The Amazon PPC Ad Types: What They Offer and How To Manage Them

Creating a successful Amazon PPC campaign isn’t just a matter of spending money on some keywords and then hoping to build sales. The strategy, research, and structure of a campaign are what determines its success. And even if you’ve done some thorough preparation, not keeping an eye on how well it’s doing will be a recipe for failure. 

 Every business has a specific vision of what an effective PPC campaign is. It could increase organic rank, drive sales of a seasonal product, or be consistently profitable. However you define PPC success, knowing the full scope of what’s possible within each of Amazon’s advertising channels will help you devise the ideal campaign for your brand. The keywords you target, the spending thresholds you set, and the performance metrics you use are all crucial to building a strong campaign. 

 As you juggle these different tasks, Viral Launch’s PPC tool, Kinetic, can make managing your campaigns easier and help you achieve your Amazon advertising goals. The data it provides on your ads’ performance can ensure your PPC campaign is structured effectively, targeting the right keywords, and spending efficiently. 

 Kinetic also offers automated features that will help you save time by taking bidding adjustments off your to-do list. It doesn’t force predefined rules on your campaign automation or only provide limited data. Similar to Viral Launch’s other software tools, Kinetic gives you the customization, flexibility, and data to make your ideal Amazon PPC ad strategy a working reality.

Here we’ll cover the various Amazon advertising channels—Sponsored Products, Sponsored Brands, and Product Display ads—and how Kinetic can provide benefits to each kind of PPC campaign. 

Breaking Down the Amazon PPC Ads: Sponsored Products, Sponsored Brands & Product Display Ads

 

The goal of an Amazon ad is pretty simple: convince a consumer to purchase your product. Yet making that happen is both complicated and expensive, and Amazon provides sellers with three different advertising channels for increasing brand awareness and gaining sales opportunities. Whether you choose to use one or a combination of them, each one provides different avenues for reaching consumers and specific advantages.

Sponsored Products Ads 

The first thing you’ll likely see on a search results page is a Sponsored Products ad. They appear at the top of results, as well as alongside them and at the bottom of the page. They provide an excellent means of generating visibility and enticing people to check out your product. As the name implies, these are product-focused ads meant to increase sales. 

 

Sponsored Products ads feature your product’s photo, your title (or part of it), the average reviews, and your price. These components alone are enough to draw a consumer’s attention and give her enough information to know if the offering is worth pursuing. When it appears next to competitors with weaker reviews or higher prices, the ad can really stand out and steal some sales from those other brands. These ads primarily target consumers who are weighing different options and are ready to make a purchase. Brand awareness can be generated here as a bonus, but the primary objective is to drive sales. 

 

Where a Sponsored Products ad shows up relies on a variety of different factors. It isn’t just your keywords and your bids (although you still need to target the right keywords and offer a competitive bid). The impressions and clicks it earns also play a factor. The better your ad performs and the more sales your earn, the higher your ad placements will be.

 

Also, an increase in sales will also help boost your organic rank. Having greater visibility in organic search results will lead to receiving more impressions, views, and conversions. Our CEO Casey Gauss has often spoken about how sales and rank create a flywheel effect in which sales help increase organic rank, which helps boost sales, and the self-perpetuating pattern builds from there. 

Sponsored Brands Ads 

 

Being a recognizable brand means a great deal. Promoting your products is essential, but promoting your brand can help create a personal connection with consumers that paves the way to brand loyalty. 

 

While Sponsored Products ads will help with product promotion, Sponsored Brands advertisements will allow you to show the personality behind your brand. Previously known as Headline ads, these ads appear as a banner ad on a search results page (at the top, middle, or bottom). They include your logo, a headline, and three featured product ads, each of which link to their product pages. By clicking the ad, a consumer will be taken to your brand’s Sales page or a customized landing page that showcases your three products and some information about your business. 

 

Because of their size the information they convey, Sponsored Brands is an effective way to gain attention and establish your business as a market leader. This kind of presentation conveys the legitimacy of your brand and gives people a way of learning something about your brand. By telling a little about the story behind your business, you can motivate consumers to support your brand. These ads can also be used for seasonal campaigns. If your brand’s products go through sales spikes at certain times of year, running Sponsored Brands ads can start generating some attention to help ramp up your usual sales increases.

 

The target audience for these ads would be top-of-funnel consumers who are learning about the possible choices within a market. The goal is to plant a seed of awareness about your business and make a strong impression that can eventually lead to a sale when a consumer is ready to make a choice. 

Product Display Ads 

 

If you’re looking for some widespread exposure across a number of different placements, Product Display ads can make that happen. These ads appear not only on search results pages, but on product pages, the customer reviews page, and in Amazon’s follow-up emails to customers. So they cover a lot of ground and reach people at different stages of the sales process. 

 

Product Display ads are essentially a combination of Sponsored Products and Sponsored Brands ads. They’re used to promote a specific product, similar to Sponsored Products, but they’re similar in size and appearance to a Sponsored Brands ad. A Product Display ad will showcase one item, along with a headline, the product photo, your review count, and price. Similar to a Sponsored Products as, the aim is to gain some visibility and drive some sales. 

 

Unlike either of these ad types, Product Display ads don’t target keywords. Instead, they target products and consumer interests. When targeting products, you focus on competitors’ products or related products within your main category. Interests refer to the categories and subcategories a consumer has searched within. The more specific your target is, the better. Rather than just targeting “Pet Supplies” for a dog leash, you could specifically target the subcategory of “Standard dog leash” or “Retractable dog leash.” By focusing on one of these detailed subcategories, you’ll have a better chance at connecting with your ideal customers.

How Kinetic Can Help

 

Each of these ad choices offers effective ways of getting your products in front of consumers, but they each have various challenges, which Kinetic can help you solve. By providing you with a complete overview of all your PPC campaigns, you’ll be able to verify what’s working and discover what isn’t so you can build on your successes and make improvements where necessary. 

Keyword Targeting

Knowing the right keywords to target is vital to your ads’ visibility and performance. Otherwise, you’re wasting your budget on keywords you can’t compete for or that aren’t relevant to your product. Using Kinetic, you’ll be able to accomplish the following:

  • Find which keywords are performing the best for you and capitalize on their results. 
  • Discover new keyword opportunities that previously missed and expand your campaign’s visibility. 
  • Create automated tasks around your new targets. These customized keyword-related rules can raise or lower your bids based on your ACoS, orders, and clicks. The control is in your hands.

Controlling Spending

Once you have the right keywords targeted, you’ll need to ensure you’re spending efficiently. You might have an ad that’s getting some good exposure, but if it’s eating up your budget, you’ll be reducing your profit margin. Kinetic can help you avoid those problems in the following ways:

 

Monitoring Performance

One of the big PPC misconceptions today is that once a seller has an Amazon ad campaign underway, the hard work is over and all that’s left to do is watch the sales roll in. Unfortunately, it’s not that simple and this kind of approach will only lead to wasted spending and little to no success. Kinetic gives you the ability to view your campaigns at a broad overview perspective as well as at a deeper detailed level:

 

 
 
 
 
 
 Click here learn more about how Kinetic can energize your PPC campaigns and connect with your ideal consumers. Not interested in managing things yourself, let us do it for you with Kinetic Assist.

The Importance of Amazon Ad Placement Data and How to Benefit from It

Good Amazon PPC decisions can’t happen without good data. Any opportunity to gather valuable data about your ad campaign is an opportunity to grow your business. 

 

So if you’re struggling to build a profitable PPC campaign, analyzing the right data will help you develop some effective solutions. Or if you’re hitting your PPC goals, your data will be a crucial resource in keeping that success going. You may even find that your ads are missing some growth potential you weren’t aware of. 

 

Each ad placement—top of search, rest of search, or product pages—will deliver different amounts of traffic and could require different amounts of spending. The traffic you get on page 1 will be much different than on page 5. Understanding how your ad’s placement is paying off (literally) will help you know how well your campaigns are increasing your visibility. 

 

Whether you’re keeping a close eye on your ad placement or unsure of how to start, Viral Launch’s software tool Kinetic will give you the data you need to monitor your performance. It provides a simplified and agile means of managing your ad campaigns, allowing you to make improvements or adjustments quickly. Whatever your PPC goals, Kinetic will help you pinpoint the most effective placements for your ads and create sales-driving campaigns for your brand.

Why Amazon Ad Placement Data Matters 

When you’ve got a good ACoS, you might consider your PPC campaign a success and want to leave everything exactly as it is. Why fix what isn’t broken? All you need is some automation so you can set it and forget it.

 

The trouble is that what’s successful on Amazon now won’t deliver the same results a month, a week, or even a day from now. Taking a hands-off approach will inevitably lead to a loss in visibility and be a gift to your competitors. Monitoring, analyzing, and adjusting are all necessary tasks in a successful PPC campaign, and you’ll need to know which placements are giving you the best outcome and which keywords or ASINs are your best targets. 

Know Which Placement Leads to the Best Results 

After some effort, your ad is now finally appearing at the top of page one. You’ve taken a step up from the middle of search and expect to see a boost in visibility. As it turns out, you unexpectedly find that the middle of the page was better for your campaign, as it consumed less of your budget and led to a greater number of impressions. 

 

Your ideal ad placement will be dictated by your budget and PPC goals, as well as the data you collect. You’ll need to examine your ACoS and click-through rates, and determine which placement will deliver the best performance. An ad at the top of search will increase your product’s visibility, but the cost per click (CPC) will be more expensive. With lower placements, you’ll drive a lesser amount of traffic, but the clicks will be less expensive. Without knowing what each ad placement can deliver, you’ll be missing opportunities to connect with customers and narrow down your best placement spot.

Know the Keywords or ASINs That Deliver the Best Performance

Keywords aren’t just important to your products’ organic ranking. They’re also vital to getting your ads in front of your target audience. Your ad placement data can convey which search terms you’re competing the best for. You can then focus on those that will deliver the best return while pausing those that might not be very effective. 

 

Let’s say your ad is targeting three different search terms: 

 

  • Garlic press 

  • Garlic press stainless steel 

  • Garlic press and slicer in one 

 

For “garlic press,” your Sponsored Products as is showing up on the middle of page 5 and not getting many impressions. “Garlic press stainless steel” is giving you some visibility the middle of page 3, and “Garlic press and slicer in one” is the best of all on page 1. By knowing what’s getting the best performance, you can focus on maintaining that success and start creating plans to make improvements for campaigns that are struggling. 

 

In addition to ad placement data, other performance metrics will be crucial to growing the success of your campaigns, and Viral Launch’s Kinetic provides all of those metrics in an easily accessible format. This PPC software tool will allow you to gain insights into your campaigns to help you continue to meet your goals and pinpoint where any adjustments should be made. 

 

Kinetic: Simplified and Efficient PPC Campaign Management 

Your ad’s placement will tell you a lot about your campaign, but it’s up to you to unpack the data behind it. Our PPC tool, Kinetic, provides an efficient and in-depth way to evaluate your keywords, budget, structure and overall performance. By providing a full range of data no other tool provides, Kinetic will give you better control over your campaigns and strengthen their performance.

Sales, Spending & Placement Data

Knowing your best opportunities for growth should be an underlying goal for all your PPC campaigns. By telling you exactly where your ads are showing up, Kinetic can determine which placements are giving you the best performance. 

 

You can also learn whether product pages or search results are giving you the most visibility. If product pages are best, you can devise a strategy for targeting competitors’ products with a more expensive price than yours. With your ad running next to them, you could potentially steal sales from those brands. By using Kinetic in combination with Viral Launch’s Competitor Intelligence, you can research your competitors’ products and locate some untapped opportunities for growth. 

Kinetic also provides organic sales data, so you’ll be able to determine how your ads are helping boost your organic search rankings. The greater visibility your ads provide, the greater your sales will be, and an increase in sales will help improve your organic rank. Making improvements to your PPC campaigns will help increase your products’ visibility, and monitoring your ad placement data will be important to knowing where and how to make adjustments.

Manage and Maximize Your Bids and Budget

You can’t have a discussion about PPC management without talking about bids and budget. Keeping your spending as efficient as possible is an ongoing challenge, and Kinetic can help you tackle your budget challenges. 

 Kinetic’s customized automated rules will enable you to create thresholds for each campaign based around ACoS, clicks, orders, and ad rank. This customization isn’t limited to a few predefined functions. The flexibility it provides is unique to PPC software and puts all the control in your hands.

You can set your bids to increase or decrease based on specified conditions, such as if your ACoS is less than your breakeven ACoS and the click rate is larger than a certain amount. Or you can pause keywords that aren’t performing over a certain target. You can also add bid modifiers to target top or bottom of search and make adjustments to improve or maintain your PPC campaigns. 

 All of these automation features will help you reach your PPC goal, whether that’s a profitable campaign, a lower ACoS, increased organic rank, or all of the above. Kinetic gives you an endless amount of possibilities in the automation you can create to use your budget more efficiently and strengthen your ROI.

Monitor the Performance of Your Keywords

Targeting the right keywords is absolutely essential for your ad campaigns. Keyword research is an indispensable task and one that shouldn’t be thought of as something you only use at the beginning of a product launch. Making sure you’re targeting the right keywords for your products and ads should be an ongoing process. 

 The data Kinetic provides will tell you how well your ads’ keywords are performing and their profitability. You’ll be able to make decisions on which keywords should be paused, set as negatives, or broken out into their own campaigns. Any keywords driving a large amount of sales or consuming the majority of your budget are good candidates for having their own campaigns. By breaking them out, you can then increase your visibility and conversions, and Kinetic can help you manage those new campaigns. 

Kinetic also offers search term reports you can view, so you don’t have to rely completely on Seller Central. Unlike Seller Central, you can easily compare and flip between different date ranges within the tool, instead of having to download one report at a time. Whenever you need to compare your seasonal data to previous months or years, Kinetic is an ideal solution. The tool also enables you to more easily aggregate your campaign’s performance by search term, which is more complicated in Seller Central.

Improving and Refining Your Amazon PPC Campaigns 

Making the right decisions about your PPC ads depends on your ability to evaluate your keywords, budget, and performance. It’s vital to know how many impressions, views, or conversions your ad receives at different placements, whether top of search, rest of search, or product pages. By analyzing your spending data, click-through rates, and impressions, you can have a clear idea of how well your ads are performing.

 Whatever challenges you may be facing with your PPC campaigns, Kinetic will help you develop customized and effective solutions. In addition to ad placement data, the tool provides quality data on keywords, campaign performance, spending, and Sponsored ad rank. Designed to make your PPC management more efficient, it will help you find weaknesses, develop improvements, and put them in action.

The team here at Viral Launch is committed to providing Amazon sellers of all sizes with the resources for attaining long-term success. Our expertise has been built on tens of thousands of product launches, and Kinetic’s sophisticated but easy-to-use capabilities will help your brand achieve their PPC goals and simplify the challenges of advertising on Amazon.

 

 

Amazon Product Targeting: What It Is and How To Implement an Efficient Campaign Today

Amazon recently released new targeting options for Sponsored Product campaigns that will have a major impact in your business in 2019. The new Product Targeting Beta lets Amazon sellers choose specific products, categories, brands, or other product features to target placements for your Sponsored Ads, changing the way you manage your advertising campaigns. This long-anticipated targeting option can be implemented to help shoppers find your product when browsing detail pages and categories, or when searching products on Amazon.

When creating a manual advertising campaign, the new targeting selection can be found just below your bidding options in Seller Central. Look for it under the “Targeting” header and select the “Product targeting – BETA” bubble.

Why Should I Use Product Targeting?

Product Targeting allows a seller to target individual ASINs or Products for ad delivery instead of keywords.  Sellers can now be very specific and controlled with their ad placement by delivering only on the products they choose to target. This narrow targeting can be used to build efficient sales history early on in your advertising campaigns. When deciding how to place and deliver your ad, Amazon will look at its historical performance relative to the market. Having an early track record of efficient sales history will benefit your ad delivery, ad costs, and ad placement in the future.

Which Products Should I Target?

There are several factors to consider when determining which and how many products you should choose to target with this new feature. These critical selections are dependent on the competitive features of your product and the desired positioning and marketing strategy.

Historic High-Converting ASINs

If you have run auto campaigns in the past, download a search term report and sort through the ASINs your ads delivered for. Find any ASINs that have converted profitably in the past and analyze the listing. Determine whether you have a better offering by comparing price point, review count and rating, value offered, etc…

ASINs Where You Have a Better Offer

Another method of finding ASINs to target is by searching the main keywords for your product, analyzing the search results, and hand-picking products where you have a better offer. Look for higher priced products, listings with poor review ratings or listings with fewer reviews. Objectively, if you have a better offer, that ASIN is likely worth testing in a product targeting campaign. The goal is to target placements through which you can drive sales efficiently (both by volume and cost per conversion). Here are some criteria to consider when analyzing which ASINs to advertise on:

  • Price: Is the price of your product similar or better in comparison?
  • Review Count: How many reviews does your listing have compared to the market?
  • Value Offered: Is your offering similarly priced though offer a better value? Example: you sell a felt letter board that includes a bag to store the letters and advertise on another offering without the added value.
  • Content/Photos: Does the content in your listing and quality of your photos look more attractive than your competitor?

The objective is to find as many competing ASINs where customers are more likely to purchase your product. If you have a better price, more reviews, a better review rating or some combination of these, customers should want to buy your product over the ASINs you advertise on!

Also, consider the amount of traffic a listing is getting before adding it to an ASIN targeting campaign. You can use an Amazon product research tool to understand traffic relative to each ASIN in your campaign. Products that get more sales are almost certainly getting more sessions. If you are advertising on products that are getting more sales, your ads will likely deliver more frequently than on products that get fewer sales or are ranked lower in the organic search results.

Complementary Products: Products Frequently Bought Together or in Similar Markets

Another category of products to identify for product targeting are complementary products.  Complementary products are supplementary goods that are often bought together. These are products often shown in the frequently bought together section on product detail pages. The goal of targeting these products is to attract customers with a product they didn’t realize they needed. For example, targeting paint supplies if you sell painter’s tape, or targeting lawn care goods for your work gloves product. Hitting people already in the buying mindset with a complementary product can increase sales volume in a market your competitors aren’t prioritizing.

Example: Targeting a toothbrush with your dental floss or toothpaste product

Competitor Products

In markets where you want to conquest market share, target high-trafficked competitor products to take away sales that they would otherwise be receiving. This has a dual-benefit of driving sales volume and sales history for your product, as well as affecting your competitor’s sales numbers and efficiency. Price your product with a more competitively against a specific ASIN or high-ranking product and target their ASINs to drive sales velocity quickly.

Find Competing and Complementary Products with Listing Analyzer

Identifying which ASINs to leverage with Product Targeting can be a time-intensive manual process, but it doesn’t have to be. In one of our newest updates to Listing Analyzer, Viral Launch has released the Competing and Complementary Products Feature. Using the content of your listing and machine learning, our software will deliver a list of suggested products for you to capture in your Product Targeting campaigns. The competing and complementary products feature includes the ability to:

  • Discover complementary products frequently purchased together
  • Identify competitor products in your keyword markets
  • Sort and filter by products with high revenue and sales to maximize exposure

This new feature added to Listing Analyzer makes it quick and easy to get started with product targeting, saving you time by cutting down on manual research so you can make decisions quickly. To save even more time, utilize the filters feature to show only products higher priced than yours or ASINs with a lower star rating. This will instantly give you a list of ASINs that your product is likely to convert well for when advertising on! Try Listing Analyzer for free to see for yourself.

Defensive Placements

Along with capturing placements where you wish to increase your market share, it is equally important to defend the placements you already dominate. For sellers with multiple products and variations in their catalog, product targeting can be leveraged to target your own listings. By showing your own products on the detail pages of other products in your catalog, you can take up space on the “digital shelf” to suppress your competitors’ visibility. By defensively spending, you prevent other sellers from intruding on valuable retail space on your product listings. By targeting these placements with other SKUs in your catalog you may even be able to increase sales across those other products!

ASINS from Farming Campaigns

When starting your paid advertising campaigns, it is critical to frequently sort through search term reports, farm high performing search terms, and add them to your campaigns. When you go through these reports, you can see that your auto campaigns will oftentimes deliver for ASINs instead of search terms. An effective seller will continually target these ASINs that have converted and include them in their product targeting campaigns. These “farmed” ASINs from search term reports have the benefit of already being “proven” with a historical sales record of converting for your product. It is highly encouraged to include these ASINs in your product targeting to build sales volume with efficient placements.

It is important to also look at ASINs that have delivered for your campaigns and have not converted. Although no sales have come through these ASINs, they have received clicks.  Amazon has delivered your product for these ASINs, which means it is recorded as algorithmically relevant. Sellers should look at these ASINs and identify whether they have a better offer while also reviewing them for potential new markets for complementary products. Explore the products that show up in your search term results. Every offer you can beat is another opportunity for you to grow your market share.

Category Targeting

As well as targeting individual ASINs for your ad delivery, Amazon now allows you to target entire product categories and subcategories. These category targeting campaigns deliver for any product across the targeted category and within the customizable parameters you set.

Amazon gives you the ability to refine your category targets by specific brands, price range, and star ratings. With narrow refinements, you can reach a broader audience while staying within range of products you can compete against. The more narrow your refinements, the fewer product targets your ad will deliver.  

Category campaigns should be used in instances where you have a better offer than most of the market, or you can deliver for a wide number of products within your delivery refinements.  Category targeting is less efficient because of its broader delivery, but can be implemented to scale up your campaigns and expand delivery across more product targets easily. Again, these campaigns can be used as a method of “farming” new ASINs to target in your specific product targeting campaigns. Inversely, find ASINs that you deliver for frequently though don’t convert for. Category ads allow you to add negative ASIN targets to help mitigate inefficient ad spend.

Negative Product Targeting

Amazon also now allows you to add negative product targets in your product targeting campaigns. Select products that you don’t believe you can compete against and add them as negative targets to remove them from delivering in your ad campaigns. This will help you eliminate inefficient placements and improve ad efficiency.

Managing and Scaling Your Campaigns

As with every advertising campaign, it is important to monitor the data that comes through the listing. Eliminate products targets that spend and do not convert after spending past your profitability threshold. The goal of this strategy is to build sales quickly and efficiently. Treat ASIN targets similarly to keywords. Pause ASIN targets as they spend over your profitability threshold or those that don’t convert and allow the budget to flow through your most efficient targets.

When high-performing ASIN targets are identified, scale up your campaigns and grow your market share. Select the targets that are driving sales at a rate that spends a significant amount of your daily budget, make sure they are given the money they need to spend throughout the day. These campaigns should be profitable, so scaling the campaign should increase your daily sales volume at an efficient rate. This is where the real growth occurs. Keep increasing the budgets of your campaigns that perform the best for your business and drive the highest percentage of your sales volume. Your market share will grow and the results will speak for themselves.

Conclusion: Maximize Your Sales with Product Targeting

Product targeting provides some of the most narrow targeting options for Amazon advertisers. This new feature should be leveraged by almost every seller to build sales volume effectively and efficiently. The ability to select only the products you want to deliver on can grow your market share without sacrificing spend efficiency. Our Competing and Complementary Products feature in Listing Analyzer makes it fast and simple to get started with this new feature.  Integrate product targeting into your ad campaigns today and start growing the reach and maximizing performance for your Amazon business!

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The Importance of Ad Position in Your Amazon Sponsored Ads

What items are at the top of your Amazon to-do list? When it comes to maintaining your sales, you should be dedicating a significant amount of time to tracking and improving your Amazon Sponsored Ad campaign performance. Identifying potential issues and fixing them before your campaigns start to perform poorly can save lots of time and headache in the long-run.

Let’s dive into the most important metrics to monitor in your Sponsored Ads, and how you can add smart automation to increase your success rate on Amazon.

A Common Amazon Sponsored Ads Mistake

Constantly optimizing your ad campaigns is so important because Amazon’s algorithms are designed to reward products that perform well, and even a single day with low sales volume will negatively impact your sales velocity. As a result, both your organic rank and paid rank will suffer.  

As you’re managing Sponsored Ads campaigns, it is very important that you pay attention to every single ranking movement, ensuring that you know when your ad is performing well. Getting this right will not only result in a well-performing campaign, but it will also help your promoted listing gain organic positions. (If your goal is to push organic rankings via sponsored ads, make sure that your listing is optimized for your targeted keywords before starting the campaign.)

Many advertisers fail with Sponsored Ads because they don’t know how the platform works. They’ll throw marketing dollars into this advertising channel without any sort of plan in place. One of the causes of this behaviour is that Sponsored Ads is one of the hottest topics in the Amazon space and every Amazon “guru” out there is trying to monetize this trend by selling information that is often not backed by data. The result is hundreds of new sellers starting to advertise on Amazon only because they’ve been told to do so, and they’re afraid of missing out if they don’t join the trend. Classic FOMO.

Guess what? This behaviour will get you in big trouble.

The Ad Strategy that Can Change Everything

Amazon’s Sponsored Ads engine is run by a sophisticated algorithm. Understanding its mechanism is not easy, even if you have some previous experience running campaigns on Google Ads (formerly Google AdWords). There are so many moving parts that it takes just one of them performing poorly to jeopardize your whole campaign.

Many people make the mistake of thinking that building campaigns in Amazon’s Sponsored Ads is just the same as in Google Ads. Unfortunately, this is not the case. While Google Ads is designed to drive traffic from different channels and optimize based on the trackable goals that you specify (eg. lead, purchase, view of a key page, etc.), Amazon’s Sponsored Ads optimization algorithm is designed to favour ads that make Amazon more money.

This, of course, changes everything.

One of the things that I’ve learned over years of managing campaigns on Google Ads is that your campaign performance will only be as good as you are at managing it. For instance, the mistake that most people make with Sponsored Ads is to focus solely on ACoS which is not the best KPI (Key Performance Indicator).

For a campaign to be profitable, you need to first know your breakeven point. This is determined by your listing’s conversion rate, cost-per-click and, of course, the maximum cost that you are willing to pay to acquire a customer (Max CPA). Once you have these metrics, you need to calculate your maximum cost-per-click that you can afford to pay to be profitable.

You can use the following formula to calculate your maximum cost-per-click:

The table below will help you to calculate what your Max CPC should be based on the metrics mentioned above:

  • Sale Price = The price at which your product sells or is sold at after its price has been reduced.
  • CoGS = Cost of Good sold including Amazon fees and various manufacturing costs.
  • Max CPA = (Sale Price – CoGS = CPA) The maximum cost you can afford to pay to acquire a customer and break even.
  • Listing CR = Your current listing’s conversion rate (you can find this number in your Seller Central’s business reports)
  • Max CPC = The maximum cost you can afford to pay for a click and still make money.

This formula will change everything, as you will learn that, often, the keywords you’re currently targeting are not the best-performing. Consequently, you will be more profitable if you focus on those that you can afford to buy clicks for (based on your max CPC).

Once you have this step figured out, the next big metric to monitor is your ad position.

If you are familiar with Google Ads, you probably know that one of the most popular bidding strategies is the “bid to position.” In fact,Search Engine Land even wrote a script to automate this. Of course, having your ad show in position one is the goal for most advertisers, as this will not only increase the ad visibility but get you the highest CTR (ad copy plays a big role here)  which means more traffic. This rule is significantly more important with Amazon Sponsored Ads given that nearly 70% of Amazon.com shoppers place orders using a mobile device.

Keep in mind that higher position means, often, higher CPC so you have to focus on conversion rate optimization first (if you listing’s conversion rate is low) and ensure that you can afford to pay a higher CPC that allows you to compete for position #1.

Now that you know how important your ad position is, it is imperative that you build and structure your campaigns in a way that allows you to achieve this result while minimizing your ad spend.

Keep Track of Your Ad Position

After testing this theory with outstanding results for the past nine months, we decided to build a tool that allows Amazon advertisers to monitor their ad position and receive notifications alerting you when your ad is losing positions. Keyword Manager shows exactly where your product is ranking so that you can precisely measure the results of your efforts. You can even view historical data to see where your ads are at now compared to where they’ve been in the past.

Alongside your Sponsored Ad rank, Keyword Manager shows helpful metrics such as Amazon’s Choice Badge notifications, Amazon’s relevancy score, search volumes, suggested CPC bids, organic rank position, whether or not you’re indexed, and more. No other tool shows you these many keyword insights.

Try Keyword Manager out for yourself. Whether you’re implementing a new Sponsored Ads strategy with profitability in mind, or you’re monitoring your indexation and keyword rank, Keyword Manager equips you with the metrics you need to position your listing for success.

Track Your Ad Position