How To Create A Profitable Amazon PPC Strategy: 4 Steps You Should Follow

How To Create A Profitable Amazon PPC Strategy: 4 Steps You Should Follow

Amazon’s PPC ads are a great way to get ahead of the competition, get your product noticed, and boost your overall Amazon PPC strategy.

While it might be tempting to throw your money at sponsored display ads, it’s not that simple.

As a leading Amazon management agency in the UK, Lezzat regularly helps our clients develop an Amazon PPC strategy that gives a worthwhile ROI.

If you want to know more, click here.

So, if you’re new to Amazon advertising, here are some tips on creating profitable PPC ads.

What is Amazon PPC?

amazon ppc strategy

Amazon’s PPC ads (Pay Per Click) are its internal advertising strategy. In short, sellers bid money on keywords that match their products.

Each time a potential customer clicks on their product as a result of those keywords, the seller pays a fee.

Developing an Amazon PPC strategy as a new seller can be difficult. It’s tempting to go for high-volume keywords.

But, these are usually more expensive, and better-performing brands will almost always be able to outbid you.

As such, it can feel like you’re throwing money away for nothing.

We’re an experienced Amazon PPC agency that can guide you through the early steps of setting up your campaign.

If you are not convinced yet, I let you know that three out of four Amazon sellers of every kind utilize an Amazon PPC strategy in 2021.

While you can go it alone, it makes sense to hire an expert to get you started.

PPC Metrics

Think PPC ads sound fairly easy? Unfortunately, it’s not that simple, as PPC ads use a range of metrics for measuring different aspects of a PPC campaign.

Here’s a brief summary:

ACoS

Advertising Cost of Sale (ACoS) is the percentage of attributed sales that you spend on advertising.

Say you spend $5 on advertising and have $20 worth of sales attributed to that. Divide 5 by 20, and your ACoS is 25%.

Attributed Sales

This is the total number of products sold based on clicks, measured in a week-long period.

It can take up to 48 hours for data to show.

As mentioned, it’s a key component of your ACoS calculations.

Impressions

You might already be familiar with this term. Impressions are the number of times your ads were displayed when people search on Amazon.

Clicks

Clicks are pretty self-explanatory: it’s the number of times your ads are clicked by customers.

Impressions and clicks work together to form the basis of conversion calculations.

Why is an Amazon PPC Strategy Important?

As a seller on Amazon, why should you be worrying about buzzwords like PPC ads and ACoS?

Simply put, you want as many sales as possible. Amazon is currently the largest online retailer and has nearly 50% of the American e-commerce market.

This means that it’s a hyper-competitive place to be selling.

Granted, your organic ranking (determined by reviews and sales, among other factors) is important.

But even products that sell well can get lost in a sea of other high-performing items.

PPC ads are a way to increase your reach on the platform and improve visibility for your products.

Of course, if you need some early reviews to get you going, consider getting involved in Amazon Vine.

How to Develop an Amazon PPC Strategy

amazon ppc strategy

To an extent, sponsored display ads are trial and error.

Even experienced sellers play around with their keywords, so don’t be afraid of this fact.

Benchmarking your progress on Amazon will help you choose the best course and make any relevant changes, learn how here.

Then, try again!

If you want most of the legwork done for you, consider hiring an Amazon PPC agency in London, UK (or elsewhere), such as Lezzat.

But, if you think you have what it takes to build a profitable Amazon PPC strategy, here’s a quick how-to guide.

Step 1: Choosing Products

Before going any further, it’s worth noting that you should only use sponsored products.

You can set up automatic campaigns for these, including sponsored display ads or brand or product ads.

Step 2: Automatic or Manual?

We’ve already hinted at this: opt for automatic campaigns over manual ones. For beginners, they’re a better option because they’re easier to set up and monitor.

But, manual campaigns allow you to bid on keywords that you choose, including exact keywords, phrase matches, and broad keywords.

The benefit of this is that you can play around with different terms to see what works best for your product.

Manual and automatic PPC ads have pros and cons. It ultimately depends on your experience and willingness to analyse and track.

However, a combination of the two can give you some great data to work with.

Step 3: Choosing Bids

PPC ads function on bids. In short, it’s the amount of money you’re happy to spend per click.

Your options are Dynamic Bidding (down only or up and down) and Fixed Bids.

Dynamic bids rely on Amazon’s perception of your ad’s ability to convert. If it thinks it’s more or less likely, it’ll raise your bid up or down to suit.

Fixed bids are just that: you set a price and make adjustments manually. It’s best to avoid this option because you’ll almost always overspend.

Step 4: Analysis

After setting up an easy PPC campaign, you can begin getting data.

With this, you can optimise your keywords and categories to see what works best for your products.

List good and bad keywords weekly to use as follows:

  • Deactivate bad keywords for manual campaigns and set them as negative in automatic.
  • Take good keywords from automatic campaigns to serve as manual keywords. Change them to a negative on automatic campaigns after.
  • Don’t spend more than £10 on a keyword or ASIN that hasn’t converted.

It’s completely normal for your ACoS to be 60-90% for the first 2 months of a new product’s launch.

After month 3, with the right optimisation, your ACoS should drop to 40% or further.

Of course, your target depends on your overall Amazon PPC strategy, competition, and seasonality.

Conclusion

PPC ads can be confusing in the early stages, as there’s quite a lot of information to juggle.

With some experimenting, you can create a profitable Amazon PPC strategy in a few months.

But, if you want to hit the ground running with your new product, contact Lezzat.

As an Amazon marketing agency, we have the knowledge to create PPC campaigns that work, every time.

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