Amazon is one of the biggest online stores in the world, with over 300 million shoppers visiting the site every month. This is why it is also one of the best platforms for brands to advertise their products. Amazon PPC advertising allows brands to put their products before their customers and drive sales. Here is a guide on Amazon PPC advertising.
What is Amazon PPC Advertising?
Amazon PPC advertising is an internal program that allows sellers to promote their products on the Amazon marketplace. When using the PPC program, brands leverage keyword research to choose target keywords to use in their ads.
When an Amazon user searches for a product using the keywords, the advertised product appears on the listing. Sellers only pay the advertising fee when a buyer clicks on their products. This program is effective because brands advertise to people who are ready to make a purchase.
How Does Amazon PPC Advertising Work?
To understand how it works, let’s assume that a shopper is looking for a microwave. They use the Amazon search bar to enter the description of their search. Amazon populates its pages with relevant products that meet the keyword “microwave”.
If a seller has won the bid for the keyword microwave, their products will appear in the shopper’s search results and the product page. It will be marked as promoted. When the shopper clicks on the ad, the advertiser pays a small fee.
Understanding the Amazon PPC Metrics
Here are the key terms used for Amazon PPC:
- Advertising cost of sale. This measures the level of efficiency of an ad campaign. It is the cost of a sale that is attributed to advertising. It is obtained by dividing the attributed sale by the cost of advertising. For instance, if we assume that you spent $10 on advertising and got an attributed sales of $50, your advertising cost of sales of $0.2 (10/50)
- Attributed sales. This refers to the number of sales made due to one week of ad clicks. Remember that there may be a delay of up to 48 hours in populating your sales data.
- Impressions. The number of times your ad is put before the eyes of your audience, regardless of whether they click on it.
- Clicks. The number of times people viewing your ads click on it.
- Click-through rate. Refers to the ratio of impressions to clicks in an ad. For instance, if yours gets 200 impressions and 5 buyers click on it, you will have a CTR of 2.5%. You need to understand a good impression to click-through rate figure. You can also read our guide on the causes of a low CTR.
- Cost per Click. This refers to the amount advertisers pay to Amazon when a buyer clicks on the ad.
Types of Amazon PPC Ads
Advertise using the Amazon PPC advertisement can choose from different types of ads such as:
Sponsored products
Most sellers prefer using these types of ads, with over 70% of Amazon advertisers using them. The ads usually appear on the organic search result page and the product listing pages. They often have a sponsored tag on the product. Some of the reasons why it is popular are:
- Mixes well with organic products. The ads in this category appear just like the organic ads and do not impact the buyer’s experience.
- When combined with good keyword research, these ads can result in instant visibility and drive traffic to your recently launched product.
Amazon PPC advertising ads on top of the result page.
Sellers using sponsored products can choose between two targeting options. These are:
Automatic targeting
Amazon can automatically generate keywords for you to target depending on the keywords of your listing. The e-commerce site gathers information from the user and keeps improving bids over time for better targeting and conversion.
This targeting method is a good choice for new products without keywords to target. However, since you will depend on the Amazon algorithm, you will not have much control over your campaigns.
Manual targeting
This offers the seller better control over their ad campaigns. Users of these ads can choose keywords from their automatic campaigns. Alternatively, they can find high-quality, relevant keywords using the Seller App keyword research tool.
What Is The Amazon PPC Advertising Cost?
On average, advertisers pay $0.5 to $10 for Amazon PPC advertising. However, this depends on factors such as the level of competition in your niche, ad targeting type, daily budget, and your bid. For instance, if you are selling a highly competitive product such as the travel K cup machine, you can expect to pay $7.5 for an exact match and $4.5 for a broad match.
On the other hand, a less competitive product, such as a steering assist knob, can have a CPC of $0.35 for the exact match and $0.25 for the broad match. All in all, if your average CPC is high, this can indicate that the niche is competitive.
Your conversion will depend on various factors, such as your target keywords. For the best results, you should ensure that you are targeting the right keywords. On top of that, the conversion will depend on:
- Type of product you are selling
- Listing image
- Price of the product
- The kind of reviews gained
How To Set A Daily Amazon PPC Advertising Budget
If you are getting started, you may find it hard to set a good budget for your Amazon PPC advertising. A good idea is to start with a low budget for your PPC advertising, such as $5 or $10. You can let the campaign run for a few weeks to enable you to gather the necessary data. This will give you an idea of the keywords to target and the ones to bid on.
You should keep watching your campaigns and improving where necessary. Also, keep an eye on your budget. If it runs out, your campaign will be paused. Your daily budget doesn’t matter as long as it is profitable. Furthermore, if you’re knowledgeable about Amazon advertising and eager to share your insights during Twitch streams, Streamoz‘s offerings could enhance your followership and engagement.
Amazon PPC ads on the sidebar.
Wrapping Up
Amazon PPC advertising is an effective advertising strategy as it enables you to target an audience that is interested in your product. You should know how to do it right to get the desired results. By following this guide, you can get a good ROI on Amazon PPC advertising. You can read our guide on how to use dynamic keyword insertion to optimize PPC campaigns.