Amazon’s bidding process refers to the action of sellers displaying ads and placing a bid on them. The advertisers pay a fee when a user clicks on their ad. The placement of your ads will be determined by various factors, such as reviews, ratings, shipment, etc.
The PPC advertising model must be mastered if you are an Amazon seller. A good marketing strategy is essential for the sales of your brand or product.
What is Amazon PPC?
Amazon Pay-Per-Click (PPC) is an advertising solution used by brands, sellers, and agencies to create campaigns that will promote their products on the search results page.
It is a cost-efficient strategy because you only pay for the number of times your ad is clicked on. This helps generate a lot of traffic for your products, which ultimately results in long-term success.
How do Amazon PPC ads work?
The process of creating ads is quite simple. Amazon allows third-party sellers to advertise their products on the platform and charges them a fee every time a consumer clicks on that advertisement.
This can be done in two possible ways. You can either choose to set a daily budget or a lifetime budget. You can set the budget according to the goals you are aiming to achieve.
You should use a daily budget if you want to spend a particular amount every day. Consider the scenario when your daily bid is $1. The money gets deducted every time a user clicks on your ad.
The higher number of clicks, the sooner your budget will get exhausted for that particular day. If you opt for the lifetime option, the money will remain as long as the campaign runs or if you receive a large number of clicks.
Types of Amazon PPC Ads
There are three types of ads available on Amazon.
This is the easiest campaign to set up. Simply choose the products you want to advertise on the search results page, enter the keywords, and place a bid.
Amazon will then target the appropriate audience for your ads based on the keywords. Your advertisement will show up when a user searches for products that are similar to yours, which will increase conversion.
Sponsored Brand ads create brand awareness and engagement for your brand. Previously known as Headline Search Ads, this helps bring attention to more than one product. These ads are more elaborate when compared to Sponsored Products.
You can include details like a tagline, brand logo, and multiple products. Showcasing the logo helps users identify your brand and promotes returning customers.
Also known as Banner Ads, these ads help you reach the relevant target audience. They appear on and off Amazon, and on various affiliate websites as well. It targets the users who have viewed your products or searched for something similar.
This encourages your old customers to return to you and complete their purchases on Amazon.
How to Create PPC Ads
- Select the products you want to showcase.
- Make sure the products are retail-ready. What is retail readiness you ask? It means when the product has all the necessary and complete information mentioned. It includes details of the product, images, availability, star ratings, and shipping information. Once the product listing page is updated, the product is ready to be sold.
- Pick the campaign type and decide on the duration. If you are running seasonal campaigns, it is recommended to set a start and end date as the ad will stop running on the decided date. If you do not set an end date, the campaign will run throughout the year or until your budget runs out.
- The next step is to set your budget. Here are two ways of doing that :
- If you choose the daily option, you need to bid a fixed daily amount. The cost depends on your product, budget, and competition. The minimum amount that is required to spend per day is $1. A daily budget is like a safety net, it prevents your money from running out quickly. If you get plenty of clicks a day, once the daily limit is reached, your campaign will stop running until the next day.
- A lifetime budget is the amount of money you are willing to spend for the total duration of a campaign. The minimum bidding amount you can set is $100. Once the budget gets exhausted, your campaign will automatically stop running. Unlike a daily budget, a lifetime budget will have varying costs to pay amazon. It is recommended to showcase your best-selling products here.
- After you set your bid, you need to pick keywords for the campaign. These keywords will help your products show up on the search results page. Amazon keyword research tool on SellerApp can give you data regarding high-volume keywords related to your product. Use this tool to optimize your listing and perform better than your competitors.
There are two methods in which keyword targeting can be done.
- Automatic Targeting: Based on popular search terms, Amazon picks the most relevant keywords for your products automatically and shows your ads to potential customers. It is only used in Sponsored Products and allows sellers to create a quick and easy campaign. The keywords are selected based on close match, loose match, substitutes, and complements targeting options.
- Manual Targeting: You can use this method if you know what keywords will work for your products. This helps in having control over what you spend since you get to choose the keywords and bid on the ones that perform well. It can be used for both Sponsored Products or Sponsored Brands. We recommend the manual targeting method because you can control how much you spend on the keywords.
SellerApp advises using manual targeting if you are aware of the keywords to use and the appropriate bid levels for your campaigns. This will help you save money on advertising. Our team of experts will assist you if you’re still unsure of how to proceed.
- Your campaign is now ready to go live.
Types of Bidding Strategies
Dynamic Bidding – Down Only:
Available for Sponsored Products. Based on how the ad is doing, if the possibility of conversion is low, Amazon will reduce the bid from the amount you have set.
Dynamic Bidding – Up and Down:
Amazon automatically enhances your bids depending on the performance of your campaign. If there is a likely conversion, Amazon increases your bid, or if a conversion is less likely to happen, then it decreases the amount from the bid you have set for the campaign.
If you do not want Amazon to automatically optimize the bids, you can select the Fixed Bids option. The amount you set for the campaign will only be used unless you change it.
Keyword Match Types
There are 3 ways in which Amazon decides what kind of keywords to add to your campaigns. A broad match is the least restrictive and an exact match uses the narrowest keywords.
Sponsored products or display ads use broad match by default. This type targets the widest range of shoppers as it includes keywords that can be found in any order and even related search terms.
For example, if you search for ‘Notebooks’, the search results will show multiple other keyword variations like Ruled or Unruled Notebooks, Notebook for Students, Notebook Diary, Notebooks for school, etc.
When a user types a phrase or set of keywords linked to your products into a search engine, your ads will show up if those words are included in the keyword. It is directed towards more relevant traffic and is more restrictive compared to Broad Match.
For example, if you search for ‘Notebooks’, sponsored ads with the following keywords will appear Single Line notebook, Soft Cover notebook, Notebook Combo, Notebook Set, etc.
This is slightly different from phrase match. Your ad is displayed when the user types the exact term that you have selected. It could include phrases or a single word but it must appear in the same order. This is the most restrictive match type but it ensures direct traffic. It also includes plural words.
For example, if you search for ‘Spiral Notebooks’, you will see ads with products that include Spiral notebooks or notebooks, Spiral Left Handed notebooks, Spiral notebooks pack of 6, etc.
PPC Ad Placements
- Sponsored Products appear on the top of the search page, sides, bottom, or even within the search results page.
- Sponsored Brands also appear on the top, sides, bottom, or within the search results page.
- Sponsored Display appears as banners on product detail pages or third-party websites.
Advantages of Amazon PPC Ads
Amazon’s Pay-Per-Click Advertising provides multiple benefits for sellers.
Increase Brand Awareness:
PPC ads can increase your brand visibility. Whether you are a new brand or an already established brand that doesn’t get enough traffic for newly launched products, you can create brand awareness with advertisements that stand out. By using the right keywords, you have the advantage of bringing your products to the top of the page. This helps shoppers remember your brand and recognize your products.
When shoppers visit the Amazon website, chances are that they already know what they want to buy. Showing your ads to them will encourage them to buy your products, resulting in higher sales.
Customize your Ads:
As a seller, you have the complete freedom to customize these advertisements that fit your goals. You have control over the keywords, target audience, placement, and budget of these ads.
Reach International Market:
A PPC ad has the potential to reach global markets. You may generate impressions and conversions from customers all over the world by choosing the relevant keywords.
Arishekar N is the Senior Director of Marketing and Growth at SellerApp, an e-commerce data analytics solution. He is responsible for overseeing the development and implementation of marketing strategies, as well as increasing process efficiency by executing cutting-edge Search Engine Optimization strategies at SellerApp.
Arishekar has over 10 years of experience in marketing analytics and SEO. He has worked as a Digital Specialist for the tech giant IBM and most recently as the Senior Marketing Specialist for ZioTive Technologies where he enhanced their site structure by increasing website and mobile usability. Previously, he worked as a Senior SEO Analyst for Star Group where he was responsible for managing SEO Audits and analytics.