How to Advertise on Amazon?
Amazon isn’t just a great marketplace to sell on; it’s a powerful platform to market on too.
Amazon PPC advertising helps sellers increase product visibility to gain more views, clicks, sales and repeat customers.
But, with more sellers using Amazon advertising to do the same, it’s crucial that you implement a solid and defined Amazon PPC strategy that helps you realise your goals in the most cost-effective way possible.
This eCommerce guide to Amazon PPC covers:
- What is Amazon PPC?
- How Amazon PPC works?
- The benefits of advertising on Amazon
- How to set up your first Amazon PPC campaign?
- How to boost your Amazon advertising results?
Let’s jump straight in.
What is Amazon PPC?
Amazon PPC is an advertising program where Amazon sellers pay to promote their products across the platform, rather than relying on organic visibility only.
There are three main Amazon PPC formats/ad types:
1. Sponsored Products
Sponsored product ads push individual listings to the first page of the search results and include them on product pages, along with a “sponsored” tag.
2. Sponsored Brands
Sponsored Brands ads feature your brand logo, a custom headline and multiple products in advertisements on the search results page, along with a “sponsored brand” tag.
You will need to enroll/register your brand with Amazon (which can take a while to get approved). Once this is done you will be able to create a great brand landing page where these ads will drive to. You can show off your key products, subcategories to your different ranges or even a story about who you are.
3. Sponsored Display (Including Video)
Sponsored Display ads feature your product below the “add to cart” button and on the product details page.
Amazon uses keyword targeting to match your PPC advertisement with customer search queries. When a shopper enters a search term relevant to your keywords, your advertisement enters an auction, based on a default maximum bid.
The winning bidder wins the advertisement placement and, if someone clicks the ad, pays $0.01 more than the next highest bidder. For example, if your default bid was $1.20 and the next highest bid was $1.05, you’d win the advertisement placement and pay $1.06 if the shopper clicked your ad.
This ad type also requires brand enrolment.
Why is it important to advertise on Amazon?
Amazon is a lucrative marketplace to sell on because it attracts millions of shoppers from around the world, but it also attracts sellers, too. This makes it challenging standing out on Amazon, especially if you’re a new seller, introducing a new product or just struggling to top the organic results.
Amazon PPC gives you a competitive advantage by:
- Creating awareness of new products not yet ranking on the first page.
- Boosting the visibility of existing products that aren’t top of the organic results.
- Driving customers to specific products, such as seasonal or underperforming products.
- Reaching new audiences and different shoppers.
By increasing the visibility of your listings across Amazon, you naturally generate more interest and clicks, which generate more sales and reviews, helping you grow your organic ranking to generate further sales. You may have heard this referred to as the Amazon flywheel effect.
How to set up your first Amazon PPC campaign
Setting up your first Amazon PPC campaign is easy.
1. Select your Amazon PPC campaign type
For this walkthrough, we’re going to concentrate on Sponsored Products, but you can choose whatever campaign type you want to promote your product with.
2. Set your campaign name, budget and duration
Give your campaign an easily identifiable name, maximum daily budget and start/end date.
Note that your maximum daily budget averages out over one month, meaning some days your ad spend will exceed the budget and other days it will come under budget.
3. Select a targeting type
Targeting determines where and when your ads appear on Amazon. There are two different targeting methods:
- Automatic: Amazon automatically targets keywords based on product information, campaign data, and multiple default matching strategies.
- Manual: you set keywords based on keyword research as well as setting negative keywords and different keyword match types.
Definition: negative keywords are keywords that prevent your ad from appearing. For example, if you sell wine glasses you might add “sunglasses” as a negative keyword.
If you’re new to Amazon PPC, we recommend starting with an automatic campaign and then using the results and data to inform a manual campaign when you become more familiar.
4. Select your product
Choose the product you want featured in your first Amazon PPC campaign by entering the ASIN or product name into the search field.
5. Set a default bid
Set the maximum amount you’re willing to pay when someone clicks your ad by entering a figure or using Amazon’s suggested figure. Remember, Amazon deducts winning bids from your daily total, so set a figure that is competitive but doesn’t immediately drain your daily budget upon one or two clicks.
6. Review and launch
Finally, review your sponsored product ad and set it to live.
How to monitor your first Amazon PPC campaign
It’s good practice to let your first Amazon PPC campaign run for at least a week before you monitor the results.
Log into your Campaign Manager to download the performance data of your PPC campaign. The main KPIs to monitor are:
- Click-through rate (CTR): The percentage of shoppers clicking your ad after seeing it.
- Conversion rate: The percentage of shoppers buying a product after clicking your ad.
- Cost per click (CPC): The average cost paid per shopper clicking your ad.
- Advertising cost of Sale (ACOS): The percentage of product cost spent on advertising.
The goal is to have a high CTR and conversion rate while maintaining a low CPC and ACOS. Any discrepancies between figures highlight a potential problem with your ad targeting or product listing.
For example, a high CTR and low conversion rate suggest that while you’re targeting the right keywords, your listings aren’t compelling shoppers to convert.
ROAS (Return on ad spend) is another term used similar to ACOS (shown as a percentage), which refers to the amount of sales revenue returned for the amount of money spent on your ads. In the above image example you will see the ROAS was 2.31 – meaning the amount in sales (£14.49) was 2.31 times more than the amount you spent on ads (£6.26). You will need to work out what your own return KPI’s are in order to make a profit or include what other benefits you get from advertising your products.
How to boost the ROI from Amazon PPC advertising
You can further boost the return on investment from Amazon PPC advertising by maximising clicks and sales through tactics including:
1. Optimised listings
Using high-quality images (at least 5 with a video if possible), persuasive content (A+ pages and manufacturer info) and competitive pricing to encourage customers to convert after landing on your product pages.
2. Social proof
Increasing the number of positive reviews (take a look at Amazon’s Vine review program) and the amount of user-generated content by providing exemplary customer service throughout the shopping journey.
3. Amazon Prime
Providing customers with free and fast shipping by qualifying for Seller Fulfilled Prime (SFP). With SFP you can join the Amazon Prime fast-shipping program by meeting specific delivery speed metrics and KPIs in-house or by using an outsourced fulfilment company, such as Huboo. Once you meet the program requirements, Prime shoppers receive free and fast shipping across your products, making them more likely to convert and return.
There’s no doubt about it, Amazon is one of the most competitive places to sell online, but that doesn’t mean you can’t stand out from the crowd and beat the competition.
By using Amazon PPC to increase your visibility and reach new customers, you can boost your sales, review numbers and organic ranking at the same time.