THE ULTIMATE GUIDE TO HIGH-PERFORMING. Amazon Sponsored Ad PPC Campaigns

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1 THE ULTIMATE GUIDE TO HIGH-PERFORMING Amazon Sponsored Ad PPC Campaigns

2 Table of Contents Ever Hear the Saying Traffic is King?... 3 The Basics: Why Use Amazon Sponsored Product Ads?... 5 Serious Benefits of Amazon Sponsored Product Ads... 7 Using the Search Term Report to Optimize Your Campaign and Your Amazon Listings...13 Optimizing Manual Campaigns...15 Conclusion

3 Ever Hear the Saying Traffic is King? We didn t either, until Amazon banned incentivized reviews tied to Amazon seller giveaways or discounts. These tactics artificially increased traffic and sell-through velocity on Amazon product listings, and are no longer allowed. Now there s a new king in town. Amazon s Sponsored Ad platform can drive significant traffic to your Amazon listings. At first glance, Amazon Sponsored Ads seems intimidating, but the traffic benefits to your Amazon product listings are worth the time investment. We re entering a pay-to-play Amazon environment you gotta pay to make money on Amazon, and that money is going back into Amazon s pocket. 3

4 One of Skubana s clients share this story of what Sponsored Ads can do for you: This Amazon seller generated $200,000 by spending $35,0000 meaning for every $1 of sales generated, Amazon is getting roughly 17 cents. That s a great deal, and will change depending on what category you sell in. Now let s investigate how to create an Amazon Sponsored Ad campaign that works, drives traffic and most importantly, is profitable. Even if you re already using Amazon PPC to drive traffic and sales, you can benefit from some these tips to increase relevance, find new keywords, and lower your ACOS. We re going to show you how this is done in this ultimate guide to creating a highperforming Amazon Sponsored Ad Campaign. 4

5 The Basics: Why Use Amazon Sponsored Product Ads? Amazon s sponsored product ad platform is a tremendously powerful tool for Amazon sellers that is surprisingly underutilized, even by large Amazon retailers. It s a tool that you can use to increase your traffic and sales with minimal investment while reaping other benefits that will add value to your entire campaign. Amazon also offers tracking metrics that you can use to keep your campaigns profitable or break even, depending on your goals. (Amazon s sponsored product blends almost seamlessly with regular products, and has a high chance of getting the customer s click.) 5

6 Unlike Google AdWords, Amazon Sponsored Products is simple to use. It s designed for the amateur rather than the professional marketer and focuses on making sales on Amazon. Amazon Sponsored Ads allow you to increase traffic to your product listing, which inevitably will increases sales and ultimately increase your Amazon Best Seller Rank. This raises visibility and organic sales. Sometimes, small sellers just getting started on Amazon buy a lot of inventory only to find that their niche has a large amount of competition that makes it difficult to rank. Luckily for larger sellers and sellers with more experience (and capital), Amazon PPC allows you to pay for that increased ranking, so you get more exposure, and can start driving traffic and sales right to your product pages. Ponder this: Only 30% of Amazon shoppers make it past the first page. That means 70% of Amazon shoppers only purchase products from the first page. So if you re in a crowded category on Amazon, you ll need to pay to get traction and exposure. For example, if you search Blenders on Amazon, you ll see that blenders have thousands of options in most categories. While that might seem intimidating, blenders are actually a low competition niche. If you were to choose something like a phone case, you d be looking at millions of competitors. Amazon sponsored ads allow you to take control and ensure that you get exposure, traffic, and therefore sales for your Amazon product listings. 6

7 Serious Benefits of Amazon Sponsored Product Ads Amazon s PPC platform allows you to set up automatic product ads, which allows you to quantify your exposure, optimize your listing by checking the click-through and sale rate by keyword, and even find new keywords. You don t pay for impressions. You only pay when someone clicks on the Sponsored ad, which allows you to judge conversion rates, quality of the ad, and the relevance of your product to the keyword. Importantly, you shouldn t use Amazon PPC unless you have well-written and highly detailed product pages that are already optimized for conversion. You should also plan to keep optimizing your listing as you get more traffic and more data so that you can increase your conversion rate and lower your costs. If you see Amazon customers searching for a product keyword that s getting a ton of impressions, make sure you include that in your title, features, description and the keyword back-end of Amazon Seller Central. 7

8 Using Amazon PPC Setting up an Amazon PPC campaign should involve split testing, experimentation, and multiple tools to find and compare results. Amazon offers manual and automatic options for sponsoring products. Each of these has advantages and disadvantages. Automatic Targeting Automatic campaigns are available for sellers with a Professional seller account ($39.99 per month). It allows you to set your maximum bid and then have Amazon show link to relevant keywords and phrases. This can be extremely valuable to see what people are searching and clicking on, testing keywords in your listing, and researching new keywords. Automatic targeting has Amazon pull keywords from your category, related listings, and the keywords in your product listing. However, sellers get much less control with this option, and can t dictate which keywords to bid on or the bid level. You can, however, add negative keywords to prevent Amazon from using a keyword that costs you money. 8

9 Manual Targeting Manual campaigns allow you to set up individual keywords that you can research and test yourself, and then run them with group or keyword level bids set for each keyword. This offers you more control but can be risky if you haven t put enough time into your keyword research. For best results, split your campaign up with exact phrase and broad match keywords, and then use that to see what people are actually searching for so that you can optimize over time. You can add up to 1,000 keywords per manual campaign. (Running both manual and automatic campaigns at once allows you to control spend on high-performing keywords while researching and collecting data with auto campaigns). TIPS Use both automatic and manual campaigns. Use automatic campaigns to handle keyword research and to experiment with new ideas. Start out with a low budget and then increase your daily spend as you optimize your campaign and increase your conversion rate. $5 a day is a good minimum after you have optimized everything. However, if you do have a decent ACOS for the keyword, a daily limit could limit your sales. Sales in seller central can be delayed by 48 hours or more. For this reason, edit the view by date to exclude the previous three days so you see an accurate view of sales. 9

10 Choosing Products Ideally, you should split campaigns up by product for simplicity. This can be a hassle if you have many products, but smaller e-commerce sellers can greatly benefit from it. If you do have a lot of similar products, a single ad group is fine, but it is more difficult to track. Your primary goal is to choose products that are highly relevant to your keywords. You should also split up campaigns by where you got keywords from. Create specific campaigns for high-performing keywords. Keyword Types You can choose up to three types of keywords when setting up your Amazon PPC. 10

11 How to Use Advertising Cost of Sale or ACOS In most cases, you should use all three keyword types so that you can continue to experiment and optimize your campaigns over time. You will likely make more sales with exact match, but broad and phrase allow you to research keywords to see what people are searching for. You can add more specific and relevant keywords to your exact match campaign over time. ACOS is the percent of sales spent on advertising. This number makes it easy to see whether your ads are profitable or not. How to calculate your ACOS Retail Price FBA Fees Total Cost of Goods (Including Shipping, Handling, Packaging, etc.) = Profit Per Unit. Example: Retail Price $22 FBA Fees $11 Cost of Goods $5 = Profit $6 In this case, your profit margin is 27%, which you can use to determine you cannot go over 27% ACOS without losing money on your product. You want to do better than break even, but your Amazon PPC campaign will earn you money in other ways. For that reason, you can aim to break even for the first few months while you build up your sales velocity and increase organic sales. 11

12 Amazon shows you ACOS at campaign, ad group, and keyword level, so you can calculate the total profitability of each. What s a good ACOS? That depends on your campaign, profit per item, and goals. Normal ACOS can range from 2% to over 50%, and can be profitable. However, you should calculate in your maximum budget so that you know when you re spending too much and need to reduce keywords. Conversion Rate Use your average conversion rate to calculate profitability per campaign. For example, if you re bidding $1 per click and pay an average of.80 cents, then at a 10% conversion rate, you would be spending an average of $8 per sale for a loss at $6 profit. You would have to either increase the conversion rate or decrease your bid to see a profit or to break even. In this case, you would have to bid a maximum of 60 cents per click or increase your conversion rate to 13.4% or higher to see a profit. Things won t always be quite so clear cut, because your conversion rate will change and the amount you pay per click might vary quite a bit. However, you can calculate averages and use them with a safety margin to ensure that you don t start losing money. TIP Track the value of your keyword research and your increase in organic sales. If you ve been running your PPC campaign for a month and your organic sales go up by 40%, you can actually afford to run your PPC at a slight loss to maintain that sales velocity and organic ranking. 12

13 Using the Search Term Report to Optimize Your Campaign and Your Amazon Listings The Search Term Report allows you to check to see what people are searching for when they find your ads. This is a powerful tool that you can use to refine and add to your own keywords. Download your search term report at least every 60 days, or you will lose the data. Import the search term report into Excel. Use Excel filters or scroll through to look at your data. Ignore anything with only 1-4 clicks, as this could skew your total results. Similarly, ignore anything with a click through rate lower than.5. Choose keywords that have high sales rates per click through and a low ACOS rate. Add these keywords to a manual campaign. This will allow you to control your bids and budget, and get more clicks. 13

14 Run your highest performing keywords through a keyword tool to get new keyword ideas. Go through your results and look for very low-performing keywords. Those that are consistently costing you money (High ACOS) or have a very low click through rate should be added to your negative keywords so that Amazon won t bid on them in your automatic campaigns. Don t worry about having the same keywords in multiple campaigns. Amazon won t bid your own campaigns against each other. Take the time to review your keywords, relevance, click through rate, and all other metrics. Update your product listing keywords based on high-performing keywords and remove any low-performing ones from the page. 14

15 Optimizing Manual Campaigns Manual campaigns are easy to optimize because you can simply reduce the bid or pause low-performing keywords. While you do want to wait at least three weeks before you remove a keyword, you can typically tell if the ACOS is too high for you, the conversion rate is very low, or the keyword is not performing in less than 90 days. Reducing the bid will reduce your impressions and clicks, but will also reduce the cost per sale. Pausing the keyword will only pause the keyword. A common myth says that Amazon will disassociate your product from the keyword if you pause it, but this isn t true. Review your manual campaign data at least once a month to ensure that your keywords are performing well, and more frequently when optimizing your campaign. Amazon sales update after three days, so choose a view date that doesn t include the previous three days to see accurate data. Manual Campaigns Suggested Bids You can change your bid as much as you like, but sometimes it s hard to decide where to start, or perhaps you re curious about what your competitors are doing. To help with this, Amazon has Suggested Bids next to every keyword you input. Once the keyword has had time to register (usually a day or so) a suggested bid will appear next to it. 15

16 This is the bid Amazon recommends if you want to win the big for the specific keyword. Usually, this will be slightly higher or equal to your competitor s bids. Click Apply to immediately adjust your bid to the suggested price. Using Competitors and Brand Names (If you were selling blenders, you couldn t use Ninja as a keyword, but you could use Kitchen System and Pulse as keywords, because buyers looking for those products will likely use those words However, you don t want to get too specific with product competition, if someone is looking up a specific product, they might only want that product)..amazon discourages using competitor brand names as a keyword, but that doesn t mean you can t use a competitor keyword analysis to add to your own keywords. Simply reviewing your competitor products will give you a good idea of which words and names they use, and what someone might type into a search bar when looking for them. For example, many products actually have misspellings of products as their name, and you can use these misspellings without raising any red flags for Amazon. You can also use tools like Yoshikoder to see how often specific words show up on their page to see what keywords they are using. 16

17 Keyword Research Tools Google Keyword Planner Bing Keyword Planner Moz Keyword Research Sonar Tool (SOLID) UberSuggest LSI Graph Keyword tool dominator 17

18 Conclusion Amazon PPC offers extreme value to e-commerce sellers because it allows you to generate leads, boost sales velocity, increase Amazon ranking, and collect data on one budget. By running multiple PPC campaigns using automatic and manual campaigns, checking your keywords and what people are clicking on, and refining and optimizing over time, you can continue to generate new Amazon sales and keywords to improve the quality of your PPC over time. Follow best practices and Sponsored Ads can be a big driving factor to your Amazon product listings, and more than compensate for the loss of Amazon incentivized reviews. Don t give up, as it takes consistent work to get your Sponsored Ad campaigns to perform. You can t stop for a single, as your ACOS can change and your competitors may crowd around your keywords. Amazon also makes it easy to refine by sharing what people are clicking on and making it easy to research individual niches. Using negative keywords also allows you to remove costly words from automatic campaigns. Roll up your sleeves, keep putting in the work, and you ll see your Amazon traffic, sales, and best-selling rank soar. 18