Amazon PPC Advertising - Three Strategies for Setting it up

One common trend with all tech companies is that they offer some form of advertising platform to their users, and Amazon Ads is no different in the Amazon marketplace. You may have wondered why your product sales are not as good as your competitors' despite your product being better in price and quality. The secret rests with PPC on Amazon or in 'Pay Per Click' on Amazon.

But what is PPC, and how can you target shoppers and boost sales on your Amazon seller account?

As an industry-leading Amazon marketing agency, we take you through the essential strategies you must know when setting up PPC on Amazon so that you can stay one step ahead of your competitors.

Amazon PPC campaigns are designed for sellers to help increase their product visibility and boost sales. The seller or advertiser normally pays a fee to Amazon when a potential buyer clicks on their advert. Because the payment happens only after each click, it is appropriately named as 'pay per click' or 'PPC'.

To achieve success and maximise returns on investment, it is crucial for Amazon sellers to carefully create, execute, and manage Amazon PPC ad campaigns. In the long-run, running a successful PPC campaign could lead to improved organic results allowing you to cut down the expenses on advertising and even expand sales on other targeted items in your inventory.

Below in this blog, we explore the three strategies further for setting up Amazon PPC ads and selling products on Amazon, including the types of PPC campaigns / PPC work.

Different Types of Ads - PPC on Amazon

Generally, as with most e-commerce platforms, there are multiple advertising options, and so there are different types of PPC campaigns to choose from depending on budget, target market and product requirements. Amazon offers three advertising options for sellers to promote their products on the marketplace. Amazon PPC Ads are:

2. Sponsored Products Ads - Amazon Ads

Product ads: These are cost-per-click (CPC) advertisements designed to promote individual product listings on Amazon, as well as on select premium websites and apps. Even if you have no prior advertising experience, you can set up a product campaign in just a few minutes.

3. Display Ads Sponsored - Amazon Ads

These are display ads available to businesses, whether they operate within the Amazon store or not. Leveraging machine-learning with different formats available, sponsored display ads enables businesses to reach their customers throughout the Amazon store and on other apps and websites.

For the type of Amazon ad required, always check Amazon policies and restrictions. It is always recommended that you follow all the crucial steps Amazon recommends to achieve the targets of your campaign.

The Strategies You Must Not Miss When Setting up Amazon PPC Advertising

In advertising, whether online or on the high street, an ad should speak directly to the potential buyer in a compelling way. That is when brand awareness is born, and viewers become paying customers. PPC on Amazon is no different from this age-old marketing strategy, but you may need assistance from an experienced Amazon marketing agency, such as Kangaroo UK, to help you reach your goals.

Let's focus on the fundamental strategies you should follow when setting up PPC advertising on Amazon.

1. Define Your Objectives

Having a clear objective is vital for any PPC ad campaign. As a seller on Amazon or a brand manager for a seller, you need to ask yourself - What am I trying to achieve with PPC advertising? What is my Amazon PPC strategy? On Amazon, goals can be two-fold.

The first is to increase sales, and the second is to boost product and brand awareness. If you feel you need to launch an aggressively successful sales campaign, then you need to sit down and conduct some keyword research. As a seller on Amazon, you will need to have an in-depth understanding of the best keywords, having used a keyword research tool, together with a list of negative keywords for different products.

Keyword performance, click-through rate and conversion rate are a few factors you should investigate before setting up PPC campaigns on Amazon. One other key benefit of this marketing strategy is that when you have your keywords organised properly within your campaign, it will also help you in the long term to reach a better organic ranking.

If your objective is to increase brand awareness, you will need to maximise the number of times your product becomes visible in the search results. In other words, the number of impressions on the search page is vital to raise awareness among searchers who use specific keywords. There are multiple ways to minimise the cost per appearance and click, and you will need specialist PPC advice to get the best out of your marketing and advertising budget.

2. Set a Clear Budget

A realistic budget is essential to achieve the results you wish and keep the initial costs down. There is a delicate balance between spending too much on your ad and spending too little. Neither extreme will give you lasting results, as you will not be able to manage your overall business needs in the short and long term in a sustainable way.

As a rule of thumb, ad spend on Amazon is considered excessive if it affects your profit margin and exceeds 20 per cent of the Amazon sales income. This is referred to as the advertising cost of sale, or ACOS, and can be calculated as shown in this example. Say the item sold for £100 and you spent £15 on ads. Your advertising cost of sales would be 15% of the sales income.

Therefore, you must set a daily limit on your ad spend, considering the cost per click, because failing to do so could result in a substantial bill that would hinder your progress. In an ideal scenario, you should always be conservative by trying to keep your ad sales cost below your target margin.

To illustrate with an example, if you buy your product for £5 and spend (purchase) another £5 on fees (FBA), shipping and other costs, the total cost of your product will be £10. If you sell your product for £20, you need to ensure that your Amazon PPC cost for that product is less than £10. The reason being, if you spend above the £10 profit margin, the purpose of advertising defeats the purpose of selling at a profit. The key to success is to advertise and sell without making a loss.

3. Optimise Listing Before the PPC Campaign

Before you set your ad campaign live, you must optimise your product listing to Amazon's search requirements. Without a clear optimising strategy, your ad will not be able to bring the results you wish for. Optimisation of keywords, including keyword targeting, should be the primary focus before you begin PPC on Amazon. Review each search term on the relevant product pages. The product details should contain all relevant keywords to increase the chances of appearing on the product listing page following a search term. You may need to consult a professional Amazon marketing agency for expert advice if you are unsure how to focus on keywords and optimisation.

The second is to optimise the content of your product listing. From relevant images to catchy product descriptions, you need to ensure your items appeal to both Amazon's search bot and the Amazon customers searching for products.

Final Thoughts

Amazon offers a range of PPC advertising options designed to meet the diverse needs and goals of various businesses. Sponsored brands enhance brand visibility through rich display and video creatives, while sponsored products provide straightforward cost-per-click ads for promoting individual products across Amazon and other platforms.

Sponsored display extends reach on Amazon and beyond, leveraging machine learning for effective multi-format ads across various apps and websites. These are all aimed at potential customers.

As you have seen above, there are three main strategies you must consider when setting up an Amazon PPC advertising campaign. It's also crucial to adhere to Amazon's policies and guidelines while executing PPC campaigns. Clear objectives, comprehensive keyword research, such as using the Amazon keyword research tool, and strategic budgeting are fundamental to achieving campaign success.

Whether aiming to boost sales/revenue or enhance brand awareness, optimising product listings and seeking expert guidance can maximise PPC effectiveness on Amazon, ensuring sustainable growth, sales and profitability. Your success will ultimately depend on your research, understanding of the platform's requirements and how you execute them.

For further guidance on navigating Amazon's advertising landscape, consider consulting with an experienced Amazon marketing agency like Kangaroo UK to tailor strategies that align with your business objectives and drive impactful results.