Amazon PPC Advertising In Detail
Amazon PPC (Pay-per-Click) is a powerful advertising tool that can increase product visibility and boost your sales.
Nowadays, everyone depends on technology, which has opened up countless opportunities and helped build many reputable businesses. As a result, shopping online rather than visiting physical stores is much more popular than before.
Amazon was among the first companies to recognize this opportunity and has transformed the global market. Using Amazon as a platform to build and grow your business is a wise choice, so here’s a detailed look at this simple but effective advertising model.
What is PPC on Amazon?
When customers visit the Amazon site, they already know what they’re looking to buy in most cases. It’s not very likely that the buyers will browse through the platform for hours while looking for a potential purchase.
In other words, the PPC abbreviation stands for “pay-per-click.” PPC is an advertising model in which Amazon receives a fee from advertisers whenever a shopper clicks on their ad. Advertisers pay this fee for every click, which is how the model got its name.
How does Amazon PPC work?
In essence, this advertising model is an auction-based method of advertising. Sellers pay a fee to Amazon every time a potential buyer clicks on their product. Understanding the intricacies of this advertising method requires understanding the three types of ads on Amazon. These ad types include Sponsored Products, Sponsored Brands, and Sponsored Display Ads.
Sponsored Products
Ask any Amazon PPC expert, and they’ll most likely agree that this is one of the most popular forms of advertising through Amazon. Sponsored product ads enable sellers to promote individual products among Amazon search results.
One of the reasons this method is popular is because sponsored product ads are similar but more affordable than Google Ads. However, when looking to get the most out of your ad campaign, it is crucial to choose the right PPC Amazon keywords.
After selecting your keywords, the final step is to determine your campaign budget.
Sponsored Brands
This method can be useful if your primary goal is to promote your brand. These ads let you promote up to three products in the top spot above the search results. Additionally, you can promote a custom headline and brand logo. You can also use them to redirect potential customers directly to an Amazon landing page.
However, if you’re entirely new to all this, and everything above makes as much sense to you as reading Chinese, don’t worry. Amazon PPC agencies can take care of all the technicalities and be the right solution if you’re just getting started.
Sponsored Display Ads
These ads’ sole purpose is to send potential buyers to the advertised Amazon products’ detail pages. You can benefit from SDAs in two ways: the first is that these ads display relevant products on Amazon. The second way is that they also show relevant ads on external websites to potential customers who are either visiting specific Amazon products or have visited them previously (remarketing).
How do Amazon PPC ads auctions work?
The second-price auction determines the CPC (cost-per-click) for each ad on Amazon. The process begins with each advertiser submitting a default bid for their ad (which is the maximum amount they’re willing to pay for a click).
Here’s the exciting part of the auctions: if your bid is the highest, you win the highest ad position – in other words, ad rank #1. You will also pay the highest cost-per-click. However, the amount you bid is not the amount you’ll have to pay. As the highest Amazon PPC bidder, you’ll need to only pay $0.01 more than the second-highest bid (hence the name “second-price” auction).
Here’s an example to demonstrate the auction. Let’s imagine you have three bidders and their bids are as follows: Person 1 is bidding $2,50, Person 2 is bidding $3,00, and Person 3 is bidding $2,20. The highest bid is that of Person 2, but instead of paying $3,00 for the ad, they only pay $2,51 (the second-highest bit was Person 1 ($2,50) + $0.01).
How To Use Amazon PPC To Your Advantage
The definition of sales is all about providing value to customers and profiting in the process. To achieve this goal, a seller first needs to make their product visible and attractive. Fierce competition also creates the need for greater product visibility.
Amazon’s Pay-per-Click campaigns help you target more potential customers in a better way. In other words, these campaigns help drive sales by presenting your products to more clients, more accurately, and in a way, better serve their needs.
Amazon PPC Targeting types
When looking to improve your Amazon business, you must first identify and incorporate the right strategy. In terms of Amazon advertising, there are two types of campaign targeting types available for generating sales through the Amazon platform. These campaigns are:
- Auto
- Manual
Auto
Auto campaigns are popular because they are effortless to set up. The great thing about this type of campaign is that all aspects require minimal to no input (many refer to auto campaigns as the best Amazon PPC software).
In other words, Amazon identifies the keywords from various sections of your product listing (description, title, etc.) to decide when to display your product ad.
Manual
With this type of campaign, the seller defines the bid rates and keywords. Amazon then displays the product ad for the search term depending on the keyword match type. Because the seller manually identifies the keywords, manual campaigns usually have a more precise target audience.
Manual campaigns require a lot of experience and knowledge, making them ideal for PPC experts.
What is Amazon PPC Software?
If you’re just getting into online sales, you probably still haven’t mastered all of the necessary skills for marketing your products. There are various ways to improve the effectiveness of your campaign and increase sales.
Amazon PPC software helps with campaign management and automation. Management and automation software helps minimize risk while maximizing your profits. Therefore, you can streamline your campaigns and sales, leading to better results with less personal input.
PPC automation software has proven to be particularly useful in achieving Amazon PPC optimization. While automated Amazon campaigns can be helpful, there are also third-party PPC software solutions you can consider. Among these solutions, there are several that stand out: PPC Entourage, Teikametrics, Zon.Tools, Ignite by Seller Labs, Helium 10 ADS, and more.
Amazon PPC Advertising: Yes or No?
Amazon is a global marketplace, and as such, attracts countless sellers offering exceptional value to shoppers. Due to fierce competition, it is crucial to stand out by using any means necessary.
Amazon PPC is one of the most straightforward, practical, and affordable ways to get your product to the top. As a result, with less money invested than in some other campaigns, you can increase your organic traffic, conversion rates and boost sales by using this straightforward advertising method.
To help you make your decision, we’ve put together a list of questions we most often get asked.
FAQ
How much does Amazon advertising cost?
Sponsored Display Ads, Sponsored Brands, and Sponsored Products are cost-per-click ads. Meaning, you only need to pay if and when a potential buyer clicks on your ad and have no further costs in the process. Unlike CPC ads, Video Ad and Display Ad campaigns vary depending on their placement and format. There is also no charge for creating an Amazon store.
How can I find my ad if I’ve just started a campaign?
For the most part, you will not be able to see your ad right after you start your campaign. For your ad to appear, you must first win the auction, and even then, it can take Amazon up to four hours to display your ad. If you need to look at the big picture, head to the reporting page to observe your conversions, clicks, and ad impressions.
Why should I use Sponsored Products?
Sponsored Products are an excellent way to increase your sales. How? Whenever shoppers search for relevant products on Amazon.com, Sponsored Products will display your ads. You only need to pay if and when a potential buyer clicks on the ad, meaning there are no monthly fees. Sponsored products can serve different purposes, and include seasonal promotions, clearance items, offers with low glance views, unique selections, new offers, product visibility, and more.
How can I pay for my advertising spend?
There are two ways you can pay for your advertising spend. The first is charging the spend to a credit card, and the second is deducting the amount from your seller (vendor) account balance. The charge goes through in three possible cases. The first is having a balance due for the previous month no matter how much credit limit you may have.
The second case is if you see additional clicks that meet or go above your current credit limit (which starts at $50 and increases whenever you reach it and pay the amount successfully). The last instance in which a charge goes through is when you accumulate enough clicks on your ad to equal $1.00.
How do I research keywords for my Amazon PPC campaigns?
If you’re new to Amazon PPC advertising, the safest choice is to use the suggested keywords while creating your campaign. If you’re going with Sponsored Products, you may benefit from an automatic selection of relevant keywords through automatic targeting.
After you get your automatic campaign underway, we recommend you look into your advertising reports. These reports will tell you which keywords specifically lead to your ad clicks and generate sales. Once there, simply select the top-performing keywords and create a Sponsored Product campaign with manual targeting or a new Sponsored Brands campaign.
If all of this sounds too complicated, feel free to contact us! We typically respond in a few hours.
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