Amazon ads are growing in popularity among PPC marketers. While Google still holds the lion’s share of ad revenue, Amazon’s digital ad revenue is predicted to hit $1.44 billion in 2018…and, Amazon shows no signs of slowing down.
Media analyst Alex DeGroote predicts Amazon could have an $8 billion share in the US by 2020, beating Google in the process. He explains, “I think Amazon will … take Google to the cleaners on retail search using their estate. Slowly, over time, you will use Amazon as your retail search engine rather than Google.”
Amazon is becoming the preferred choice for online shopping. Selling products on Amazon is vital to compete in e-commerce. But, getting to the top of Amazon’s search engine isn’t easy. That’s why Amazon’s ad revenue has spiked. Like Google, Amazon merchants must pay to get to the top.
Amazon’s PPC ads are different than Google AdWords and Facebook Ads – there’s more to the setup process. Before you get started with advertising on Amazon, it’s important for marketers to understand how it works and how to optimize ads for the best performance.
Here’s everything you need to know to get started managing Amazon’s PPC ads!
Amazon PPC Ad Types
There are three types of PPC ads you can run with Amazon: Sponsored Products, Headline Search Ads, and Display Ads. Let’s dive into each of these three types of ads.
1. Sponsored Products
Amazon’s Sponsored Products allows businesses to advertise products based on keywords.
Here’s an example of Amazon’s Sponsored Products:
To get started with Amazon’s Sponsored Products, all you have to do is select your products, choose your keyword terms, and set your budget. Amazon will automatically target your ads to the appropriate audience.
Some businesses have seen better success with Amazon’s Sponsored Products over Google AdWords. Don’t believe me? 3Q Digital’s CPC on Amazon was $0.12 compared to their AdWords CPC of $0.40. That means in some cases Amazon’s ads can be 3x times cheaper than AdWords CPCs.
And, Green Gobbler used Amazon’s Sponsored Products to double sales.
Similar to Google AdWords, you only pay for clicks received on your Sponsored Products in Amazon. However, PPC marketers can only use Amazon’s Sponsored Products in specific categories.
2. Headline Search Ads
Similar to the Sponsored Products, Headline Search Ads are limited to specific product categories. Headline Search Ads in Amazon are the banner ads at the top of search results with creatives or the brand logo. The goal is to drive buyers to a collection of products. The placement at the top of the search results increases the chance of your products being seen.
Here is an example of a Headline Search Ad on Amazon:
Jungle Scout sold 849 units with $15,143 in sales over a six week period using Headline Search Ads on Amazon.
Amazon recently announced new placement options for their Headline Search Ads. In addition to the banner ad placement at the top of the search results, they now show on the left and bottom of search results.
Users will now be able to bid on their placements of these ads for even more chances of PPC for Amazon success!
3. Product Display Ads
Amazon’s Product Display Ads are displayed on product pages, as a similar product option. It is a self-service display ad paired with individual ASINs giving marketers more options to target behavioral segments.
Here is an example of a Product Display Ad on Amazon:
Amazon lets sellers match each deal with the intended audience with Display Ads. Sellers can target the product details page, complementary listings, related categories or interests.
Rhodius, a mineral water brand, saw 120% increase in keyword searches during their display ad campaign and 156% increase in organic impressions.
When it comes to choosing the best ad type for your product, it’s important to understand your audience, your product type, and your ultimate goals. Sellers should match their goals with the type of ad chosen. For example, Sponsored Products should be used to target buyers with purchase intent, Headline Search Ads are better for brand awareness, and Product Display Ads are flexible for both.
Sun Products Corporate, owners of Snuggle® and Wisk® laundry brands, utilized all three Amazon ad types and saw a 500% ROI. However, the majority of sellers use Sponsored Products. In fact, 82% of brands use Sponsored Product Ads on Amazon.
The ad choice is up to you, but don’t be afraid to run multiple campaigns.
4 Requirements to Run PPC Ads on Amazon
Before you can get started running PPC ads on Amazon, you must meet Amazon’s four requirements:
- Seller Account: All advertisers must have an active seller account.
- Shipping: All advertisers must be able to ship to the US.
- Buy Box: If you want to advertise using Sponsored Products, you must be eligible for the Buy Box. Buy Box eligibility involves additional conditions that need to be met, such as:
a. Type of Selling Account: All accounts must be upgraded to professional.
b. Metric Performance: You must be able to show metrics for Order Defect Rate, Cancellation Rate, and Late Shipment Rate.
c. Sufficient Order Volume: Amazon requires sellers to have sufficient order volume (based on category) to qualify for the Buy Box auction.
- Amazon Brand Registry: If you want to advertise using Headline Search Ads, you must be enrolled in the Amazon Brand Registry.
You can see whether or not you meet the above qualifications by monitoring your Account Health dashboard.
Once all requirements are met, you can start building your PPC strategy for Amazon.
Before You Get Started, Perform Keyword Research
Before you begin advertising on Amazon, you’ll want to perform keyword research. A good place to start is Keyword Tool’s Amazon functionality to find Amazon-specific keywords.
The free version will give you a list of autocomplete keywords, while the pro version will also give you metrics like search volume, CPC, and competition.
You can also use Sonor’s free Amazon keyword research tool.
If you want to go one step further, you can buy their Chrome extension for $9.99 a month to track competitor keyword terms.
The competitor’s keyword terms are listed at the top of the product page results.
Another option is to use Amazon just like you would Google for keyword research. For example, Amazon’s autosuggest is an awesome source for keyword suggestions.
“Customers who also bought this” is another keyword gold mine on Amazon.
And, looking at competitors product titles and descriptions can give you an idea of what keyword terms they are trying to push.
The categories section is also a good resource for keyword research.
But, if you’re looking to get more keyword data, you can pay for Amazon specific software. AMZ Tracker is a popular Amazon keyword research tool. The tool lets you track products your keywords are ranking for and monitor changes your competitors make.
They also have a few other cool features like negative review alerts and hijack alerts.
How to Set Up Amazon PPC Campaigns
After you’ve met the requirements, done your keyword research and optimized your products, you can start to set up your Amazon PPC campaigns. Amazon recommends starting with Sponsored Products first. Let me walk you through how to set these up.
To start creating ads on Amazon, login to Amazon’s Seller Central.
Then, select what type of ad you want to create. In this example, we’ll be using a Sponsored Product.
Next, select the product or products you want to advertise from your existing list and organize them into ad groups based on your keyword research.
For those that qualify for Headline Search Ads, the process is the same except you will also be able to choose your brand in addition to selecting products for your campaign. Sellers with multiple brands can run individual campaigns for each brand.
Once you’ve chosen your products, you can choose your campaign name, daily budget, and duration dates.
You will then be able to determine your campaign targeting structure.
Your choices are between automatic targeting and manual targeting. As a beginner, I would recommend starting with automatic targeting. Automatic targeting gives Amazon the power to suggest potential keyword terms for you. If you decide to go with manual targeting, Amazon will give you a list of suggested keywords as well as the option to add your own.
This is where you would input any keywords you’ve found using strategies suggested in the previous section.
Before, sellers were able to use Amazon Search Terms Report to gather data about each search term, such as clicks, sales, impressions and so on. But since Amazon updated its reporting system last year, this feature is no longer available. You can still pull reports from the Reports > Advertising section, but sellers will now have to use other tools to assist in the research process.
After choosing your targeting structure, you can submit your ad for review and approval.
Developing a Bidding Strategy
The final piece of the Amazon PPC puzzle is bidding strategy.
You want to bid based on relevance. This way shoppers will be able to see your ads for matching search terms, but keep in mind that relevance isn’t always about related terms, it’s about searcher intent.
If you’re trying to rank for a product search term like “men’s shoes,” for example, associated terms like “Reebok” “Size 10” or “white athletic shoes” will be more relevant. Bid based on related terms that are most likely to get clicks. In other words, quality over quantity.
If you’re running an Amazon Sponsored Product campaign, when you set your keyword or group bid, that means you’re willing to pay for each click on the ad. To calculate your starting bid, you will need to know your cost of sale, your product’s price, and your product conversion rate. You can find these through your Seller Central account. Once you know your starting bid, you can raise or lower it depending on the type of campaign you want to create and your campaign goals.
To begin, start with an automatically-targeted campaign. This way you can test to see what works and quickly add and remove related search terms as needed. For manually-targeted campaigns, start high and lower bids over time.
Amazon tends to prefer campaigns that have been running for a long period, assuming that they will gain momentum the longer they run. Having a high budget when you first launch your campaign will allow you to get the initial sales under your belt so that Amazon will start to see you as a preferred campaign. Once you’ve gained some momentum, you can lower your bid prices to fit within your budget without having to worry quite as much about your ad reach.
Bids for Sponsored Products range from $0.20 to $6. The cost range is based on how competitive your keyword terms are on Amazon. For best results, look for Amazon’s “estimated page” bids. They give these estimates for a reason, so if you want your ads to show up when you’re launching your campaigns, try to bid for these keywords first.
Now You Know How to Get Clicks on Amazon!
Brands that once competed for shelf space in Walmart are now competing for top placement on Amazon. As shopping habits continue to change, sellers already using PPC on Amazon are ahead of the game.
The more you understand about Amazon, what it considers valuable for campaign success, and the rules and requirements for advertising there, the better your campaigns will be.
Keep in mind that Amazon assesses your overall store quality when ranking ads. Sellers must optimize their stores for sales and stay in good standing with Amazon even when they’re not running PPC ads. Don’t get lost without shelf space. Start your PPC campaigns on Amazon to stay front and center with shoppers!
Featured Image: Unsplash/Christian Wiediger
All screenshots by author, May 2018.
Image 1, 3, 5, 17-18: Screenshots via Amazon
Image 2: Screenshot via 3QDigital
Image 4: Screenshot via Amazon
Image 6: Screenshot via Jungle Scout
Image 7: Screenshot via Amazon
Image 8: Screenshot via Amazon
Image 9: Screenshot via Amazon
Image 10: Screenshot via Amazon
Image 11: Screenshot via eMarketer
Image 12: Screenshot via I Love to Review
Image 13: Screenshot via KeywordTool.io
Image 14: Screenshot via KeywordTool.io
Image 15: Screenshot via Sonar
Image 16: Screenshot via YouTube
Image 19: Screenshot via AMZ Tracker
Image 20-25: Screenshots via Amazon Sellers Central
Image 26: Screenshot via Sellics