Getting Started with Amazon PPC: Your Guide to Sponsored Advertising

Introduction

Needless to say, if you’re an Amazon shopper — and you probably are, given that more than 50% of U.S. households have Amazon Prime — you’ve likely bought a promoted product . . . and it’s possible you didn’t even realize it. Amazon does an excellent job integrating advertised products into organic search results while also giving them a little extra attention and denoting them as “Sponsored.”

As an Amazon merchant, you’ve likely at least 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. The game has changed and the question is no longer: “Are you using Amazon Advertising?” but instead: “How much better than your competitors are you when it comes to using Amazon PPC?”

If you’re merely average, you’re going to get beaten by competitors who:

  • Find new keyword opportunities and leverage them.
  • Bid smarter based on data-driven trends.
  • Manage their budgets better.
  • Adapt quickly to changes on the Amazon Marketplace and in the larger market.
  • Outsource their Amazon Advertising to experts.

Chapter 1: What Are Amazon Sponsored Ads? The Core Types of Amazon PPC.

As is the case on any advertising marketplace, as popularity increases, so do prices and competition. Sponsored advertising, also known as PPC (pay-per-click advertising) or CPC (cost-per-click advertising) is by far the most-popular — on and off of Amazon. Other forms of Amazon advertising (video ads, custom ads, and Amazon DSP) are more complicated and not available to the majority of merchants.

Sponsored Products Ads

The focus here is on a single product. Sponsored Products Ads are available to all sellers on both Seller Central and Vendor Central and they allow targeting by keyword or ASIN or category. Because any seller can use SPAs, these ads have become the PPC go-to for Amazon advertisers. They’re easy to set up and they most resemble the PPC/CPC model with which many advertisers are familiar. And they’re effective. But there’s a flip-side too; because these ads are so prevalent, the competition is fierce and the bidding can become inflated. Regardless, SPAs should be a big part of your Amazon advertising strategy.

Sponsored Brands Ads (Formerly Headline Search Ads) 

Sponsored Brands Ads is another PPC option, but one that is only available to members of Amazon Brand Registry, thus, the competition is already limited compared to Sponsored Products Ads. SBAs offer placement opportunities differing from Sponsored Products Ads as well as a link to a brand’s Amazon Store, which can be a powerful showcase for buyers interested in a particular brand. The focus here is on showcasing multiple products with an emphasis on growing the larger brand.

Sponsored Display Ads (Beta)

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 and sellers who are Amazon brand-registered may partake. This is an exciting foray into Amazon PPC advertising on and off Amazon and users can target using keywords or ASINs or categories.

Where do sponsored ads appear on Amazon?

Sponsored Products Ads appear: 

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

Table: Amazon PPC Advertising by Type

Sponsored Products Ads (SPAs)Sponsored Brands Ads (SBAs)Sponsored Display Ads (Beta) (SDAs)
AvailabilitySponsored Products Ads (SPAs)
  • 1P vendors
  • 3P sellers
Sponsored Brands Ads (SBAs)
  • 1P vendors
  • 3P sellers with Amazon Brand Registry
Sponsored Display Ads (Beta) (SDAs)
  • 1P vendors
  • 3P sellers with Amazon Brand Registry
ValueSponsored Products Ads (SPAs)
  • Driving product-specific sales for purposes of revenue, ranking, reviews, etc.
Sponsored Brands Ads (SBAs)
  • Sending Amazon traffic to a brand’s Amazon Store page
  • Driving sales for multiple products showcased
  • Building brand awareness
Sponsored Display Ads (Beta) (SDAs)
  • Sending Amazon and off-Amazon traffic to product detail page
  • Driving product-specific sales for purposes of revenue, ranking, reviews, etc.
TargetingSponsored Products Ads (SPAs)
  • Manual keyword, product, and category targeting
  • Automatic targeting
Sponsored Brands Ads (SBAs)
  • Manual keyword, product, and category targeting
Sponsored Display Ads (Beta) (SDAs)
  • Audience targeting (views, interests, searches, purchases)
  • Manual product and category targeting
PlacementSponsored Products Ads (SPAs)
  • Above shopping results
  • Alongside shopping results
  • Within shopping results
  • On product detail pages
Sponsored Brands Ads (SBAs)
  • Above shopping results
  • Alongside shopping results
  • Within shopping results
Sponsored Display Ads (Beta) (SDAs)
  • Off Amazon on third-party websites and apps
  • On Amazon: shopping results pages, product detail pages, product-related pages

Key Takeaway: 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.

What can Amazon Sponsored Advertising do for you? Well, in addition to selling more of your product and driving revenue, quite a bit more. Amazon PPC advertising helps sellers to:

  • Increase Marketplace Visibility: Sponsored ads introduce your product to shoppers broadly so you can start selling and earning by reaching more people. 
  • Intensify Organic Impact: As you sell items through the Amazon Sponsored Products program, your sales and your rankings will improve. These improvements will help your organic search position as a result.
  • Drive Customer Acquisition: Ongoing advertising is one of the best ways to attract and acquire new customers who then make repeat purchases and become loyal to your brand.
  • Help You Stay Competitive: Your competition is advertising, so even if you can’t beat them to it first, you can win by advertising more strategically. 

Chapter 2: The Basics of Amazon PPC

By now, you know that you need to advertise and that Amazon Sponsored Advertising is the place to start. To begin, first you must understand how campaigns work and the parts of a campaign that are important to your success. Here are the basics.

An ad campaign is the highest-level grouping within Amazon PPC organization. Think of an ad campaign as a container, a vessel holding one or more ad groups.Each campaign should contain the following variables set.

  • Daily Budget
  • Targeting Type (Auto or Manual)
  • Campaign-Level Negative Keywords
Amazon PPC

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

Campaign Components

Within any single campaign, you’ll set or select the following:

  • Campaign Name: Make it easy on yourself and pick a campaign name that is simple, descriptive, and easy to remember.
  • 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. A lower percentage is not necessarily always better. It all depends on your goals.
  • Targeting Type: Automatic or Manual:
    • Automatic: Amazon’s algorithm picks keywords based on your listing content and competitor products. You’ll pick up all sorts of keywords that you wouldn’t have otherwise known about.
    • Manual: You control the keywords or ASINs or categories you want to target. If you’re using the Seller Labs Pro Advertising Center Powered by Ignite to manage your Amazon PPC campaigns, the app will dig deep and make intelligent suggestions via a database comprised of tens of millions of keywords and user search terms. 
  • Daily Budget: What you’re willing to spend on an advertising campaign during a 24-hour period.
  • Campaign Duration: How long you want the campaign to run.
  • Ad Groups: Think of these as smaller containers within the larger campaign container. Within any single ad group, you’ll set or select the following:
    • Keywords and Match Types
    • Default Bids
    • Negative Keywords
    • Product Advertised

Seller Labs Tip: Since keywords and bids apply to all SKUs within an ad group, and since you can reuse ad groups in multiple campaigns, we recommend that you group SKUs that are closely related to each other. It just makes it easier. And when you start running lots of campaigns, consistent organization will save you time.

About Keywords

Keywords are the words that you tell Amazon are related to your product. You base them on the words or phrases for which you think people search. You can stick with your default bid for the ad group or you can get more granular and bid different amounts on specific keywords.

There are a number of different keyword match types, and it can be confusing. Let’s define and differentiate:

  • Negative Keywords: Like a blacklist, words you expressly do not want to bid on.
  • Auto-Campaign Amazon-Suggested Target Match: This is a separate campaign wherein Amazon’s algorithm chooses for you based on your listing content, competitor products, and possibly even image recognition.
  • Manual Campaign Targets: The specific keywords, ASINs, or categories you expressly want to bid on. And within this:
    • Broad Match Keywords: Must include specified keywords but in any order. May include other words before, after, or in between.
    • Phrase Match Keywords: Specified words must be together. Allows for slight misspellings, plurals, other words before or after.
    • Exact Match Keywords: The exact word or phrase (allows for plurals, misspellings, and prepositions).
    • Product Targeting: A particular ASIN or product category you want hone in on Targeting this way gives you laser-like aim as well as a wide net.
Amazon PPC

Chapter 3: Putting Theory into Practice

We could go on for weeks about how to build an Amazon PPC strategy. In fact, entire companies are built on the idea that advertising strategy can quickly become complicated and is best outsourced. But when you’re getting started and outsourcing isn’t an option, you can still put together a basic strategy to get some initial impact.

Amazon PPC Must-Do: Setting Goals and Defining Success

You’ve got products but not all products are created equal when it comes to lending themselves to advertising. 

1. Determine which products you want to advertise. Some suggestions:

  • High-margin products, 
  • Products that are likely to perform well when advertised
  • Products where your number-one competitor is not Amazon

2. Define your primary goal for each campaign. If you don’t, you can’t determine what’s a win or where to allot your ad spend going forward. So what are you trying to achieve?

  • Increased revenue? 
  • Boosted ranking? 
  • More reviews? 
  • Better brand recognition? 
  • The coveted Amazon Best Seller Badge

3. Define the primary ways you will define success. How will you measure campaign performance?

  • Increased sales due to advertising?
  • Improved conversion rate?
  • Decreasing ACoS?
  • Higher rank in search results?

How Do I Create a Sponsored Ad on Amazon?

A Quick Start to Configuring Your Amazon PPC Campaigns

1. Choose what you want to measure and track it. ACoS is a metric that Amazon created to indicate the cost-effectiveness of advertising campaigns. You’ll need to set a target percentage. A lower percentage is usually better, but not always, as in the case of a product launch where you might need to go with a higher ACoS in pursuit of sales velocity. For most campaigns, we suggest 25% if you’re not sure where to start.

2. Choose your targeting.

  • In automatic campaigns, Amazon’s algorithm picks keywords based on your listing content and competitor products. Although not required, we suggest having a low-budget auto-target campaign in place as it will help you discover new keyword opportunities. 
  • In manual campaigns, you control the keywords based on what you know. You will want to create broad-, phrase- and exact-match targeting ads to attract shoppers using specific search terms to gain the edge on the competition. You can also manually target ASINs and categories.

3. Choose your keywords. Find keyword opportunities that aren’t already played out in terms of usage and bid escalation. You can look for not-necessarily top-ten or high-price keywords but those which show up enough and convert well for you and your competitors. Where can you find these? In the User Search Term Report (literally a list of words that shoppers are using to find products) and via reverse ASIN look-up using a discovery tool like Scope. Here you’ll find keywords associated with any ASIN and how they rank. You’ll quickly train yourself to recognize opportunities others have missed.

4. Set your daily budget. Your daily budget is what you’re willing to spend on advertising a campaign during a 24-hour period (remember that this is on Amazon’s Seattle-HQ Pacific Time). In terms of how you divvy up your budget, think of manual-target campaigns as vacuuming up the most and the best keywords, user search terms, stats, and data. Now think about the little crumbs and things that got missed during the first pass. Automatic campaigns sweep those up for you. This simile should illustrate that manual-target campaigns are where you want to put the bulk of your budget. While you need to set a daily cap on spending, you’re going to set your default bids at the more specific ad-group and keyword levels so you can really prioritize your winners. For an auto-target campaign, we suggest a starting daily budget of at least $5.00–$10.00. For a manual-target campaign, we suggest $20.00 per day to start.

Seller Labs Tip: Start with a manual-target campaign to collect some initial information about what performs. With manual-target campaigns, you get more data and more control over that data, which in turn, allows you to fine tune your campaign and optimize for higher conversions and lower ACoS. Be sure to run the campaign at least 14 days before making changes. That will help you set baselines and goals based on solid data.

Chapter 4: Growing Your Business Using Amazon PPC

You may have established an amazing strategy and started your campaigns well but there’s one more thing to consider: whether you’re going to use Amazon’s in-account ad-management tool, or you’re going to use an enhanced ad-management tool like Ignite, which gives you increased capabilities and deeper insights.

Regardless of how you manage your Amazon PPC advertising, there are some things you should do in order to advertise successfully:

  • Monitor your campaigns and adjust your keywords to find what works.
  • Spend money to make money. If a keyword is a true winner, it’s probably worth those extra cents on the bid. Don’t lose it over pennies. 
  • Go beyond Sponsored Products Ads (if you can). If you’re a 3P brand-registered seller on Seller Central or you’re a vendor on Vendor Central:
    • You have access to Sponsored Brands Ads, which means there’s less competition than there is with Sponsored Products Ads, which are available to everyone.
    • You have access to Sponsored Display Ads, which means you can get your product in front of shoppers on and off the Amazon Marketplace.
  • Check your automatic campaigns for competitors’ ASINs where you can view their product listings and find even more keywords. Learn more about how to leverage this data in “ASINs in Search Term Reports: Answers to Your Questions and Optimization Suggestions.”
  • Stay curious and hungry. Look for opportunities, however small, and seize those to differentiate your ad campaigns from those of your competitors.

Conclusion and Next Steps

Amazon Advertising is already essential and it’s becoming increasingly powerful as Amazon continues to gain PPC market share and insert itself into the Google-Facebook duopoly. Every Amazon brand must take advertising seriously and invest wisely in it.

Both Amazon’s Seller Central and Vendor Central are great when it comes to reports and account health, but they’re jam-packed and they offer no competitive edge when it comes to ad campaigns. If you’re serious about Amazon PPC, you need a tool that is strictly for Amazon Advertising. 

Hit the mark with your Amazon advertising and try Seller Labs Pro, the Ultimate Amazon Advertising Solution

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