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Amazon PPC Quick Start Guide – Sponsored Products

PPC advertising is an essential ingredient for success on Amazon’s highly competitive marketplace. Here’s how to master Sponsored Product Ads to boost visibility and make more sales for your brand!

  • April 20, 2023
  • /
  • Brian R. Johnson
downtown city scene with a lot of very bright advertising lights

I’ve searched the web, and there are a lot of lengthy, 6000-word “Ultimate PPC Guides” that have a tendency to make my eyes glaze over, (and I like to read about Amazon PPC). 

That’s why this post is going to keep things simple and concentrate on the one Amazon ad type that you’re most likely to start with, Sponsored Products. If you want to jump ahead and learn about Amazon Sponsored Brand Ads, or Amazon Sponsored Display, they’re all part of this same, three-part series on Amazon Advertising. 

To begin with, let’s say you’ve already got a great product on your Amazon Store. You’ve done your research and know that there’s a solid market for that product. People WANT to buy it! Why would you have to think about spending your hard-earned money on Amazon pay per click (PPC) advertising in the first place?

Here’s the thing. 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 pull their credit card out. Keep in mind that one big reason Jeff Bezos has all that money in the bank is because his company, Amazon, is great at matching buyers with sellers.

You’re Not Alone on Amazon

There are now over 9.7 million Amazon sellers worldwide

Many of those Amazon sellers are using very similar strategies.

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

product. 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. However, 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.

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, the advertiser only pays Amazon when you click on the ad. If you are running Amazon PPC campaigns, you will not have to pay for impressions. 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 sellers to track the sales that their 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 . . .

How Does the Amazon PPC Auction Work?

The cost per click (CPC) for each Amazon PPC ad is determined in an auction. Potential advertisers (that’s you) submit bids (in dollars and cents) for the ad and the placement.

Amazon then awards the highest bidder the right to the best ad position. The winner (highest bidder) pays one cent more than the next-highest bid.

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 sellers get their 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 for an Amazon seller 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:

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.

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 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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