In this article, I am going to discuss “advanced” Amazon PPC strategies. I put advanced in quotation marks because the strategies here are not that advanced. But I am not going to sell you on the benefits of using paid Amazon advertising. I am going on the assumption that you understand that Amazon is increasingly a pay-to-play marketplace.
Related Listening: Podcast 147- Amazon PPC Step-by-Step Guide
Amazon currently allows you to bill advertising charges to a credit card. Make sure to do this within your account (instead of having them deducted from your Amazon payments) to maximize credit card points.
Types of Amazon Advertising
There are several main types of advertising on Amazon:
- Sponsored Products
- Sponsored Brands (Previously Headline Search Ads)
- Product Listing Ads/Product Targeting Ads
- Sponsored Display
- Miscellaneous other ‘exclusive’ advertising options for select merchants
Sponsored products are by far the most powerful part of paid advertising with Amazon so I will devote the majority of the article to this.
A well-structured Sponsored Products campaign will consist of the following specific campaigns:
- Automatic keyword campaign
- Manual keyword campaigns
- Manual Exact Match Keyword Campaign
- Manual Broad Match Keyword Campaign
- A manually targeted product campaign Sponsored Brands
Organizing Your PPC Account and Properly Using Portfolios
One of the most important parts about having ANY well-performing PPC account – be it Amazon or Google – is to have a well structured and organized account.
Amazon made this far easier in late 2018 when they rolled out portfolios. Portfolios allow you to organize your campaigns into various groups and quickly see a snapshot of that group’s performance.
The most common organization technique is to have every Portfolio contain all of the advertising campaigns for one product. So, for example, my Portfolio ATVBG-00 will contain all of the campaigns shown below.
I like to start all of my campaigns with the same keyword and add in parenthesis the type of campaign after (i.e. Manual Exact Keyword). This makes comparing the performance of each campaign very easy and also allows me to quickly see if I’ve forgotten a particular type of campaign for a product.
With automatic campaigns, Amazon guesses what keywords are relevant for your listing. It’s mostly very accurate but requires consistent grooming. There are two reasons why your account must use automatic campaigns:
Reason #1 to Use Automatic Campaigns: Automatic campaigns are the best way to get your products to appear in the Sponsored Products related to this item section of an Amazon product listing. Manual keyword targeting will not have your products shown on this section of a listing.
Reason #2 to Use Automatic Campaigns: Automatic campaigns are the best way to harvest keywords that can be used not only for your Amazon Manual Keyword campaigns but also Google Ads.
Grooming Your Automatic Campaigns – Peel, Stick, and Block
The key to having a profitable automatic campaign is to be constantly adding negative keywords to your campaigns. For the first 3-6 months of creating a campaign, I am adding new negative keywords each month. This is a fundamental part of a Peel, Stick, and Block strategy (thanks for the terminology AdBadger)
The basis of this strategy is as follows:
Peel: Peel your best-performing keywords and ASINs from an automatic campaign
Stick: Stick them to either a Manual Keyword Campaign or Manual Targeted Campaign
Block: Block these keywords (add them as a negative match) to your Automatic Campaigns
The goal of this strategy is to maximize your exposure for high converting keywords and avoid bidding against yourself.
Blocking Non-performing Terms in Your Automatic Campaigns
In addition to blocking (adding as negatives) keywords and key phrases that you will be bidding on in your manual campaigns, you should also be blocking completely irrelevant terms from your automatic campaigns. A general rule of thumb is that you should block terms once they reach 20-40 clicks and no sales activity OR if you intuitively know they are irrelevant.
How Does Amazon Determine My Bid Cost?
Amazon has an auction system for bidding on keywords but the highest bidder does not necessarily win.
Much like Google Ads, Amazon assigns a Quality Score to your ads. The higher your quality score, the low your CPC costs; the lower your quality score and the more you’ll pay.
Your Quality Score is determined by your conversion rate, Click-through-rate (CTR), sales-history, relevancy, etc. Unfortunately, unlike Google, Amazon does not allow you to see your Quality Score at this time.
Manual Keyword Targeting Campaigns
I let my automatic campaigns run for approximately 30 days and then I review a keyword report from my automatic campaigns to peel the best keywords (and ASINs but I’ll discuss that later) from the report. You can download these reports from within the Advertising Reports section of your Seller Central account.
Once you download your reports open them in your favorite spreadsheet app. Filter the sheet to include only one product’s automatic campaign and then sort by 7 Day Total Sales. I then peel any keywords that have more than one sale in 30 days and that are below my target ACoS.
So for me, I would remove the keywords atv rear storage and atv rear cooler and add these into Manual Keyword campaigns (see below). I will then block these keywords as negative exact match into my automatic campaigns to avoid bidding against myself.
What’s with all these ASINs in my reports?
At this point, you may have noticed a bunch of ASINs under Customer Search Term. These ASINs are competitor’s product listings that Amazon automatically displayed your ads on. We will use these ASINs for our Manual Product Targeting Campaigns below.
Creating Manual Campaigns and Bidding
I now have a list of high converting keywords. We now stick these keywords into two types of campaigns:
- Manual Exact Keyword Campaigns
- Manual Broad Keyword Campaigns
If you want to maximize ROI and/or are lazy, you can eliminate Manual Broad Keyword campaigns altogether (I also do not typically use Manual Phrase Keyword campaigns because these are effectively covered under our Manual Broad Keyword campaigns).
The keywords in the Manual Exact Keyword Campaigns are then blocked as Negative Exact Match keywords in our Manual Broad Campaigns.
Keyword Match Types 101: Exact, Phrase, Broad
As per Amazon, the different types of keywords can be defined as follows:
Exact: Exactly matches the keyword or sequence of keywords
Phrase: Contains the exact phrase or sequence of keywords.
Broad: Contains all the keywords in any order and includes plurals, variations and related keywords.
Assuming the keyword is garlic press, the following keywords would/could be triggered.
Even in an Exact Match campaign, you must be very careful using Manual Broad as Amazon will use variations and related keywords. Amazon will guess related keywords and variations and can often guess wrong (i.e. garlic powder could potentially be triggered for the keyword garlic press). Be vigilant and monitor your Exact Broad campaigns.
Manual Product Targeting Campaign
In November 2018, Amazon rolled out Manual Product Targeting. Product targeting allows you to target your ads to appear on competitors’ listings under “Sponsored Products Related to this Item”. Previous to this update, the only way to have your ads placed here was through Automatic Campaigns and you had no control over what items your ad appeared in.
Product targeting campaigns may appear in the same location as Sponsored Products in addition to under the Buy Box and below bullet points. However, 90% of the time they are going to appear somewhere on a Product Detail page such as below.
How to Set Up Manual Product Targeting
Setting up these ads is easy.
- Create a manual campaign and choose Product Targeting.
- Take your high-performing ASINs generated in your automatic campaigns and paste them into the Individual Products field (shown above). Note, you will have to convert all your ASINs to Upper-Case (use excel function =Upper()).
- Copy these ASINs to the Individual Products list.
In addition to targeting by ASIN, Amazon allows you to target by category and other variables. In my experience, targeting by these wider variables on Amazon such as through Product Listing Ads they almost always perform terribly and I do not recommend targeting like this.
Given how well individual product targeting has performed in Automatic Campaigns and Product Listing Ads, you can expect these campaigns to perform equally as well.
Sponsored Brands (Formerly Headline Ads)
Sponsored brands are the ads that appear on the top of search results pages. They appear in groups of three, meaning that you need to have at least three products to advertise.
Amazon suggests several bidding strategies for Sponsored Brands. In my experience, the successful keywords from your manual campaigns will perform, more or less, equally as well for Sponsored Brands. Subsequently, I do not recommend bidding on complementary products or out-of-category keywords as Amazon does.
In my A/B testing, Sponsored Brands has a higher ACoS than Sponsored Products and will result in far fewer sales.
Send Sponsored Brands Traffic to Landing Page or Store Page?
When you are creating your Sponsored Brands ad, you have a choice to send traffic to a New product list page consisting of three products OR to an Amazon Store Page. Sending products to a New product list page will almost always convert better than an Amazon Store Page unless it is a branded search term you’re bidding on (i.e. Nike, Apple, etc).
How Much Should Spend on Advertising?
This all brings up an important question: how much should you spend on advertising?
I did a survey of 5 higher volume sellers. For most sellers, advertising tended to account for 25-35% of their total Amazon sales. Newer brands tended to have an advertising account for more of their sales. This is consistent with both my personal experience and talking to other sellers off the record.
When deciding on a target ACoS, for newer brands (<6 months old) I like to bid up to my break-even ACoS. On the other hand, for older brands (>6 months old) I like to bid up to half of my break even ACoS. In other words, for an older brand, I pay half of my gross profit on advertising.
So for example, if I have a widget for $30 and make $5 gross profit per item this means I can have an ACoS of 16.67% and break even. Once the brand is established (> 6 months old) I would bid up to 8.335% ACoS. If I have a greater gross profit on an item I can, of course, pay more on advertising.
Amazon Dynamic Bidding and Placement Bidding
In early 2019 Amazon rolled out something called Dynamic Bidding and Placement Bids (which replaced the former Bid+). These are accessible through your Campaign Settings.
Dynamic Bidding adjusts your bids up if it’s likely to result in a sale. Placement Bids allow you to pay a premium for appearing at the top of search results and on product pages.
Dynamic bidding is similar to Enhanced CPC in the Google Adwords world. Normally smart bidding like Enhanced CPC or Dynamic Bidding result in a marginal increase in sales but dramatic increase in advertising costs. I suggest you DO NOT turn on Dynamic Bids – up and down and instead select Fixed bids or Dynamic bids – down only as your bidding strategy.
Placement bidding is a different story. Much like I recommended using Bid+ I also recommend that you SHOULD use Placement Bidding.
In previous tests, enabling Bid+ (now called Placement Bidding) increased sales by about 67% on those campaigns and increased the ACoS by around 24%.
Dynamic bidding now gives you much control over bidding and similar or better results should be expected.
For most advertising campaigns Product Pages will produce most of their sales. Again, these normally appear on Competitor Product Detail Pages as Sponsored Products Related to This Item.
After Product Pages, Top of Search on Amazon will typically result in 200-400% more sales than the Rest of Search on Amazon and at a lower ACoS.
Subsequently you should increase your bid amounts for Top of Search and Product Pages and decrease bids for Rest of Search. Increased in bidding amounts will vary by account but I recommend a minimum of 10%.
Using Software or Agencies to Manage PPC
There’s a number of software tools available to help manage your Amazon PPC including Sellics, Cash Cow Pro, and countless others. These tools can definitely help automate your bidding, blocking poor performing keywords, etc. However, these are all tasks that can be easily done by an individual (either yourself, staff member, or VA).
In terms of using an agency, it’s my firm opinion that delegating any paid traffic campaign management to an agency normally sees very poor results, after the initial setup stage of the account. For almost all companies (especially smaller companies) PPC is best managed in-house.
Other Advertising/Marketing Options on Amazon
Amazon has a plethora of other advertising options, mostly available through Amazon Advertising, not available to most third-party sellers. These include:
- Sponsored Display
- Category sponsorships (entire category sponsorships)
- Video advertising (through Prime video and elsewhere)
- Off-Amazon display advertising
Sponsored Display is the only real other advertising option that is viable for most average sellers at this time. The other advertising options mentioned above are more restricted and also often have very large minimum purchase requirements.
Sponsored Display ads essentially allow you to retarget your products off of Amazon. It was released as a beta in early 2019 and rolled out to the masses later in the year. Amazon promises that eventually you’ll be able to get some fairly granular targeting with it but as of this writing the targeting is very limited. In our brief testing and talking with others, results have been fairly limited.
This guide should give you the basics of a smooth running advertising account for all of your products.
Do you have any questions or comments regarding setting up and running your campaigns? Post a comment below.
Dave Bryant has been importing from China for over 10 years and has started numerous product brands. He sold his multi-million dollar ecommerce business in 2016 and create another 7-figure business within 18 months. He’s also a former Amazon warehouse employee of one week.