It’s no secret that Amazon is the largest online retailer in the world. In fact, in just one year, they managed to extend their lead over second place Walmart by almost double. Unfortunately, as with any e-commerce website, it can be difficult to break through and capture your target audience’s attention. Thankfully, many businesses are finding success with Amazon PPC ads. However, with so many different strategies and variables to consider, it can be tricky to get the most out of your initial investment. In this blog post we cover everything you need to know about advertising on Amazon and how you can leverage their platform to grow your business.
WHAT IS AMAZON PPC?
PPC stands for “pay per click”, which is the cost of your advertisement when someone clicks on it. Amazon PPC is a type of advertising where you pay for your ad to be shown when people search for keywords related to your product. You may be familiar with Google AdWords, which is the most popular form of PPC advertising. Amazon PPC ads work in a remarkably similar way, but there are a few key differences. Unlike Google, Amazon runs a marketplace where people can buy from a range of sellers, and not just one store. This means that Amazon is more likely to be flooded with demand for a variety of products. This also means that you don’t have complete control over your ad campaign.
WHY SHOULD YOU USE AMAZON PPC?
Primarily, Amazon is a major player in the e-commerce industry. In fact, it’s estimated that 49% of all online sales in the U.S. happened through Amazon in 2017. According to Digital Commerce 360, the gross merchandise value, also known as GMV, of the merchandise Amazon and its third-party marketplace sellers sold to American consumers increased 18.8% to $378.95 billion last year from $319.10 billion in 2020.
There are over 350 million active users, and almost half of these are regular shoppers. Additionally, Amazon has a substantial amount of search traffic. This can be broken down into 3 steps:
- Amazon’s users type in a specific product or a general concept (e.g., “men’s shoes”)
- Amazon’s search engine will return a list of products related to their search
- Amazon’s users will read the product’s description and reviews
HOW TO SET UP AN AMAZON PPC CAMPAIGN
The first step to running a successful Amazon PPC campaign is to conduct thorough research. Make sure you’re targeting keywords relevant to your product but avoid going too broad. Instead, try to focus on long-tail keywords that people might use in their search engine but may not be aware are available on Amazon. For example, if you’re selling running shoes, you should consider keywords like “workout shoes”, “running shoes”, “men’s running shoes”, or “women’s running shoes”. It’s also important to make sure you’re staying within Amazon’s product listing policies by not using bolded keywords or excessive punctuation in your ad copy.
WHICH KEYWORDS SHOULD YOU FOCUS ON?
In addition to selecting the right keywords, it’s also important to consider which bids to set for each of your PPC campaigns. This is because you’ll only be charged for the ad that someone clicks on when they’re on Amazon. The bid is the amount you’re willing to pay for each click, and you can select any range between $0.10-$100+. In the pilot stages of your campaign, it’s best to be conservative with your bids. This will help you to minimize your risk and ensure you have enough budget left over to continue to grow your ad campaign later. It’s also important to keep an eye on your competitors and adjust your bids accordingly.
TYPES OF AMAZON PPC ADS
79% of Amazon SMB sellers promote their goods both on and outside of Amazon.com. The breakdown of those using Amazon Pay-per-click (PPC) advertising is as follows: Sponsored Brands ads are used by 39%, Sponsored Products ads by 77%, and Sponsored Display ads by 30%. Let’s go over the various Amazon PPC ad types that are available, in order of how well-liked they are with independent sellers.
There are three types of Amazon PPC Ads:
- Sponsored Product Ads
- Sponsored Headline Ads
- Product Display Ads
1. Sponsored Product Ads – Sponsored product ads are ads that appear next to your product listing. They may also appear on other product pages within Amazon. This is an excellent way to build brand awareness and drive additional sales for your product.
The two types of keywords targeting strategies that a seller can use when creating Sponsored Products ads are automatic targeting and manual targeting. Let’s examine how they differ.
Targeting keywords that Amazon’s algorithm determines are pertinent to your product listing is part of the automatic strategy. As time passes, Amazon makes changes to the ads to better suit your listing and boost conversions based on information it gathers from consumer clicks and purchases.
Sellers have access to four different keyword match types within automatic targeting:
- Close Match
When customers conduct searches for terms closely related to the product, you’re advertising, close match ads will appear.
- Loose Match
When customers look for keywords that are only loosely related to your product, loose match ads appear.
- Substitute Target
Customers who are considering purchasing a product that is like yours but is sold by a different brand are the target market for substitutes (e.g., paint instead of a oil paint)
- Complement Target
When customers view the detail pages of complementary products (e.g., acrylic paints to go with an oil paint.)
2. Sponsored Headline Ads – Sponsored headline ads appear at the top of the Amazon search engine results page. These ads are helpful for driving brand awareness and directing potential customers to your product listing.
3. Product Display Ads – Product display ads are like sponsored headline ads, but they appear at the bottom of the search results page. These ads are a great option for your product listing if you want to emphasize unique features or provide more information.
Strategies To Maximize ROI With Amazon PPC
- Start with small budgets – While it’s important to start with a small budget, you should also make certain that your bids are competitive. Keep in mind that your product may not show up in the first few pages of search results. Instead, it may take anywhere between 2-6 weeks for your product to show up there.
- Identify your sales funnel – Amazon’s sales cycle is different from those of other websites. However, if you understand your customers’ buying journey, it can be easier to create an effective PPC campaign.
- Make sure your product description is optimized – One of the first places customers look when searching for a product is the product description. If your description isn’t optimized for search, you’re likely to lose out on potential sales. –
- Be patient – While Amazon PPC can be an effective tool for driving sales, it doesn’t happen overnight. You may see limited results in the beginning, but as your budget grows, so will your ad impressions.
Currently, most online retail purchases are made through e-commerce platforms. One of the most popular e-commerce platforms is Amazon, which boasts over 350 million active users. Therefore, so many businesses are turning to Amazon PPC ads to drive traffic and boost sales. If you’re looking to increase brand awareness and drive more sales through Amazon, PPC is an excellent way to get started. You just need to make sure you follow these steps to ensure your campaign is successful from the start.
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