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Amazon Advertising: Introduction to Amazon PPC

23 Feb 2022

Amazon Advertising: how to build an Amazon PPC campaign

Successfully taking on the duopoly of Google and Facebook, Amazon has risen to become one of the behemoths of digital advertising in recent years. Not only is it the third-largest digital advertising company in the US, but Amazon PPC boasts an inordinately high average conversion rate (ranging from about 10-15%) compared with an industry average of less than 5%. As such, Amazon is becoming an increasingly ‘pay-to-play’ platform.

However, if you’re considering advertising on Amazon, research tells us that 42% of shoppers never scroll past the first page of search results, and 76% of them use the search bar to find an item, so it is critical to be part of the search results (and as near to the top as possible).

As building ad strategies on Amazon gains momentum, let’s explore how Amazon PPC works, and how you can use it to power your ad campaigns.

What is Amazon PPC?

Amazon PPC enables sellers to run ad campaigns which achieve a high visibility for their products on Amazon. Each time a shopper clicks on an ad, Amazon collects a fee from the seller – hence it’s ‘pay-per-click’.

There are three different types of Amazon PPC ads:

Sponsored Products. These display an individual product alongside related goods at both the top and bottom of search results, as well as on product details pages. Sponsored product ads can target either keywords or ASINs (Amazon Standard Identification Numbers).

Sponsored Brands. These display a banner at the top of search results showing a brand logo, custom headline, and up to three products. If a shopper clicks on a product, they’ll be taken to the product details page. But if they click on the brand, they’ll be taken to the brand’s Amazon Stores page, or a custom landing page.

Sponsored Display. These ads show a promoted product both below the Add to cart button on Amazon, and on external websites. They are particularly useful in retargeting to users with potential purchase intent.

Over the last decade, Amazon PPC has grown into a sophisticated advertising channel worth a reported $31B in 2021. And as visibility on Amazon has become increasingly important to sales, the number of advertisers has grown substantially. If you plan and optimise your campaign well, it can provide a significant boost – both in terms of sales, and the organic ranking of your products on Amazon.

How does the auction process work?

Amazon PPC has a fairly straightforward auction process. Each advertiser submits a maximum amount they’re willing to bid for an ad placement. The highest bidder then wins the top ad position, but only pays $0.01 more than the second-highest bid, rather than their maximum amount.

Sellers can set their daily budget for ads, with greater budgets naturally leading to a higher probability of their ads being displayed. Therefore, the CPC (cost-per-click) of a keyword or ASIN depends on the highest-value bid.

How to set up a campaign

Thankfully, setting up a basic Amazon PPC ad campaign is also quite straightforward. Simply follow these steps:

* Sign in to your Amazon Seller Central or Amazon Vendor Central account and go to your homepage. Hover over the Advertising tab at the top and select Campaign Manager. Alternatively, access the advertising portal via https://advertising.amazon.com/en-gb.

* On the Campaign Manager page, you’ll be prompted to set up your campaign budget and duration. The end date is optional, so you can choose to have a campaign run indefinitely. Within each campaign, you can create multiple ad groups which each use different keywords or ASINs. If you choose Automatic targeting for a product, the platform will automatically generate a list of keywords for it later on. This is useful for gathering initial data, but Manual Targeting gives you control over exactly which keywords to cover. Once you’ve finished, select Continue to next step.

* Create a name for each ad group.

* Select which of your products you’d like to advertise. You can advertise multiple products via one campaign but an advanced tactic would be to create multiple campaigns for a specific collection of products to enhance targeting and performance. 

* Set your default bid (the maximum you’re willing to spend) for each keyword. Be aware that its maximum clicks per day will depend on its default bid and the campaign’s daily budget.

* If you selected Manual Targeting, this is when you’ll be prompted to select which keywords will be bid on during the campaign. At first, you’ll need to experiment with these, but Amazon will provide some suggestions to help you. 

* Select Save and Finish to return to the Campaign Manager page, where you should see a message saying “Success!” It can take about an hour for your ads to start appearing on Amazon.

It’s also important to remember that ads with relevant content vs standard product ads achieve a 23%+ lift in purchase rates, so make sure your ad creative is as relevant as possible to your audience.

While it’s fairly easy to get up and running with Amazon PPC, there is something of a paradox here: to create an effective Amazon PPC campaign, you need actionable data. But to obtain that data, you need to run a campaign. Therefore, you may want to expedite your campaign strategy by tapping into expertise (either an Amazon advertising agency, or even better, a fully integrated ecommerce solution) to gain an understanding of Amazon in the context of your other sales channels.

Acorn Intelligence offers data-driven strategies for your brand. Our Ignite platform is purpose-built to include Amazon within an all-in-one solution for deeper, more valuable insights. So, if you’re looking to supercharge your Amazon ad campaign, sign up for a demo today.

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