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A 2023 Step-by-Step Guide To Amazon PPC

A 2023 Step-by-Step Guide To Amazon PPC

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Amazon remains a dominant force in e-commerce with over 2.5 million active sellers worldwide and net sales revenue of over $514 billion in 2022. As more and more businesses turn to Amazon to sell their products, competition for visibility and sales on the platform has become increasingly fierce. That’s where Amazon PPC (Pay-Per-Click) advertising comes in.

Amazon PPC allows sellers to bid on keywords and target specific audiences to increase visibility and drive sales on the platform. According to a recent study, Amazon PPC ads account for 10% of all e-commerce ad spend in the United States, with advertisers projected to spend $16.69 billion on the platform in 2023.

If you’re a seller on Amazon, incorporating PPC advertising into your overall selling strategy can be a game-changer for your business. But where do you start? In this 2023 step-by-step guide, we’ll walk you through everything you need to know to launch and optimise successful Amazon PPC campaigns. From understanding the auction system and selecting the right keywords to create compelling ads and analysing performance data, we’ve got you covered. Let’s get started!

How does Amazon PPC work?

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Amazon PPC (Pay-Per-Click) has evolved into a significant marketing tool for sellers. It is a form of advertising where advertisers pay for each click on their ad on Amazon. The ads appear on search results, product detail pages, and other relevant pages on the Amazon website. The Amazon PPC system works on an auction-based model, where advertisers bid on specific keywords or product categories they want to target. Let’s explore the steps in detail.

  • Campaign Creation – To start a campaign, head to your Amazon Seller Central account and choose the campaign type you want to run: sponsored products, sponsored brands, or sponsored display. Sponsored products are ads that appear on search results and product detail pages. Sponsored brands are ads that appear at the top of search results and feature your brand logo and multiple products. Sponsored display ads are shown on Amazon product detail pages and can feature your product or other complementary products.

Once you’ve chosen your campaign type, select the products you want to advertise and set a daily budget for your campaign. Your daily budget is the maximum amount you’re willing to spend on advertising in a day.

  • Keyword Selection – Next, choose the keywords you want to target for your ads. You can use Amazon’s suggested keywords, your own keywords, or a combination of both. Make sure to choose keywords that are relevant to your product and that potential customer might use to search for it. You can also add negative keywords, which are keywords you don’t want your ads to show up for.
  • Ad Creation – Now it’s time to create your ad. Sponsored products and sponsored brands have a specific ad format, while sponsored display ads have multiple formats to choose from. Choose the ad format that works best for your product and audience. Then, create the ad copy and choose the images you want to use. Make sure your ad is visually appealing and provides all the necessary information about your product.
  • Bidding – Set the maximum amount you’re willing to pay for each click on your ad. This is called the cost-per-click (CPC) bid. The higher your bid, the more likely your ad will be displayed in the search results or product detail pages. You can adjust your bid as needed to stay competitive.
  • Ad Placement – Amazon uses a complex algorithm to determine which ads are shown for each search query. Factors such as bid amount, relevance, and the historical performance of the ad are taken into consideration. The ad is displayed in the search results or product detail pages when a user searches for a keyword related to the ad.
  • Pay-Per-Click – You only pay when someone clicks on your ad. The cost of the click is equal to the CPC bid. If your daily budget is reached, your ad stops showing for the rest of the day.

Let’s elucidate this with an example. Say you’re selling organic skincare products on Amazon and you want to increase sales for a specific product. You create a sponsored product campaign and choose the product you want to advertise. You then select keywords such as ‘organic skincare,’ ‘natural beauty,’ and ‘vegan skincare’ to target. You create an ad with images of your skincare product and a headline that says ‘Get Glowing Skin with Our Organic Skincare Products.’ You set a CPC bid of $1.50 and a daily budget of $50.00.

When someone searches for ‘organic skincare’ on Amazon, your ad appears in the search results. If someone clicks on your ad, you’re charged $1.50. If 33 people click on your ad in a day, your total cost for that day is $49.50. Once you hit the daily budget, the ad stops showing up for the day.

Methods of Amazon Pay-Per-Click Advertising

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Let’s explore the different methods of Amazon PPC advertising, including Sponsored Products, Sponsored Brands, and Sponsored Displays, and provide examples of how each can be used to achieve advertising success.

  • Sponsored Products – Sponsored Products are the most common type of Amazon PPC advertising. These ads appear within Amazon search results and on product detail pages and are targeted based on specific keywords. When a shopper clicks on a Sponsored Product ad, they are taken directly to the product detail page. Say for instance you sell running shoes; you could create a Sponsored Products campaign targeting the keyword ‘running shoes’. When a shopper searches for ‘running shoes’ on Amazon, your ad will appear in the search results. Once the shopper clicks on your ad and purchases your product, you will pay Amazon a fee for the click.
  • Sponsored Brands – Sponsored Brands are a type of Amazon PPC advertising that allows businesses to promote their brand and products. These ads appear at the top of Amazon search results and feature a custom headline, logo, and multiple products. When a shopper clicks on a Sponsored Brands ad, they are taken to a custom landing page featuring your brand and products. For example, if you sell outdoor gear, you could create a Sponsored Brands campaign featuring your brand name, logo, and a selection of your top-selling products. When a shopper searches for ‘hiking gear’ on Amazon, your ad will appear at the top of the search results. If the shopper clicks on your ad and purchases one of your products, you will pay Amazon a fee for the click.
  • Sponsored Display – Sponsored Display is a type of Amazon PPC advertising that allows businesses to reach shoppers both on and off Amazon. These ads can appear on product detail pages, customer review pages, and even on other websites through Amazon’s advertising network. Amazon Sponsored Display ads can be targeted based on interests, behaviours, and even specific products. For example, if you sell pet toys, you could create a Sponsored Display campaign targeting shoppers who have recently purchased pet food on Amazon. When a shopper views a product detail page for pet food, your ad will appear on the page promoting your pet toys. If the shopper clicks on your ad and purchases one of your products, you will pay for the click.
  • Amazon PPC advertising offers businesses a variety of methods for promoting their products and reaching new customers. By leveraging the power of Sponsored Products, Sponsored Brands, and Sponsored Displays, businesses can increase visibility, drive sales, and achieve advertising success on the world’s largest online marketplace. It is important to carefully plan your campaigns, monitor your data, and optimise your bids and targeting for the best possible results.

Best Amazon PPC Strategies

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As more and more sellers join Amazon, it’s becoming increasingly difficult to stand out from the crowd and achieve advertising success. Let’s check out some of the best Amazon PPC strategies to help you get the most out of your advertising budget and drive more sales.

  • Start with automatic targeting – When creating your Amazon PPC campaigns, start with automatic targeting. This will allow Amazon’s algorithm to determine the best keywords to target based on your product listing, search terms, and sales history. Automatic targeting is a great way to discover new keywords and gather data on which ones are driving clicks and conversions.
  • Use manual targeting – Once you have gathered data from your automatic targeting campaign, use that data to create a manual targeting campaign. In manual targeting, you choose the keywords you want to target and set bids for each keyword. This allows you to have more control over your ad spend and target the keywords that are most relevant to your product.
  • Use negative keywords – Adding negative keywords to your campaigns is an important step in any Amazon PPC strategy. Negative keywords are search terms that you don’t want your ads to appear for. By adding negative keywords, you can prevent your ads from showing up for irrelevant or low-converting search terms, which can help you reduce your ad spend and increase your conversion rate.
  • Optimise your product listing – Optimising your product listing is a critical part of any Amazon PPC strategy. Your product listing should be clear, concise, and include high-quality images. Make sure your product title includes relevant keywords and your product description provides detailed information about your product. The more information you provide, the better chance you have of converting a shopper into a customer.
  • Monitor your campaigns regularly – It’s important to monitor your Amazon PPC campaigns regularly to ensure they are performing well. Check your data on a daily or weekly basis and adjust your bids and targeting as needed. This will help you stay on top of any changes in the market and achieve great results with effective Amazon PPC optimisation.
  • Test and iterate – Finally, one of the best Amazon PPC strategies is to test and iterate. Try different targeting strategies, bid amounts, and ad formats to see what works best for your product. Use A/B testing to test different ad copy and images to see which ones drive the most clicks and conversions. By constantly testing and iterating, you can optimise PPC campaigns on Amazon for maximum success.

Calculating Amazon PPC cost and CPC considerations

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The cost of Amazon PPC advertising is calculated based on the amount of competition for specific keywords and the bids that advertisers place on those keywords. The cost is determined by a bidding system, where advertisers compete against each other to have their ads displayed for specific keywords. The advertiser with the highest bid and most relevant ad is typically shown to the shopper.

To calculate the cost of Amazon PPC advertising, you need to take into account the CPC bid and the number of clicks generated by the ad. For example, if you bid $1.00 for a specific keyword and generate 100 clicks, your total cost for that ad campaign would be $100. Managing CPC bids effectively is key to running successful Amazon PPC campaigns.

How to curtail Amazon PPC ad spend?

As an Amazon seller, it’s important to continually evaluate your advertising strategy and find ways to cut your ad spend while maintaining or improving your results. Amazon PPC (Pay-Per-Click) advertising can be a powerful tool for driving sales and increasing product visibility, but it can also be expensive if not managed properly. Here are some tips and strategies to help you cut your ad spend on Amazon PPC without sacrificing your advertising goals.

  • Analyse your campaign data – One of the most important steps in reducing your Amazon PPC ad spend is to regularly analyse your campaign data. Look for keywords that are not performing well and either remove them from your campaigns or reduce your bid on those keywords. This will help you focus your ad spend on keywords that are more likely to result in clicks and conversions.
  • Use negative keywords – Negative keywords are search terms that you don’t want your ads to appear for. By adding negative keywords to your campaigns, you can prevent your ads from showing up for irrelevant or low-converting search terms, which can help you reduce your ad spend. For example, if you sell high-end running shoes, you might want to add “cheap running shoes” as a negative keyword. This will prevent your ads from appearing when someone searches for cheap running shoes, which is unlikely to result in a sale.
  • Refine your targeting – Another way to reduce your Amazon PPC ad spend is to refine your targeting. Instead of targeting broad keywords that could be relevant to a wide range of shoppers, try targeting more specific keywords that are more likely to be used by shoppers who are ready to buy.
  • Adjust your bids – Adjusting your bids is another effective way to cut your ad spend on Amazon PPC. Look at your campaign data and identify keywords that are performing well but have a high cost per click (CPC). Lowering your bid on these keywords can help you reduce your ad spend without sacrificing clicks or conversions.
  • Improve your product listing – Finally, improving your product listing can help you reduce your Amazon PPC ad spend by increasing your organic visibility. By optimising your product title, description, and images, you can improve your search rankings and attract more organic traffic to your listings. This can help you reduce your reliance on paid advertising and cut your ad spend over time.

Amazon PPC – Key Requirements

Amazon PPC advertising can be a highly effective way to boost your product visibility and drive sales on Amazon. However, before you can start running ads on Amazon, there are certain requirements you need to meet. Let’s discuss them.

  • An Amazon Seller Account – To run Amazon PPC ads, you need to have an Amazon Seller Account. You can either sign up for an Individual Seller Account or a Professional Seller Account. The Individual Seller Account is suitable for small businesses and sellers who are just starting, while the Professional Seller Account is ideal for larger businesses.
  • A Product Listing on Amazon – To advertise on Amazon, you need to have a product listing on the platform. This means that you need to have a product that is already listed on Amazon and available for purchase. If you haven’t created a product listing yet, you need to do that before you can start running ads.
  • A Budget for Advertising – Amazon PPC ads are pay-per-click, which means that you only pay when someone clicks on your ad. However, you still need to have a budget for advertising. You can set a daily or monthly budget for your ads, and Amazon will automatically stop showing your ads once your budget is exhausted.
  • Amazon Keyword Research and Optimisation – Keywords are the foundation of Amazon PPC advertising. You need to do thorough keyword research to identify the most relevant and high-traffic keywords for your products. Once you have your keywords, you need to optimise your product listing and ad campaigns accordingly.
  • Compelling Ad Images – Your ad images play a crucial role in the success of your Amazon PPC campaigns. You need to create a compelling ad that communicates the value proposition of your product. You also need to have high-quality product images that showcase your product in the best possible light.
  • A Strategy for Managing and Optimising Your Ads – Running successful Amazon PPC campaigns requires ongoing management and optimisation. You need to regularly monitor your ad performance, adjust your bids and budgets, and optimise your ad copy and targeting. It’s also important to keep up-to-date with the latest Amazon PPC trends and best practices.

Use of Amazon PPC to accomplish various advertising goals

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Amazon PPC (Pay-Per-Click) can help businesses of all sizes increase visibility, drive traffic, and generate sales on the world’s largest online marketplace. Here are some examples of how Amazon PPC can be used to achieve different advertising goals:

  • Product Launches – If you’re launching a new product on Amazon, using Amazon PPC can help you gain visibility and generate sales from the outset. You can bid on relevant keywords and target your ads to specific audiences to drive traffic to your product listing. This can help you quickly establish a sales history and improve your organic search ranking over time.
  • Seasonal Promotions – Running seasonal promotions can be an effective way to increase sales during peak shopping periods. Amazon PPC allows you to create custom ads that promote discounts or limited-time offers, which can help you capture the attention of shoppers and drive conversions.
  • Brand Awareness – If you’re a new brand on Amazon or looking to build brand awareness, Amazon PPC can help you reach a wider audience. By bidding on keywords that are related to your brand or industry, you can target shoppers who are searching for products like yours. This can help you increase visibility and generate interest in your brand over time.
  • Targeting Competitors – Amazon PPC can also be used to target your competitors’ customers. By bidding on keywords that are related to your competitors’ products, you can reach shoppers who are searching for similar products and entice them to try your brand instead. This can be an effective way to steal market share and grow your customer base.
  • Retargeting – Retargeting is a strategy that involves showing ads to shoppers who have previously interacted with your brand. Amazon PPC allows you to retarget shoppers who have viewed your product listing or added items to their cart but didn’t complete a purchase. By showing them targeted ads, you can encourage them to return to your listing and complete the purchase.

Amazon PPC is a versatile advertising tool that can be used to achieve a wide range of advertising goals. It offers a range of options and tools to help you optimise your advertising spend and achieve your advertising goals.

Amazon PPC terms you need to know

Here are some key Amazon PPC terms you should know:

  • Campaign: A group of ad groups that share a budget, schedule, and targeting settings.
  • Ad group: A collection of keywords, ads, and landing pages that are focused on a specific theme or product.
  • Keyword: A word or phrase that shoppers enter into the Amazon search bar to find products.
  • Bid: The amount you are willing to pay for a click on your ad.
  • Click-through rate (CTR): The percentage of shoppers who click on your ad after seeing it.
  • Cost per click (CPC): The amount you pay each time someone clicks on your ad.

Amazon Key Performance Indicators (KPIs)

Some key performance indicators (KPIs) you should monitor when running Amazon PPC campaigns:

  • Sales: The total amount of revenue generated from your ads.
  • Advertising cost of sales (ACoS): The ratio of advertising spend to sales. This metric helps you determine how cost-effective your campaigns are.
  • Click-through rate (CTR): The percentage of shoppers who click on your ad after seeing it.
  • Cost per click (CPC): The amount you pay each time someone clicks on your ad.
  • Impressions: The number of times your Amazon shows shoppers your Ad, regardless of whether it’s clicked or not. 

Top benefits of using Amazon PPC Ads

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Using Amazon PPC ads can bring a wide range of benefits to sellers looking to increase their sales and visibility on the platform. Here are some benefits to consider:

  • Increased Visibility – Amazon PPC ads allow you to appear at the top of search results and in sponsored product listings, increasing your visibility and brand recognition. This can lead to more clicks, more sales, and more loyal customers.
  • Greater Control – With Amazon PPC, you have full control over your ad campaigns, including your budget, target keywords, and bid amounts. This allows you to optimise your ads for maximum ROI and better target your ideal customers.
  • Faster Results – Unlike organic Amazon rankings, which can take weeks or months to improve, Amazon PPC ads can generate immediate results. This means you can start seeing increased sales and visibility almost immediately after launching your ads.
  • Cost-Effective – Amazon PPC can be a cost-effective way to advertise your products. With the ability to set your own budgets and bid amounts, you can control your ad spend and ensure that you’re getting the most out of your advertising dollars.
  • Increased Sales – By appearing at the top of search results and in sponsored product listings, you’ll be more likely to get clicks and sales. This can lead to increased revenue and profitability for your business.
  • Better Data Insights – Amazon PPC provides valuable data insights that can help you optimise your advertising campaigns and make better business decisions. You can track metrics like click-through rates, conversion rates, and cost per click to gain a deeper understanding of your audience and how to reach them effectively.

Should you manage your Amazon PPC or outsource to an agency?

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As a seller on Amazon, you have many responsibilities to take care of, including managing your Amazon PPC campaigns. However, as your business grows, you may find it challenging to manage your Amazon PPC campaigns effectively while handling other aspects of your business. This is where the decision to outsource your Amazon PPC management to an agency comes in. Let us explore the option to help you make an informed decision.

Managing your Amazon PPC in-house has some inherent drawbacks:

  • Time-Consuming – Managing your Amazon PPC campaigns takes time; this can take you away from other aspects of your business that need your attention.
  • Lack of Expertise – Unless you have experience in managing PPC campaigns, you may not know how to optimise your campaigns effectively.
  • Limited Tools and Resources – Amazon PPC management requires access to specialised tools and resources that may not be available to you in-house.

Outsourcing Your Amazon PPC Management to an Agency:

Outsourcing your Amazon PPC management to an agency like eStore Factory means that you’ll partner with a team of PPC experts who will manage your campaigns for you. Here are some benefits of availing Amazon PPC services from an Amazon agency:

  • Access to Expertise – An experienced Amazon account management agency has the knowledge and expertise to optimise your campaigns for maximum ROI.
  • Time-Saving – By outsourcing your Amazon PPC management, you’ll have more time to focus on other aspects of your business.
  • Advanced Tools and Resources – PPC agencies have access to advanced tools and resources that can help them optimise your campaigns more effectively.

If you lack the expertise or time to manage your campaigns effectively, outsourcing to a PPC agency can be a valuable investment in the growth of your business. Ultimately, the decision is yours, and you should weigh the pros and cons before making a choice.

Takeaways

When it comes to running successful Amazon PPC campaigns, it’s important to regularly monitor your ad performance, adjust your bids and budgets, and optimise your ad targeting. Keeping up-to-date with the latest Amazon PPC trends and best practices can also help you stay ahead of the competition and drive better results.

In addition to the benefits of increased visibility and sales, Amazon PPC advertising can also provide valuable insights into your customers’ behaviour and preferences. By analysing your ad performance data, you can gain a better understanding of what works and what doesn’t, and use that information to inform your overall Amazon selling strategy.

Whether you choose to manage your Amazon PPC campaigns in-house or outsource to an agency, it’s important to have a solid understanding of the platform’s requirements and best practices. With the right approach and ongoing optimisation, Amazon PPC advertising can be a powerful tool for growing your business and driving long-term success on the platform.

About The Author

Jimi Patel

Jimi Patel, is a Co-founder and CEO at eStore Factory, an Amazon SPN certified agency that serves as a one-stop solution for all your Amazon business needs. Having helped countless brands increase sales and grow their footprint on Amazon, Jimi provides the most practical and effective solutions for your business. He is highly skilled in developing and executing plans that align with your specific business goals and objectives. When not working, Jimi enjoys practicing yoga and traveling to new places. He is an avid reader and enjoys staying up-to-date on the latest trends and developments in the e-commerce industry.