Get an overview of Amazon advertising best practices in this in-depth article from SellerApp.

If you want your Amazon business to succeed, you need to leverage Amazon ads to the fullest and build a robust advertising strategy.

Amazon Pay-per-Click (PPC) advertising allows brands, agencies, and third-party sellers to bid on high-converting keywords to advertise their products, which will eventually be displayed in Amazon’s search results and on competitor product pages.

Using this technique, sellers can easily convert page visitors to buyers — and then analyze their campaign performance to measure the important KPIs and identify which specific ads are driving the highest conversions. It’s such an efficient marketing method that three out of four Amazon sellers of all scales and sizes use this in 2021.

To get you up to speed, here’s a brief outline of what this article will cover:

What are Amazon Sponsored ads?
Why should you leverage Amazon’s Sponsored ads?
How to create an Amazon PPC strategy
Types of Amazon PPC ads
Strategies and expert tips to increase sales

Let's get started!

What are Amazon Sponsored Ads?

Amazon Sponsored ads is the advertising system that allows sellers to craft PPC campaigns for their listings in order to increase product visibility and organic rankings. Every time a shopper clicks on the ad, Amazon will charge the seller a certain amount based on the keywords they have bid on.

Before we get into more details, let’s walk you through the key metrics of Amazon PPC campaigns and how they work.

Advertising Cost of Sales (ACoS): This is the percentage of sales that sellers spend on advertising that product. For example, if the total sales generated from the ad is $25 and the amount spent on the ad is $5, your ACoS will be 20%. This is an important metric that measures the efficiency and ROI of your ad campaign.

Attributed Sales: The total sales generated on the first week of the campaign. This data can be found in the campaign performance report. The detailed report provides an overview of how much and from where your sponsored ad revenue is coming in the form of a pie chart.

Impressions: The number of times your ad appeared on Amazon’s search results or competitor product pages.

Clicks: The number of times shoppers clicked on your ad. It takes at most three days to eliminate invalid clicks from the report and present the actionable insights correctly.

Cost Per Click (CPC): The amount to be paid by sellers for every click by customers.

The aforementioned metrics can be found on SellerApp’s advertising dashboard.

Why Should You Leverage Amazon’s Sponsored Ads?

Due to a paradigm shift of consumer shopping from brick-and-mortar stores to online sites — and, overwhelmingly, to Amazon.com — sellers on Amazon have a huge opportunity to elevate their sales. But the influx of online traffic also brings in more competitors trying to hoard sales. This is why you need Amazon PPC in your business to increase your rankings and listing visibility. When you leverage Amazon’s Sponsored ads, you can reap several of its benefits. Some of them are:

High Rankings: For greater visibility, you need to target the most relevant keywords. This, in turn, will rank your product higher in Amazon SERPs and improve your conversion rates and overall sales.

Cost-effectiveness: Amazon PPC is also considered cost-effective as it charges sellers only when customers click on the ads, and not the number of times the ad appeared on Amazon.

Global Visibility: Amazon PPC campaigns can generate millions of views in no time. It helps your products reach wider audiences who are also relevant to your listings.

How to Create an Amazon PPC Strategy

Here are some of the important tips you must follow to create a robust Amazon PPC management strategy:

Select the product listing(s) you want to campaign for.
Conduct effective keyword research to find high-converting search terms to bid on. You can use SellerApp’s Keyword Research tool and identify which keywords resonate with your product listing. You may also measure your existing product listing quality by navigating to Product Intelligence. This way, you can analyze the product’s listing score, index score, and keyword quality. You'll also acquire data-driven recommendations to improve the overall product SEO.
Test every type of PPC Campaign and play around with automatic and manual keyword targeting to understand which is the best fit for your listing.
After launching your first campaign, you must wait for at least 2-3 weeks to further monitor your Campaign Performance Report for making necessary changes.
SellerApp’s Campaign Manager provides a detailed report with all the important metrics like clicks, impressions, total sales, the amount spent on ads, etc. This helps sellers improve existing and future campaigns.
You can also take keywords from your automatic campaigns and use them in manual campaigns for better results.

Related reading: 6 Mistakes to Avoid with Your Amazon PPC Advertising

How to Create an Automatic-Targeting Sponsored Product Ad

Log in to Amazon Seller Central and choose Advertising >> Campaign Manager.
Now, scroll down and click on “Create Campaign.”
Choose the campaign type. Click on the “Continue” button under Sponsored Products.
Next, fill in the information on the Settings section of the Create Campaign page.
Create an ad group. Here, select your ad group name and choose the products you wish to promote.
Set your bids — default or targeting group. If you are just starting out, we recommend you choose default and set the amount a little higher for early sales.
Verify the information you provided and rectify any mistakes. Now, click on “Launch Campaign.”

Create Campaign Settings

You have multiple options for how to configure your Sponsored Products ad campaign:

Campaign Name: Select a name for your campaign based on your product and ad group.
Date: Choose the starting and ending date of your campaign, i.e. how long you want your campaign to run. If you are not sure how long your campaign should run, leave the end date blank.
Daily Budget: Set the maximum amount you want to spend on your ads per day. We recommend setting your daily budget at $25 or more.
Targeting: Select “automatic” if you want an automatic Sponsored Product ad.
Bidding Strategy: You also have to choose your campaign bidding strategy. For Dynamic Down Only bids, Amazon lowers your bids if you are less likely to make a sale; with Dynamic Up and Down bids, Amazon may also increase the price of your bid by 10% if your product is more likely to make a sale. And with Fixed bids, your bidding will not change under any circumstances unless you choose to change it.

You can also create manual-targeting Sponsored Product ads, and SellerApp's Keyword Research tool can help. Look for relevant, high-converting keywords to reach the right customers. You may also perform a reverse ASIN lookup to find out what your competitors are targeting.

Types of Sponsored Ads

1) Sponsored Product Ads

Sponsored Product ads are those that appear in Amazon SERPs and product listing pages. They are similar to organic listings, which makes them the most preferred ad type for Amazon sellers. According to Amazon, ASINs averaged a 40% weekly increase in the number of units ordered within the first year of launching a Sponsored Products campaign.

While crafting Sponsored Product ads, you must consider two types of keyword targeting strategies: automatic and manual.

Manual Targeting: Manually select the keywords that best resonate with your product. You can select different match types for these search terms and reduce bids or eliminate low-performing/non-performing keywords. This gives you more autonomy over ad spend and overall ad KPIs than automatic targeting.

Automatic Targeting: Automatic targeting provides minimal control over PPC campaigns. You can only set a CPC bid and add all the necessary keywords while Amazon decides how to display it and which category of shoppers to target.

Got it? Let's move on to the other two Sponsored ad types.

2) Sponsored Brand Ads

Sponsored Brands allow Amazon sellers to build awareness for different products simultaneously with more innovative visuals than Sponsored Products. These ads can be launched using two formats: headline banners at the top of SERPs and a video further down on the page.

3) Sponsored Display Ads

Sponsored Display ads help to retarget existing customers or site visitors who have already visited listing pages. Unlike Amazon Sponsored Product or Brand ads, Display ads can be found anywhere on Amazon’s affiliated sites like Facebook, Instagram, Hotstar, and mobile apps.

Top Tips and Expert Strategies for Amazon Ads

Now that you are well aware of the ins and outs of Amazon ads, it's time to understand how to optimize Amazon PPC campaigns even more effectively.

Choose the Right Products

Select the listings you want to promote. You can opt for the right listing based on a variety of factors such as product sales, ranking, and demand. Whether you select Sponsored Product ads or Display ads, there are several aspects that will determine your decision. For instance, if you are selling luxury items, Sponsored Brand ads can bring about brand awareness and high credibility. This, in turn, will increase your conversion rates and lead to more sales.

Select a Relevant Ad Type

Amazon Advertising is a significant strategy to broaden Amazon sales velocity. It has multiple PPC ad options to choose from. We recommend that you try all the ad types Amazon offers before you make a decision to stick to one, especially automatic-targeting and manually-targeted Sponsored Product ads. These two will give you a good idea about the keywords/search terms types that work best for your product when analyzing sales data from every campaign type.

Optimize Your Product Listing

Whether you select an automatic or manual campaign, optimizing the product listing and making it SEO-friendly should be a top priority if you want to achieve a higher ranking on Amazon SERPs. This technique will also help you to make the most of your ad campaigning budget.

Compile a list of relevant keywords for your listing and incorporate them in your product title, product description, and features. Be cautious not to overuse them—keyword stuffing can work to your disadvantage. Use professional, high-resolution images for display that highlight your product's best features and show it in action.

Monitor Campaign Performance

With Amazon Sponsored Product ads, sellers can bid for specific keywords or product categories. If you select keyword targeting, your product listings will appear depending on customer search queries. You can then monitor campaign performance by keyword or product.

You can also get a visual representation of keyword performance using the Search Term Analysis feature on SellerApp. It shows the number of keywords in three performance categories:

Performing: High-converting keywords that have high conversion rates, low ACoS, and higher sales.
Under-performing: Keywords that get clicks but can’t convert. This means that you have to optimize these search terms.
Non-performing: Negative keywords that eat up your campaign budget. They bring no clicks or conversions.

Like keywords, you can also monitor your product performance using the same KPIs. Not only that, but you can also get a detailed analysis of your conversion funnel and track the following metrics:

Impressions
Clicks
Orders
Spend
ACoS
Cost Per Click

This Conversion Funnel is a visual representation of your impressions, clicks, and orders. It also tells you whether these metrics have increased or decreased over the past 14 days.

Final Thoughts

Strategizing your PPC campaigns may sound difficult because there is no one-size-fits-all plan that suits every campaign type or industry vertical.

Amazon is the largest marketplace for third-party sellers and is highly competitive in nature. Therefore, implementing the trial-and-error ad method and monitoring your Amazon ad campaigns every three to four weeks will give you optimum results. Not to mention, these ads drive greater ROI and sales when you track significant metrics and make informed decisions based on that data.