Amazon PPC: The Ultimate Guide to Amazon Sponsored Product PPC Ads

Advertising on Amazon is one of the most effective ways to increase visibility and drive sales of your products. With over 66% of product searches beginning on Amazon, the largest eCommerce giant paves a lucrative opportunity for sellers to showcase their products and increase sales. Amazon PPC has an average CTR of 0.36% with an average conversion rate of 9.47%. This is one reason why Amazon is the 3rd most popular online advertising platform today.

The number of e-marketers leveraging the potential of Amazon PPC is growing at a rapid pace. As a seller, if you do not have a definite Amazon PPC strategy in place, you will be missing out on a major segment of your audience and advertising goals too. Therefore, we bring to you a comprehensive guide to Amazon PPC that will help optimize your traffic, get valuable insights, and generate more sales.

What is Amazon PPC?

Amazon PPC is an online advertising model where product advertisements are displayed on Amazon’s search engine results and product pages to improve visibility and drive more sales. It is a form of pay-per-click advertising where marketers pay a fee to Amazon only when a user clicks on the ad, and not when a user views the ad. Amazon pay-per-click advertising is effective for sellers to:

• Optimize your web traffic: Reach the right target audience at the right time and with the right products they are looking for. This will help trigger a purchase decision.

Drive increased sales: Amazon PPC allows you to link potential buyers to your product portfolios and product description pages so they can seamlessly find the products they want.

Get actionable insights: With their powerful analytics, you can easily track and analyze the rate at which potential buyers are finding and purchasing your products. You can leverage these valuable insights to optimize your PPC campaign and drive better results.

How Does Amazon PPC Work?

There are three types of Amazon ads as discussed herewith:

  • Sponsored Products Ad: These are ASIN- and keyword-targeted ads that allow advertisers to promote their products on Amazon product pages and shopping results.

Source: Amazon

Who is eligible for Sponsored Product ads?

This ad type is available to book vendors, vendors, professional sellers, agencies, and Kindle Direct Publishing authors. To qualify for advertising, it is important for the products to belong to one or more eligible categories and also be eligible for the “Featured Offer”

  • Sponsored Brands: This type of ad is most effective to boost brand awareness. Your brand logo with a customized headline will appear on the product detail pages and shopping results. The advertiser has the flexibility to showcase up to three products in the ad and get the top spot in Amazon’s search results when a potential buyer searches for a product related to yours or in your niche. Sponsored Brands ads enable you to direct interested buyers to a custom landing page on Amazon or to your Amazon Stores page.
Amazon Search Results
Source: Amazon

Amazon now provides the option to link video ads to your product detail pages.

Who is eligible for Sponsored Brands ads?

The ad form is available to book vendors, agencies, vendors, and sellers subscribed with Amazon Brand Registry.

  • Sponsored Display: Sponsored Display ads are a great way to extend your reach and reach your potential buyers on and off Amazon. The ads are displayed on Amazon as well as on external websites to buyers who are already visiting or have earlier visited particular products on Amazon.
Amazon PPC
Source: Amazon

Who is eligible for Sponsored Display Ads?

This ad form can be used by professional sellers who have subscribed for Amazon Brand Registry; agencies having clients selling products on Amazon; and vendors. 

Now that you know different types of Amazon PPC advertising available at your disposal, here’s how the ad auction works:

  • A buyer searches Amazon for “baby oil.” Baby oil is the primary keyword here
  • Amazon will compile the most relevant ads that target the keyword “baby oil”
  • The ad that bids high on the keyword will win the auction
  • Amazon will display only the winning ad with the highest bid to the buyer
  • The buyer will click on the ad and the advertiser will pay Amazon the second-highest bid

Yes; the advertiser will pay the second-highest bid amount and not the winning bid when a shopper clicks the ad. For instance, if your winning bid is $5 and the second-highest bid is $4, then you will need to $4.01 to Amazon, i.e., only $0.01 higher than the second-highest bid. This second price auction is an interesting feature of Amazon PPC.   

Now, let’s understand how the bidding works for Amazon PPC.

The Cost-Per-Click (CPC) for every Amazon pay-per-click ad is determined on the basis of a second-price auction. Here, every advertiser needs to submit a default bid, i.e., the maximum amount they are willing to pay “per click” for their ad. One who bids the highest will win the highest ad position on Amazon search results.

Striking the winning bid for Amazon’s second-price auction is a complex process and you might need a professional PPC advertising company to deliver the best results.

How to Optimize Your Amazon PPC Strategy?

Amazon PPC advertising with a good CTR and conversion rate might seem too good to be true. However, it delivers PPC results in real-time for advertisers who know how to leverage the platform to its full potential. Unearth how professional marketers optimize their Amazon PPC campaigns:

  • Set a Realistic PPC Goal

To begin with Amazon PPC optimization, it is first important to set the campaign goals for every product you are advertising. Determine what you want to achieve – boost sales, drive visibility and brand awareness, improve your bottom line. Study your ACoS targets to define the best strategy for each of your PPC goals.

  • Identify the Best Performing Keywords

To discover the top-converting keywords for your PPC campaign, you’d need to log into your Amazon Seller Central account. At the top of the page, click the tab “Reports” and then choose “Advertising Reports.”

Source: Tinuiti

The top of the page will display various types of advertising reports that you can access. Select Campaign, Report Type, and Period. Click the option “Create Report.”

Source: Tinuiti

From the right column, click the option “Download” to access your search term report.

Source: Tinuiti

This Search Term Report is quite effective in finding all your keyword data once the PPC ads have been running a few times. You can download this data frequently to monitor how your keywords or search terms are performing. This will help you optimize your keyword bidding strategy, remove or add keywords.

  • Use Long-Tail Keywords

Using the most relevant and high-potential long-tail keywords is one of the best ways to optimize your Amazon PPC campaigns and derive quality results. These keyword phrases can direct a huge proportion of targeted search traffic, even the ones that in the midst of the sales funnel.

There are several keyword search tools online that you can use naturally in your PPC ad content and product listings to increase visibility and click-through rate on Amazon.

  • Use a Combination of Automatic and Manual PPC Campaigns

For Sponsored Product Ads, you can create two types of campaigns: automatic and manual. If you are just starting off with Amazon PPC, it is good to run a few automatic campaigns first. Here, you will only need to mention the budget and Amazon will take care of the most important aspect – finding keywords that are the best fit for your desired category and product descriptions.

Initially, automatic campaigns are good to go. But once you gain a strong understanding of how the keywords work, you can switch to manual targeting. This gives you the flexibility to choose the keywords on which you wish to place the bid. You can also test different keywords, evaluate performance, and make relevant changes to the strategy with manual campaigns.

How Much Does Amazon PPC Cost?

There is no fixed cost for Amazon PPC advertising because it is purchased on the basis of Cost Per Click. That means the cost will vary depending on how much the advertiser is willing to bid on specific keywords, keyword selection, product, and competitors. The best way is to start small and then increase your budget gradually based on how your ads are performing.

How Long Does PPC on Amazon Take to Get Results?

Typically, PPC campaigns take three months to show quality results. This time should be focused on gathering insights from your ads, which can be leveraged to improve audience targeting, keyword targeting, and your bids.

With Amazon PPC automatic campaigns, you can expect to see the result within a few days. Manual ad campaigns are more strategic and therefore, can take 8-10 weeks to show effective results.

Get Expert Help with Amazon PPC

Pay-per-click advertising on Amazon is a proven way to improve brand awareness and visibility of your products on the world’s largest eCommerce platform and drive more sales. However, building and optimizing an Amazon PPC campaign is complex and time-consuming, especially if you have a vast product catalog. That is where hiring a professional PPC advertising company can help. They have the knowledge and expertise in Amazon PPC to help generate quality results. 

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