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Amazon Advertising: The Beginner’s Guide to Profitable PPC Campaigns

This Step-by-Step Amazon Roadmap for Online Sellers Shows You How to Get Started with Pay per Click Advertising

  • May 21, 2024
  • /
  • CANOPY Management
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Amazon Pay-Per-Click (PPC) advertising offers businesses an incredible opportunity to enhance visibility, drive sales, and boost brand awareness. Utilizing Amazon’s advertising solutions can help you reach more customers and maximize your sales potential. 

If you’re just getting started, navigating the complexities of Amazon PPC can be a challenge. The rewards however, are significant.

This guide is designed to demystify Amazon PPC for new sellers or those struggling with their current PPC strategies, and to provide a clear pathway to profitable campaigns.

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What is Amazon Pay per Click (PPC) Advertising? 

Amazon Ads is an advertising model on Amazon where advertisers pay a fee each time their ad is clicked. It allows sellers to create and display pay-per-click ads for their products in prominent positions on Amazon’s search results and product detail pages.

These ads include Sponsored Products, Sponsored Brands, and Sponsored Display ads. They help increase visibility, drive traffic, and boost sales by targeting specific keywords that browsers use in their search queries, individual products, and customer interests.

What are the Main Benefits of Amazon Advertising

  1. High Intent Audience: People on Amazon are ready to buy, making it an excellent platform for converting clicks into sales. PPC ads can significantly drive ad sales, contributing to overall sales success.
  2. Increased Visibility: Sponsored Products and Sponsored Brands ads appear in prominent positions on search results and product detail pages, enhancing visibility. This increased visibility can improve organic rankings, leading to better product placement and higher sales.
  3. Targeting Capabilities: Amazon PPC allows for precise targeting based on keywords, products, and customer interests, which helps in reaching the right audience.
  4. Scalability: You can start with a small budget and scale up as you see results.
  5. Measurable Results: Amazon provides detailed analytics, allowing you to track performance and optimize campaigns for better results.

Choosing Your Amazon Ads Campaign Structure

As mentioned above, Amazon offers three main types of PPC ads: Sponsored Products, Sponsored Brands, and Sponsored Display ads.

Running a Sponsored Products campaign can significantly boost your product’s visibility and sales by appearing in prominent positions on Amazon.

For beginners, starting with Sponsored Products is recommended. They are straightforward to set up, manage, and yield immediate insights into what works and what doesn’t.

A large colorful pile of keys signifying the process of keyword research

Conducting Comprehensive Keyword Research

Keywords are the backbone of a successful Amazon advertising campaign. Begin by using Amazon’s search bar to find relevant keywords. It’s easy enough to simply start typing a product-related term and see what auto-suggestions appear. These suggestions are based on actual search queries by Amazon users.

For more in-depth research, software tools from companies such as Helium 10 and Jungle Scout are helpful. They make it easier to identify high-traffic keywords, understand competition, and find long-tail keywords. 

Long-tail keywords, which are more specific and less competitive, can significantly boost your campaign’s effectiveness. Incorporate a mix of broad, phrase, and exact match keywords to capture a wide yet targeted audience.

Optimizing Your Amazon Product Listings 

Compelling listing copy is essential to attract clicks and drive conversions. The effectiveness of your listing copy directly impacts your click-through rates (CTR) and conversions. Ensure the ad highlights the key benefits and unique selling points of the product.

Optimizing the product detail page is crucial to engage readers, speak directly to customers, and maximize visibility through advertising campaigns.

Because a successful PPC campaign relies heavily on optimized product listings, you want to ensure that your listings are clear, concise, and include relevant keywords. Well-crafted product titles, detailed descriptions, high-quality images, and positive reviews all play crucial roles in PPC performance. Ensure that:

Setting Your Bid Guidelines

To begin, you’ll probably start with Amazon Sponsored Product Ads. Here is a process for setting up bid guidelines for that ad type:

  1. Determine your target ACoS (Advertising Cost of Sale). This is the percent of sales you are willing to spend on ads. Although it varies by product margins and goals, a common benchmark is 25-30%.
  2. Set your default bid at the ad group level. Start with a bid that is likely to get your ads shown. You can refine this over time.
  3. For high priority, high converting keywords, set a higher bid (50-100%) above your default bid. This helps your ads show up more often for those key terms.
  4. For broader keywords or ones that don’t convert as well, set bids 20-50% below your default bid so you don’t overspend on those terms.
  5. Monitor performance closely, especially in the first few weeks. Adjust bids up or down based on actual ACoS for each keyword compared to your target.
  6. Use bid modifiers to increase bids for high performing placements, such as top of search. Reduce bids for lower performing placements.
  7. Consider using automated bid rules once you have some history. You can set rules to adjust bids automatically based on ACoS or other performance metrics.
  8. Continue monitoring and adjusting bids regularly based on performance. Raise bids on terms meeting your ACoS goals, lower them on terms exceeding it.

The key is having a target ACoS to guide decisions, setting initial bids based on keyword priority, and then optimizing bids frequently based on actual keyword-level ACoS compared to your target. It requires hands-on management, especially early on, to maximize profitability.

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Defining Daily Ad Spend Budgets

Daily budgets dictate how much you are willing to spend per day on your campaigns. Setting these budgets wisely is crucial to avoid overspending.

How to calculate daily budgets:

  1. Determine Your Monthly Budget: Decide how much you are willing to spend per month on Amazon PPC.
  2. Divide by 30: This gives you a starting point for your daily budget.

For example, if your monthly budget is $900, your daily budget would be $30. Monitor your spend regularly and adjust the daily budget based on campaign performance and sales targets.

On any given day you could spend less than your daily budget. Amazon’s average daily budget feature allows you to deal with traffic fluctuations. That way your campaign can spend unused budget throughout the calendar month. 

Closely Study Your Campaign Analytics

Understanding and utilizing Amazon PPC reports is critical for optimizing campaigns.

Key metrics to monitor:

Use these metrics to refine your campaigns. For instance, if the CTR is low, you might need to improve your ad copy or targeting. If ACoS is high, consider adjusting bids or refining keywords.

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Avoiding Common Beginner Mistakes

Common mistakes can derail your PPC efforts. Here are some pitfalls to avoid:

Actionable advice:

Great PPC is a Moving Target – Optimize Continually

Continual optimization is the key to a successful Amazon PPC campaign.

Weekly/Monthly Optimization Checklist:

How Canopy Management Can Help

Amazon PPC can be a game-changer for new sellers, offering a road map to increased visibility and sales. By following this guide, you can set up and manage profitable PPC campaigns. 

If you’d like to take advantage of the kind of help that the top sellers on Amazon have quietly used to get to where they are now, reach out to the Amazon advertising experts at Canopy Management. 

What would adding 67% more organic sales mean for your brand?

Turns out that when you combine the massive experience of Canopy’s Amazon Advertising Experts with smart tools and tech, you get industry-leading results like this:

Canopy Management is a full-service marketing agency for Amazon and Walmart sellers. Our team consists of former Amazonians, multi-million dollar sellers, and award-winning experts.

When you consider the many ways that Canopy Management can help you grow your business, you’ll see why selling on Amazon is much easier “under the Canopy.”

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