What Is Amazon PPC and How to Get Started?

Amazon is truly a global giant, with a whopping 310 million active users and 200 million Prime subscribers all around the world. And can you believe it? They’ve sold a staggering 75 million products on their Amazon.com Marketplace!

If you’re thinking about selling on Amazon, you’ve got to be prepared to go the extra mile and leave your competitors in the dust. How can you do that? Well, having a solid Amazon PPC strategy is key. If you want to make it big on Amazon in 2023 and beyond, having a well-crafted Amazon PPC management strategy is the secret sauce you need.

What is Amazon PPC?

Amazon PPC, or Amazon Pay-Per-Click advertising, is a digital advertising model offered by Amazon that allows sellers and advertisers to promote their products and reach a larger audience within the Amazon marketplace. Here’s how it works:

Ad Creation

Sellers and advertisers create ad campaigns for their products on Amazon. They can choose between different ad types, including Sponsored Products, Sponsored Brands, and Sponsored Display ads.

Sponsored Products

Sponsored Products are Amazon advertisements designed to promote individual products. Advertisers leverage specific keywords to reach potential buyers through these ads.

For instance, imagine a seller wants to attract customers searching for outdoor grills. They might target keywords like ‘charcoal grill’ and ‘gas grill’ to connect with shoppers in the market for a new grill.

Sponsored Brands

Sponsored Brands take it up a notch by showcasing up to three products alongside an Amazon Store. Just like with Sponsored Products, advertisers employ keywords to pinpoint their target audience,

This type of advertisement boosts brand recognition and empowers sellers to captivate shoppers while showcasing their range of products.

Sponsored Display

Sponsored Display shines a spotlight on a single product. In this Amazon PPC ad format, advertisers have the ability to reach shoppers based on their shopping behaviors, such as past purchases or viewed products. Unlike other ad types, Sponsored Display doesn’t rely on keywords; instead, it harnesses the power of machine learning and automation to maximize sales for your featured product.

Keyword Targeting

Advertisers select relevant keywords or product categories that are related to their products. When customers search for these keywords or browse products in the chosen categories, the ads may appear.

Bidding

Advertisers set a bid amount, which represents the maximum amount they are willing to pay when a customer clicks on the ad. The higher bid amount, the more likely the ad will be displayed.

Auction Process

When a customer searches for a product or keyword, Amazon runs an auction to determine which ads will be shown. The auction considers factors like bid amount, ad relevance, and historical performance.

Ad Display

If an advertiser’s bid wins the auction, their ad is displayed prominently on the search results page or product detail pages. These ads are labeled as “Sponsored” to indicate they are paid placements.

Pay-Per-Click (PPC)

With PPC, advertisers only pay when a potential customer clicks on the ad. The true cost per click is determined by factors like keyword competitiveness and the bid amount placed by the advertiser.

Campaign Monitoring and Optimization

Advertisers can keep an eye on the performance of their campaigns, including metrics like click-through rate (CTR), return on ad spend (ROAS) and conversion rate. They can adjust their bids, ad content, and keywords to optimize their campaigns for better results.

How to Begin Your First Amazon PPC Campaign?

Now that you know how Amazon PPC works, let us show you how to start your first Amazon PPC campaign. Whether you’re a seasoned seller or just beginning your e-commerce journey, harnessing the power of pay-per-click advertising on Amazon can significantly enhance your product’s presence and performance on the platform.

1. Decide which products to showcase in your ad campaign

The initial step is determining which products to feature in your ad campaign. Regardless of whether you’re planning a Sponsored Products, Sponsored Brands, or Sponsored Display campaign, you’ll likely be handpicking a variety of products for promotion.

A good practice is to begin with a product that has a proven history of success. Simply enter the ASIN or product name into the search bar icon, and click to include it in your campaign.

2. Keyword and optimization

Now, let’s dive into the essential steps for keyword research and optimization to ensure your Amazon ad campaign performs at its best. Whether you’re opting for automatic targeting or taking the manual route, this phase is critical for success.

For manual campaigns, start by researching and selecting the most relevant keywords for your products. However, if you’re going with automatic targeting, Amazon handles keyword selection based on your product, saving you the legwork.

Regardless of your targeting strategy, the next crucial step is optimizing your product listings. Think of it as fine-tuning your Amazon store for peak performance. This optimization not only makes the most of your advertising budget but also aids in boosting your organic search rankings on Amazon.

To achieve this, incorporate your chosen keywords into key areas of your product listings, such as the title, description, and features. Take a moment to review your product images, ensuring they are professional and showcase your product in both standalone and in-action shots. Your product copy should highlight its benefits and uses while providing essential information, such as warranty details.

3. Create your PPC ad campaign

Begin your first campaign with these starting steps:

• Log into your Amazon account
• Click the “Advertising” tab
• Select “Create campaign”

Next, choose your Amazon advertising campaign type. You have 3 options:

• Sponsored products
• Sponsored brands
• Sponsored display

For this guide, let’s focus on sponsored products.

Create a name for your campaign

Choose a campaign name that’s both descriptive and easily recognizable. While it’s only visible to you, crafting a name with a structured format ensures your campaigns remain organized and user-friendly for both yourself and any team members involved in your advertising efforts

Set the start and end date (end date is optional)

Set a campaign start and end date, which can be scheduled for the future. It’s advisable to run your initial campaign for a minimum of one week without making any changes. This period allows your campaign to gain traction and provides you with the opportunity to collect and analyze valuable data.

Set your daily campaign budget

Amazon provides flexibility in setting your daily budget, with a minimum requirement of $1. Most advertisers opt for higher budgets to meet their goals, and this amount is averaged over a month. Your budget choice should align with your return on ad spend (ROAS)  and advertising cost of sale (ACOS) objectives, and it can be adjusted as needed.

4. Choose your targeting

Choose between manual and automatic targeting for your Amazon ad campaign. Amazon recommends starting with automatic targeting, which uses your product information for ad targeting and provides valuable keyword data over time.

Regardless of your choice, you’ll need to create ad groups, select products, and set bid preferences. Automatic targeting involves less management but may be less precise, while manual targeting offers greater control over keywords and match types but requires more expertise.

5. Upload your keywords

For Amazon PPC’s manual targeting, you can include up to 1000 keywords per ad group, with a recommended minimum of 30. You have the option to manually input keywords or upload a .csv file, and Amazon can suggest additional keywords for your campaign.

6. Set up your ad bids

Once your keywords are in place, it’s time to fine-tune your default bids. Utilize your earlier keyword research to determine the most cost-effective bids for different keywords. Regularly monitor your ads’ performance and adjust bids based on data, avoiding unnecessary guesswork. 

Similar to your daily budget, you have the flexibility to modify your keyword bids at any time, ensuring a proactive approach to Amazon PPC that maximizes ROI. Think of PPC campaigns as auctions, where your default bid represents your maximum cost per click, and Amazon may provide bid suggestions to guide your decisions.

7. Submit your PPC ad for review

After finalizing your keyword bids, submit your ads to Amazon. Typically, Amazon takes a few hours to review and launch your ads. Be proactive by monitoring your campaign daily in the initial stages, making quick adjustments to keywords, bids, or budgets if needed.

Amazon will notify you of any issues and provide tips for fixing them. Once your campaign matures, you can reduce the frequency of checks. Before launching, perform a final review to ensure all information is accurate, and you’re ready to roll!