amazon PPC organization. Think of an ad campaign as a container holding one or more ad groups. The ad group will contain your keywords and/or ASIN targets.

Amazon Ad Campaigns, Groups, and PPC Keywords

The Parts of an Amazon PPC Campaign

Each ad campaign on Amazon should contain the following: 

1. Campaign Name

Make it easy on yourself and pick a campaign name that is simple, descriptive, and easy to distinguish.

2. Target ACoS

Advertising Cost of Sale (ACoS) is a metric that Amazon created to indicate the cost-effectiveness of your advertising campaign. It is the amount spent on advertising divided by the revenue attributed to the advertising.

3. Targeting Type

Automatic Targeting

Amazon’s algorithm picks keywords based on your listing content and competitor products. An Amazon PPC automatic campaign will pick up all sorts of keywords that you wouldn’t have otherwise found in a keyword research tool.

Manual Targeting

You control the keywords or ASINs or categories you want to target. Use an Amazon PPC software like Seller Labs Pro to find intelligent suggestions and tens of millions of search terms. 

4. Daily Budget & Campaign Duration 

What you’re willing to spend on an advertising campaign during a 24-hour period and how long you want the campaign to run.

5. Ad Groups

Think of these as smaller containers within the larger campaign container. 

Pro Tip:

Since keywords and bids apply to all SKUs within an ad group, we recommend that you group SKUs that are closely related. Since you can reuse ad groups in multiple campaigns, this organization makes it easier.

The Parts of an Ad Group

Within any single ad group, you’ll set or select the keywords, ASIN targets, and match types.

Keywords

The biggest component of ad groups on Amazon is keywords. Once you choose your keywords for Amazon, you can stick with your default bid for the ad group or you can get more granular and bid different amounts on specific long-tail keywords.

ASIN Targeting

Pick which of your competitors’ ASINs you’d like to target and advertise on their product pages. Like keywords, these ASINs can be manually selected or automatically chosen by Amazon’s algorithm.

Match Type

If you’re not running an auto-campaign – when Amazon does the keyword selection for you – you can pick from 4 target match types: 

1. Broad Match

Broad match keywords must include specific words, but they can be in any order.

2. Phrase Match

Specified words must be together, but it allows for other words before or after.

3. Exact Match

This type only matches the exact word or phrase (allows for plurals, misspellings, and prepositions).

Diagram
4. Negative Keywords

Negative keywords are like a blacklist. They are exact words or phrases you expressly do not want to bid on.

How to Run PPC: The Shortlist

Basically, Amazon PPC advertising starts with a campaign, which breaks down into different groups. In some ways, the amount of control you have over your campaign is great. In other ways, it’s a tad overwhelming. As you advance in your career as a PPC rockstar, try to remember the basics!

CHAPTER III How to Run Amazon Sponsored Advertising

Building an Amazon PPC strategy is hard, which is why we recommend an Amazon PPC management service. But if you’re getting started or you want to bring advertising in-house, you can still put together a basic strategy.

DODO NOT

Determine which products you want to advertise. 

Not all products are created equal when it comes to advertising. Some suggestions for good products for paid advertising:

– High-margin products;

– Products that are likely to perform well when advertised;

– Products where your number-one competitor is not Amazon.

Assume that your primary goal for each campaign is the same.

When you set your goals, you know where to allot your ad spend going forward. Here are some objectives that your campaigns can achieve:

– Better ranking;

– More reviews; 

– Brand recognition;

– The coveted Amazon Best Seller Badge.

CHAPTER IV Growing Your Business Using Amazon PPC

When it comes to Amazon Advertising strategies, it’s a running commentary around the Seller Labs offices that most questions are answered with, “It depends.”

“What should my ACoS be?” “How many clicks without conversion mean that the keyword isn’t working?” “How much should I be spending on Amazon Advertising?”

The reason that we use “It depends” so frequently is that every business is different. The advertising goals and strategy that work for one business likely won’t work for another. 

Amazon Advertising Strategies & Goals

Now, what’s the difference between a goal and a strategy, especially as it comes to Amazon Advertising?

Goal (n): the result or achievement toward which effort is directed

Strategy (n): a plan, method, or series of maneuvers or stratagems for obtaining a specific goal or result

Thus, a goal is what you want, and your strategy is how you get there. When it comes to Amazon Advertising, your goals should all be attached to measurable metrics. There are a plethora of metrics to choose from as well: Cost Per Click, Cost Per Sale, Conversion Percentage, Ad Revenue, Impressions… It’s overwhelming. Catch up on what metrics you should be monitoring in our TACoS Tuesday webinar replay.

TACoS Tuesday: A Fresh Recipe for Amazon Advertising

Do you get confused with all the data available, especially when it comes to Amazon PPC Silence the noise & listen to the right Amazon advertising metrics.

Strategy: Brand Awareness

This strategy’s profitability may not be immediate, but the long-term returns are astronomical. Think of it like those sign spinners on the side of the road. They’re less likely to drive sales than a direct marketing campaign, but those spinners are getting your name out there.

Sponsored Brands Ads are great examples of “brand awareness” advertising campaigns. A customer comes to Amazon and looks for something like “coffee” or “slippers.” They’re not searching for any specific brand, but you know you want to get your brand out there for those general keywords. Additionally, Sponsored Brands Ads offer New to Brand Metrics, which will illustrate how many purchases have come from shoppers who have not purchased from you within the last year.

Goal Metric:

Impressions. Gaining brand awareness is all about impressions. You want to increase the number of eyes on your products. If you see impressions increase, you’re doing well for your goal. You could also use the New to Brand Metric as well.

Strategy: Competitive Attack (Offense)

This is another strategy that’s going to get expensive since it requires bidding against brands trying to own their keywords. Really, you’re trying to steal market share from your competitors. The keywords you’re targeting here are competitor’s brand names. 

Additionally, you could target top keywords your competitors are ranking for, beyond their brand name. With a little bit of research in Seller Labs Pro, see what keywords or ASINs are top performers for your competition, and estimate the cost for usurping their rank. 

Goal Metric:

For these particular keywords, this will be a long-term goal of reducing your average CPC over time. If you’re able to bid lower and still gain that traffic, you’re conquering those keywords.

Strategy: Brand Loyalty (Defense)

This advertising strategy is the opposite of a Competitive Attack. An advertising campaign aimed at Brand Loyalty targets customers who know and love your brand. It’s likely these campaigns will be a bit more expensive but are likely to have a higher conversion percentage.

No matter if you’re Adidas or someone new, competitors are trying to target your popular keywords. You need to remain in control of your branded keywords. Would you let someone steal your product blueprints just because you made the actual product first?

This is also a great opportunity to utilize a feature like “Repeat Buyers” within your Buyer-Seller Messages in Seller Labs Pro. Take note of a customer’s loyalty over time by acknowledging and celebrating it.

Goal Metric:

Conversion Maintenance. You’re trying to maintain your top keywords and branded terms, so you don’t want to see any sort of decline in conversions. Chances are, that means your competitors are stealing your sales.

Strategy: Conquer a Keyword

When our Managed Services team starts working with a client, they try and figure out what top keywords can and will perform for a brand. Focus on 3-5 keywords and really OWN them. Which keywords you select will depend on a competitive analysis. There are keywords that may be financially impossible to own at certain points, but there are always other ways.

Goal Metric:

Top of Search Impressions & Clicks. Yes, impressions and clicks anywhere are helpful, but conquering a keyword means being at the top all the time.

Seller Labs Pro can help you get on top. Check keywords for search volume and position changes to see if it’s worth your effort, without too much trial and error.

Strategy: Optimal Shopping Time

If you’ve been utilizing our Ad Scheduling feature, you know when your ads convert the most shoppers. Once you’ve done the research, dedicate a campaign or group of campaigns specifically to when your buyers are most likely to convert. Since they’re shopping and likely to buy, toss more money into these budgets

Goal Metric:

Conversions. Focusing on when customers actually buy will help boost your conversions.

Conclusion & Next Steps

Treating PPC campaigns as separate entities with separate Advertising Strategies, like you can do within Seller Labs Pro, really helps you dial in your goals. Some campaigns may be designed to help with brand awareness while others function solely to steal traffic from your competitors. While this list is not all of the goals you could have with your advertising campaigns, it’s a good place to start to find some new strategies.

As Amazon Advertising rivals PPC on Google and Facebook, every Amazon brand must take advertising seriously. Remember the following:

  • Monitor your campaigns and adjust your keywords.
  • Spend money to make money. If a keyword is a true winner, it’s probably worth those extra cents on the bid.
  • Go beyond Sponsored Products Ads (if you can). As a brand-registered seller, you have access to Sponsored Brands Ads and Sponsored Display Ads, which means you can get your product in front of shoppers in more places on and off the Amazon Marketplace.
  • Check your automatic campaigns for competitors’ ASINs where you can find even more keywords. Learn more about how to leverage ASINs in Search Term Reports.
  • Stay curious and hungry. Look for opportunities, however small, and seize those to differentiate your ad campaigns from those of your competitors.

Neither Amazon’s Seller Central nor Vendor Central help when it comes to ad campaigns. If you’re serious about Amazon PPC, you need a tool that can focus on Amazon Advertising. Consider an enhanced ad-management tool like Seller Labs Pro, which gives you increased capabilities and deeper insights.

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