In this episode, we cover Amazon PPC.
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In this episode, we’re going to be talking about what is Amazon PPC, how to set up those initial campaigns, how to do your keyword research to know what keywords to bid on, and we’ll dig a little bit into optimizing your Amazon PPC.
Amazon Pay Per Click is an advertising platform offered through your Seller Central account. If properly created and managed, a PPC campaign on Amazon can help you sell more inventory faster, while increasing your organic rankings as well.
I like to set up my Amazon PPC campaigns immediately, as soon as I launch my product. Other people will say they wait until they get a few reviews because that’s when the listing converts better but I actually prefer to turn mine on right away and use it as part of my launch strategy.
Think of PPC as a hierarchy of things that build a full account. Here’s a visual aid to describe it best:
You have the choice to set your keywords as broad, exact, or phrase match.
When you start a new campaign, it’s always best to start broad, so that you can reach a wider audience and spot keywords you had not already thought of or researched. Then, once you can see which keywords perform well for your product, you can hone in on those customers with phrase and exact match.
So the first thing you want to do is go over to the Advertising tab in Seller Central and click on Campaign Manager.
In here, you’ll see the Create Campaign button on the top left.
There’s two different types of campaigns that you can create inside of Amazon Seller Central. The first one is Sponsored Products and the second one is Sponsored Brands.
Let me digress for a moment and show you the difference between the two. I did a search for the keyphrase “hooded baby towel” and as you can see below the big bar at the top is a Sponsored Brand ad and the blocks below are Sponsored Products ads.
For the purpose of this Million Dollar Case Study episode, we’re going to be talking about Sponsored Product ads as they are the most cost-effective for us. Furthermore, in order to run Sponsored Brand ads you must be Brand Registered, which, if you remember from Episode 7 (Branding, Packaging and Trademarking), you have to have a trademark to begin the process of Brand Registry.
So now let’s go ahead and hit the Continue button.
Let me explain the difference between automatic targeting and manual targeting. With automatic targeting, you actually don’t have to input any of the keywords that Amazon wants you to bid on. All you do is essentially turn it on with your budgeting and Amazon chooses what keywords they think are relevant for your particular product.
When I’m first starting out, I actually run automatic and manual campaigns, and then down the road when I’m trying to fine tune it, that’s when I switch to only manual targeting because you can fine tune it a little bit more, and you can get your ACoS down.
💡ACoS (Advertising Cost of Sale) – an Amazon-specific metric so it’s not something you would find on other PPC platforms. It measures the sum of your advertising costs and divides them by the sales revenue an ad generates. Advertising Costs / Sales Revenue = ACoS percentage
For Ad group name, I like to split this up by variation and match type. With automatic targeting, there’s actually no match types so for this ad group we’ll name it based on our variation. We have a Black Keyboard Tray and a Bamboo Keyboard Tray, so here we’ll put “Bamboo”. I go down, I select that product and click Add.
In the Bidding section, Amazon gives us a little insight as to what the competition is like in our category. If you look directly below the Default bid input field, Amazon has a suggested bid range of $0.59 to $2.50.
Again, since this is my launch phase and I’m trying to be a little bit more aggressive to get those extra sales, I usually go towards the higher end of their bid range, so I’m going to put $1.75, which is in the upper area of the suggested bid.
You can add negative keywords at the campaign level or at ad group level. When you do this, it will prevent your ads from showing when consumers search for those terms. There are two main reasons why this is useful:
At this stage we don’t have any negative keywords to enter so I’m going to go ahead click Launch Campaign and just like that I’ve set up my first campaign!
Amazon’s platform is a bid-type auction, and as per the automatic campaign I just set up, I’m telling them that I am willing to spend up to $1.75 per keyword (at a maximum of $50 per day). Now, if someone else is bidding for those same keywords for, say, $1.70, then Amazon will charge me $1.75 for that click. If the next highest bid is, say, only 40, 50 cents, then they’ll only be charging a little bit more than that, say 55 or 60 cents.
Amazon charges you every time a customer clicks on your ad. So it doesn’t matter how many times your ads are shown to customers; it also doesn’t matter how many times people end up purchasing your product. All that matters is how many times a customer clicks on your ad, that’s when Amazon charges you up to your default bid.
Because a manual campaign allows you to upload keywords you find on your own, you’re going to need some additional tools like Keyword Scout.
You’ll start off the same way as we did with the automatic campaign:
Let me show you how I generated my Master List of keywords from Keyword Scout, which is part of the Jungle Scout web app. If you already have access to the Jungle Scout web app, fabulous, you don’t have to spend any extra money, and you have unlimited access to Keyword Scout.
I’ll go ahead and enter “keyboard tray”, and right away I’m seeing over 2,000 results for suggested keywords.
I’m seeing things like Search Volume, Recommend Giveaway, I also see over here the Recommended PPC bids, both exact match and broad match.
What I’m going to do next is I’m going to take all of the keywords from Keyword Scout and export them to a CSV file.
Next, I’m going to copy and paste in my keywords into a Targeting campaign. For Default keyword bid I’m going to put $1.75.
For the match type, I’m going to choose the broad match type, which is the same thing that I have for my ad group settings.
I’m going to go ahead and click on Add keywords. And after doing that, you’ll see that Amazon’s giving me suggested bids for each individual keyword.
The nice thing about manual campaigns is we can optimize it on a keyword level, unlike automatic campaigns where we rely on Amazon to do the campaign optimization.
Just like we did with the automatic campaign, I’m not going to add any negative keywords until I have some data to work with. So I’m going to go ahead and click Launch campaign.
All I’ve done here is my broad match type manual campaign for the Bamboo Keyboard Tray so I need to repeat this same process for phrase match and exact match types for the Bamboo Keyboard Tray, and then do all three of those match types for the Black Keyboard Tray as well.
What you’ll find is different keywords perform better for different match types, and long-term when we’re optimizing these campaigns for particular phrases, that’s the different match types that we’ll use. However, without collecting some of this data first, we don’t know what keywords are going to perform best for different match types.
That’s it! Amazon can sometimes take 48-72 hours to report sales for a given keyword ad, so you need to wait it out. Let your campaigns run for at least two weeks before making any major decisions on how you will tweak them moving forward
Once the data is coming in, it’s time to look a little closer and see what’s working, what’s not, and sharpen up that money-making machine.
Here is the information you will need to know in order to understand what number works for you:
Let’s use Jungle Stix as an example:
Subtracting the COGS, FBA fees, and Miscellaneous from the Selling Price leaves $9 in profit per unit (27-4-11-3=9). So we can spend up to $9 to get a sale and still be profitable. To calculate our ACoS threshold for our break-even point, simply divide the net income from the Selling price, ie $9/$27=.33. This leaves us with a 33% ACoS threshold, meaning that we would be making money on any keyword that has a Cost of Sale at 33% or less.
If a keyword is converting but at an ACoS that is above your targeted threshold, you don’t necessarily need to pause the keyword. Instead, you can just adjust your bid accordingly. Try reducing bids in small increments so that you can find the sweet spot between getting conversions and keeping your ACoS down.
I know this can seem a little overwhelming at first but unlike other PPC platforms (Facebook Ads, Google AdWords), Amazon’s PPC platform is relatively easy to learn. You’ll be a pro in no time. All it takes is a little bit of practice and you’ll be well on your way to raking in those sales!
Now, if you’re a busy person, you could also outsource this to a savvy PPC virtual assistant through Jungle Market.
Well, that’s all for now! Now it’s YOUR TURN!
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