Fundamentals of Amazon Pay-per-Click (PPC)
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This is the first in our series of articles that will teach you everything you need to know about PPC and how to make it work for you.

Do you know what I’m tired of hearing? Every seller running Amazon FBA Private Label (PL) inquires how to create and optimize my Amazon Pay-per-click (PPC).

I always tell; it’s easy.

Shocked!

Let me teach you what the Amazon PPC is and how it works. Let’s start with the fundamentals of Amazon PPC before setting up your Amazon PPC campaign.

In this article, you will learn: 

  • What is Amazon PPC?
  • Amazon PPC is a strategy mere advertisement tool
  • Why is PPC important for Amazon sellers
  • There Are Three Basic Amazon PPC
  • Automatic Campaigns vs. Manual Campaigns
  • Who can access Amazon PPC feature?
  • How Amazon ranks PPC?

What is Amazon PPC?

Amazon Pay-Per-Click, aka Amazon PPC, is an advertisement feature, offers to the third-party sellers. Amazon PPC has a wide range of features for designing ad campaigns for the products. The good thing about Amazon PPC is it only charges the sellers for each time a potential customer clicks and views the ad. Amazon’s PPC key components are essential to understand:

 

 

Advertising Cost of Sales (ACoS):

ACoS defines as the percentage share of attributed sales spent on advertisement. The formula to calculate ACos is: total ad spends divided by attributed sales.

Let’s understand this with an example.

If a seller spent 5$ on the advertisement and got attributed sales of 25$, the ACoS would be 20% (5$/25$=0.20)

Learn more about 10 Useful Strategies To Lower Your Amazon Advertising Cost Of Sale (Acos)

Attributed Sales: 

Attributed sales denote the total product sales generated within one week of clicks on your ads.

Listen: Sales data requires up to 48 hours, updating the system. It may delay uploading data on the “today” date range. You can view the individual sales for products advertised in the PPC.

Impressions: 

It merely defines as the number of times your ads display.

Clicks:

It refers to the number of times the customers clicked your ads. Keeping in mind that once the impression is identified, Amazon’s system takes up to three days to remove invalid clicks from your report sheets.

 

 

 

Amazon PPC is a strategy mere advertisement tool. 

Amazon PPC is to stay for a long time instead of short-lived. You need to design it strategically, monitor daily or twice a week, analyze the sale trends, identify keywords that generate sales, and frequently switch your strategies to pave the way for organic ranking.

That’s right!

It will not be going to happen in a week or ten days or even a month. You have to be patient to evolve the process of PPC and systematically optimize it.

 

Why is PPC important for Amazon sellers?

Amazon PPC Ads are considered an easy-to-go legitimate method to get sales and turns your listing towards organic sales. Amazon has listed millions of products. Amazon PPC makes your list visible in the ocean of products.

Though organic ranking — once your product appears in search results naturally, is of paramount importance, but Amazon PPC will help you increase your sales by displaying your products at the right place and targeting potential buyers of your product.

Notice it: Effective Amazon PPC management is the only way to increase your product’s discoverability and rank organically. Learn more about Optimize Your Amazon Product Listing: A Practical Guide

 

Who can use Amazon PPC ads?

Amazon’s Advertising Console allows Amazon vendors (1P) to access sponsored products, Sponsored Brands, and Product Display Ads. Amazon sellers (3P) have to have a professional selling plan to use Sponsored products, whereas sellers with Amazon Brand Registry are eligible to use Sponsored Brands feature.

 

Three types of Amazon PPC Ads:

Sponsored Brand Ads (formerly known as Headline Search Ads):

Sponsored Brand Ads are targeted by keywords and functions on the cost-per-click mechanism. It shows your product at the top of the customer search page. It is more likely to get clicks.

Here is an example of a headline search Ad on desktop:

 

 

Amazon Sponsored Products Ads:

Amazon Sponsored Ads are the most popular type of Ads. It promotes individual listings. It appears on the top, to the right, at the bottom, and even on the product detail page. It uses keywords to target specific products and display alongside other products on the search result pages. See the example below:

 

Amazon Product Display Ads:

Unlike above two Ads, Amazon Product Display Ad only accessible for registered vendor with Amazon. These are also pay-per-click ads that show on product detail page.  Amazon Product display Ads aims at targeting shoppers who have already visited their page. Through it, Amazon focuses customers on its affiliate sites. To avail of this feature, the seller must have a registered brand.   See the example below:

 

 

Automatic Campaigns vs. Manual Campaigns

Automatic as well as manual campaigns, both are set up in the campaign manager in the seller central.

Automatic Campaigns:  

Automatic campaigns reduce the input of the seller. It only requires setting up budget limits by the seller, and rest will be taken care of by the Amazon. Amazon will track the relevant keywords that match your product category, relevant products, and keywords placed in your product’s descriptions.

Manual Campaigns: 

Manual campaigns give sellers more independence to handpick keyword that they want to bid. The seller can choose phrase match, broad match, or exact keywords while setting up PPC. It involves wise decisions to select appropriate words and adjust your spending accordingly.

 

How Amazon Ranks Ads?

Amazon’s ranking mec3hanism revolves around many factors to influence the ranking. You can find two commonalities in the whole mechanism i) relevance and ii) Performance.

More specifically, factors to be considered for ranking divided into two categories:

 

PERFORMANCE METRICS:

Click-Through Rate (CTR) history:

Formula:

CTR= Total number of clicks on your ad / total number of impressions.

Conversion Rate

Conversion rate = number of sales (total order items) / number of times people visited your listing (including return visitors)

Amazon Algorithm analyzes how many impressions converted into click on those particular ads.

Overall Sales:

It denotes the total number of sales a listing has generated at the specified time.

 

RELEVANCE METRICS:

Product title:

Amazon’s A9 algorithm relies on product titles to determine relevance. Your product title must comply with the Amazon title requirements to get your product indexed and rank at appropriate spots.

Description:

The product description states what your product is and why it’s worth buying. This portion aims at compelling buyers by providing enough information to make a purchase. If the product description relates to the product title and images, Amazon gets it indexed and shows on relevant searches that increase the chances of getting sales.

Search Terms:

Search terms play a vital role in determining the relevance of your product. Amazon’s A9 determines your product’s relevance with a specified category, and with specific keywords, buyers are searching.

Seller Name:

Seller’s name is essentially your brand on the Amazon marketplace. It will be associated with your products. Indexing in Amazon’s A9 will show your products whenever a buyer searches your brand.

Wrap up:

Congratulations! You have learned the fundamentals of Amazon PPC.

Bear with me, because, now I’m going to show you how to calculate your budget for your campaign.

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