Amazon Advertising offers a PPC (pay-per-click) model for sellers and brands to economically advertise their products. In this model, advertisers pay a certain fee to Amazon only when someone clicks on their ad. PPC, in general, is also referred to as the CPC (cost-per-click) model.
PPC ads are what appears on your screen while searching for products online. They help you advertise your brand to reach a wider audience at an economical price and increase your ROI. On Amazon, PPC campaigns are designed to boost traffic to your listings and increase sales.
PPC campaigns can be effectively utilized by all kinds of sellers – both new and existing expert sellers. In this article, you will learn everything you need to know as a beginner to launch your own PPC campaigns.
Amazon PPC ad campaigns – types
Amazon PPC advertising is a powerful tool that sellers can leverage to improve the visibility of their products. They have a major impact on how a product ranks organically on Amazon. The first and most important thing to know is that there are three types of Amazon ads available to sellers and vendors.
- Sponsored Product ads
- Sponsored Brand ads
- Sponsored Display ads
Sponsored Products
This ad type is used to advertise individual products with specific keywords. Specific keywords and ASINs are used in these ads to draw the attention of customers. These are considered the most sought-after types of ads and are used by Professional Sellers, Vendors, and Agencies.
These ads are displayed in search results and on product detail pages. Only those products can be advertised under this category so long as they meet specific criteria like Buy Box eligibility and do not qualify as adult or refurbished products.
Sponsored Brands
This category of PPC campaigns is aimed at building brand image and awareness along with the use of a brand logo and a custom headline symbolic of the brand. Since it is focused on a brand, you can promote up to 3 products, thus leading people to your custom Amazon store.
Keywords form an important part of the campaign here as well. These ads have the same users as Sponsored Products and also follow the same criteria for determining the eligibility of products that can be advertised. They appear on the search results page on Amazon and on pages of product details, with a minimum of $1 being the daily budget.
Sponsored Display
This type of PPC campaign is meant for advertising single products and directing customers to specific product detail pages on Amazon. A customer’s buying behavior and online shopping activities determine who these ads target.
Keywords do not form an important part of this Amazon PPC campaign. These ads are meant for Amazon and also appear on other third-party websites and apps. They are used to ‘retarget’ customers to make purchases if they didn’t earlier.
These ads are also used by Professional Sellers, Vendors and Agencies. They prohibit the same type of products as the other two campaigns with the addition of alcohol, prescription drugs, weapons, and explosives.
When it comes to the cost of these ads, it is important to plan and keep your budget small until you can evaluate how well your ads are performing and decide accordingly on your future ad spend.
PPC Jargon
It is absolutely essential for a seller to be well-versed with the terms and phrases associated with Amazon PPC campaigns. Otherwise, as a new seller, you will find yourself overwhelmed and unable to navigate through the process of launching your first campaign. Knowing the basic terminology is a prerequisite to planning your Amazon advertising strategy.
ACoS
It is the advertising cost of sale and is calculated by dividing the ad spend by the total ad revenue generated. It is the best way to measure the performance of your PPC campaigns. You can use SellerApp’s free ACoS calculator feature for assistance.
Conversion Rate
It is the number of conversions from an ad divided by the total number of interactions that the ad receives. It shows you how many users have actually gone ahead and performed the desired action.
CPC
Cost-per-click is the amount that you are liable to pay for every click that your ad receives. It is calculated by taking into account the cost of an ad and the keywords and dividing them by the total number of clicks.
Amazon DSP
Demand Side Platform is a solution that Amazon offers, which advertisers can use to buy video and audio display ads to effectively make their advertising appear more strategic.
Keywords
Keywords are what customers use to find your products on Amazon and are the most important part of your PPC campaigns. Keyword bidding refers to the process of bidding on a keyword for the highest price you can afford. For a beginner, trying out Amazon Keyword Research tool by SellerApp can give you more insight if you’re finding it difficult to navigate through finding the right keywords.
RoAS
This is your ‘return on ad spend,’ which measures the effectiveness of your ad spend. It is calculated by dividing the total conversion value by your advertising costs.
Generate profit with Amazon PPC
The bottom line of generating profit with your PPC campaigns is that you should be spending less and earning more in revenue. Constant monitoring of keywords and product listings, as well as your ACoS, is crucial to a successful campaign.
Determine what your profit margins are and your target ACoS in order to continually earn profits. Ensure that you use keywords as tactically as possible to generate sales and maintain a good ranking in search results.
Conclusion
With all the basics mentioned above, you will now be better prepared to launch your PPC campaigns and advertise more effectively. If you feel like you’re now ready to dive into PPC campaigns on a more advanced level and need help, you can read SellerApp’s blog on everything related to advertising on Amazon and PPC optimization.