Back to Resources

Let’s imagine that you already have a great Amazon product. You’ve done your research and know that there’s a solid market for that product. Maybe you’re already making sales.

People WANT to buy it!

Wondering why you need to spend your hard-earned money on Amazon pay per click (PPC) advertising in the first place?

Amazon is not just a huge marketplace, it’s also the world’s most powerful, sales-oriented search engine. 

Look at it this way…

On Google, there may be a number of reasons why someone is using a particular keyword in a search. They might be writing a blog post, finishing a school assignment, or doing research for a new patent. 

If they’re searching for that same keyword on Amazon, it’s because they’re ready to buy.

But . . .

You’re Not Alone on Amazon

There are now over 9.7 million Amazon sellers worldwide. 

A large percentage of those sellers are watching the same videos and signing up for seemingly-cloned courses in their quest to make it onto Amazon’s first page.

As we’ve written in this blog post, Amazon is perfectly happy if everyone is a little bit successful. After all, they are going to get paid one way or the other. However, you are uniquely focused on your own success. 

You are in COMPETITION with the rest of the sellers in your niche.

A first step for Amazon sellers is to make sure that your product is fully optimized. That’s the best way to stand out from the competition. 

Once you’ve done that, you need to advertise your product so that prospective buyers actually see it. Studies have shown that Amazon PPC ad campaigns are 41% more effective for driving brand awareness than cross-media campaigns that don’t include Amazon ads.

That’s where Amazon pay per click advertising comes in.

What is PPC Advertising? 

Amazon Pay-per-Click (PPC) advertising is part of Amazon’s internal advertising system. Using Amazon PPC, third-party sellers, brands, and agencies bid for specific keywords, products or categories to create advertisements for their products. 

These advertisements then show up in Amazon’s search results and competitor product listings. With the pay-per-click model, you (as the advertiser) only pay Amazon when a shopper clicks on the ad. When a PPC campaign is managed and optimized well, it can significantly boost the product’s visibility and sales.

Amazon Sponsored Ads are not only very effective, they also allow you to track the sales that your ads generate in order to identify which specific ads are driving conversions. That helps you more clearly understand what segment to double down on and SAVES you Amazon ad dollars. 

Unfortunately, Amazon digital marketing can also feel overwhelming in the beginning. With multiple strategies as well as ad and campaign types, it’s sometimes difficult to determine how to allocate your ad spend. 

To begin with, let’s look closer at those keywords that you’re bidding on. How do you find the best ones?

How to Find the Best Performing Amazon Keywords

It starts with research. 

Amazon keyword research is the process of identifying and analyzing the specific words and phrases that potential customers use when searching for products on Amazon’s platform. The goal is to optimize product listings and advertising campaigns to improve visibility and increase sales.

For many sellers, the process begins with analyzing Amazon’s Search Term Report and auto-complete suggestions to pinpoint high-performing keywords, particularly those leading to sales and high click-through rates. In a lot of cases, it is complemented by examining competitor listings using tools like Helium 10 or Jungle Scout to uncover successful keywords and identify potential gaps in the market. 

To get started, dig into customer reviews of both your own and competitors’ products to look at the common phrases and natural language terms used by customers. You can also incorporate those terms into keyword strategies for more authentic, real-time product targeting.

How Does the Amazon PPC Auction Work?

The cost per click (CPC) for each Amazon PPC ad is determined through a dynamic auction process where you, as the advertiser bids on specific keywords relevant to your products. 

Here’s how it works:

1. Begin by selecting keywords you want to target and set a maximum bid amount for each keyword.

2. When an Amazon shopper searches using one of these keywords, Amazon’s algorithm triggers an instantaneous auction.

3. Amazon’s algorithm considers factors such as bid amount, ad relevance, and historical performance to determine ad placement.

4. Amazon then awards the top ad positions to the highest-ranking bidders for that particular keyword.

5. The winning Amazon advertiser pays one cent more than the next-highest bid. This is known as a second-price auction model.

For example, if you bid $1.00 on a keyword and the next highest bid is $1.25, you would win the auction but only pay $1.26 per click. This system helps encourage competitive bidding while establishing a fair baseline price for ad placements.

Amazon PPC Vocabulary 101

Amazon PPC comes complete with its own language. These are a few terms that you need to know before we look more closely at Amazon Sponsored Product Ads. 

– Advertising Cost of Sales (ACoS)

This reflects the percentage of attributed sales spent on advertising. It’s calculated by dividing total ad spend by attributed sales. For example, if you spent $8 on advertising resulting in attributed sales of $40, your ACoS would be 20% ($8/$40 = 0.20).

– Automatic Ad Campaign

With an automatic ad campaign, Amazon selects (for you) the keywords they think that you should target based on the information in your Amazon product listing: (title, bullet points, description, and keyword search terms). 

– Attributed Sales 

Sales attribution tells you which specific ads are driving sales. It is a reflection of the total dollar value of your brand’s products sold to shoppers within 14 days of them clicking on your ad.

– Clicks

The number of times your ads were clicked. 

– Click-Through Rate (CTR)

The number of clicks on your links divided by the number of impressions, expressed as a percentage. For example, if your links got 50 clicks for 1000 impressions, your click-through rate would be 50/1000 = 0.05, or 5%.

– Impressions

The number of times your ads were displayed. 

– Keyword bid

The maximum cost you are willing to pay when someone clicks your ad. 

– Manual ad campaign

The seller chooses the keywords to be targeted in the ads.

– Sponsored Product ads

These are cost-per-click (CPC) ads that promote individual product listings on Amazon.

– Sponsored Brand ads

These are cost-per-click (CPC) ads that feature a brand logo, a custom headline, and multiple products.

– Sponsored Display ads

Amazon’s latest ad product, these are cost-per-click (CPC) ads that allows brands to reach their audience with advanced product and category targeting, including ads that appear both on and off Amazon.

Getting Started With Sponsored Product Ads

If you’re just beginning your PPC campaign, Sponsored Product Ads will likely be the ad type you use, and it’s a good idea to master them before you move on to Sponsored Brand and Sponsored Display Ads.

Sponsored Product Ads help you get your product listings in front of shoppers searching for similar products. With this ad type, buyers will discover and purchase your products that appear on product pages or in shopping results.

An advantage of this ad type is that they don’t look like an ad, except for the tiny “Sponsored” tag at the top of the listing. They fit perfectly into relevant search results and help to enhance shoppers’ experience (rather than distract from that experience).

An Amazon Sponsored Product Ad can appear in two locations on Amazon: above, below, or among search results and on Amazon product detail pages as part of an ad carousel either near the top or further down the page.

Because of this, Amazon Sponsored Products are versatile and can be used to achieve a range of marketing goals such as:

• Driving traffic to product listings
• Generating sales
• Launching new products
• Clearing excess inventory

3 Big Reasons to Use Sponsored Product Ads 

1. They’re easy to create. You don’t need specific advertising or creative skills to get started. A Sponsored Products Ad generates ads from your own product listings and offers automatic targeting so you can begin advertising with no experience necessary.
2. You can control your costs. A Sponsored Ad is cost-per-click (CPC), so you only pay when customers click your ads. Choose how much to bid per click and set your own budget.
3. Use them to track your success. Take advantage of sales and performance metrics to measure the direct impact of your ads on your business.That information is how beginning Amazon PPC advertisers can become experts.

Who Can Use Sponsored Product Ads?

Amazon Sponsored Product Ads are self-service ads that you can manage yourself or hand off to an experienced Amazon advertising agency or consultant. 

Sponsored Product Ads are available for anyone selling on Amazon, including vendors, professional sellers, brands, agencies, book vendors, and Kindle Direct Publishing (KDP) authors.

How Much Do Sponsored Product Ads Cost?

The cost-per-click for Amazon PPC ads typically ranges from $0.02- $3.00. However, the CPC can vary greatly depending on the product category, marketplace, and ad type. The cost moves up and down depending on the level of competition in your niche or for a particular placement.

An Amazon Sponsored Product Ad is the backbone of Amazon advertising. They’re able to support most advertising goals and can be extremely profitable if you know how to use them. That versatility is why many Amazon experts recommend putting up to 70% of your total ad budget into SPAs.

Next-Level PPC Strategies

As Amazon’s marketplace becomes increasingly competitive, clever sellers are turning to advanced Pay-Per-Click (PPC) strategies – or in many cases, Amazon PPC agencies – to gain an edge. 

These next-level techniques go beyond basic keyword bidding and campaign structuring, offering more nuanced ways to optimize ad performance and maximize return on investment. By leveraging data-driven insights and Amazon’s sophisticated targeting options, you can fine-tune your campaigns for peak efficiency and effectiveness. 

Advanced strategies such as dayparting, negative keyword optimization, and product targeting allow you to fine-tune your campaigns, maximize ad spend efficiency, and adapt to Amazon’s evolving algorithm. These advanced techniques make it more likely that you can stay ahead of your competitors, and greatly improve your return on ad spend (ROAS. 

In 2024, simply bidding on keywords is often not enough to guarantee success.

What is Dayparting?

Dayparting is a sophisticated Amazon PPC strategy that involves adjusting ad schedules – sometimes by the minute – based on peak shopping hours. As artificial intelligence has become more sophisticated, dayparting has become an important component of an overall ad campaign strategy. 

By analyzing hourly sales data and considering industry-specific trends, you’re able to identify the most profitable times to run ads. Using Amazon’s dayparting features or third-party tools, you can create time-based campaigns with tailored bid strategies, maximizing ad spend efficiency during high-conversion periods.

How Does Negative Keyword Optimization Work?

Negative keyword optimization helps refine ad targeting and reduces wasted ad spend. This process involves regularly reviewing Search Term Reports to identify irrelevant search terms that trigger ads but don’t lead to conversions. As an advertiser, you can implement negative exact, phrase, and broad match types to exclude these terms, ensuring ads are shown only to the most relevant audience. However, caution is needed when using broad match negatives to avoid over-restricting ad visibility.

Drill Down With Product Targeting Strategies

Product targeting strategies offer a powerful way to reach specific customer segments. ASIN targeting makes it possible for your ads to show alongside complementary products or competitor listings, capturing comparison shoppers. 

Category targeting increases visibility within relevant product categories, with refined options like price filters for precision. Brand targeting lets you play defense, attracting customers from your competitors while leveraging the popularity of well-known brands in your category.

How Canopy Management Can Help

As Amazon’s marketplace becomes increasingly competitive, Amazon advertising has grown in complexity. It’s no longer enough to have “good business instincts” as many entrepreneurs do. 

It’s a different ballgame now. 

That’s why many experienced Amazon sellers reach out to the team at Canopy Management. Our expert Amazon Creative Services, PPC and DSP pros are a big part of why Canopy partners show an 84% average profit increase. 

Want to be part of the Canopy Tribe? Find out more right here. 

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.”

• Strategic Growth Planning
• Listing Copywriting Optimization
• Listing Photography
• Product Videography
• Advertising Management
• Customer Service
• Demand Side Platform (Amazon DSP)
• Amazon Posts
• Full Service Management
• Amazon Review Aggregation