The Ultimate Amazon PPC Guide 2021

Want more Amazon Advertising Insights? Check out these posts:
Amazon Advertising: Everything you need to know
Tips: How to optimize ACoS

Amazon Advertising Update 2021

Amazon has continued to expand the Amazon Advertising platform at a remarkable pace in recent years. Amazon has given advertisers a whole toolbox full of new tools for performance optimization. So it's time to fill your head with fresh Amazon Advertising knowledge! 

Even though the shopping behaviors of people changed, for a while Amazon changed its acceptance criteria to its warehouses, Amazon Advertising has been a platform that kept developing into a powerful advertising channel. Since the number of users and advertisers increase, so the updates keep coming to meet the needs of millions of advertisers and provide them the best services to help leverage their sales. In our updated Ultimate Amazon PPC Guide 2021 we present you your reference book for Amazon Advertising in 2021 with the updates and “how-tos" for a better advertising experience.

To more revenue in 2021! Cheers! 

Comprehensive How-Tos for Sellers and Vendors 

Learn how to control product ads in Amazon with the right campaign structure, keyword setup, and selective keyword harvesting!

As a provider of a PPC solution for Amazon, we optimize the bids and campaigns of various sellers and vendors on a daily basis. This means that we are deeply rooted in performance optimization for Amazon PPC.

What is Amazon PPC?

Amazon offers various ad formats for advertising on the platform. Especially within the Amazon product search engine, the different campaign types follow the pay-per-click principle. Amazon PPC (Pay-per-Click) is an advertising format that is offered by Amazon which allows the advertisers to pay only when a user clicks on their ads. Hence with PPC ads, advertisers don't actually pay for being able to show the ad.

With Amazon PPC, advertisers are able to display the products more frequently to potential shoppers at key points on the search results page, increasing visibility of the products. Depending on the ad type, the ads can be displayed at prominent positions in the search results page, with varying degrees of visibility. People search for products already with the intention to buy on Amazon more than on other search engines, such as Google. Since the products are more often displayed to the users with the intention to buy, merchants can massively boost their sales and revenue massively with ads on Amazon.

Amazon Advertising Positions for ads and organic search results

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8 Reasons why Amazon PPC is important

8 strategies to increase your sales with Amazon Advertising

Amazon PPC allows Amazon sellers and vendors to sell more products faster on Amazon. Amazon PPC enables you:

1. to increase the visibility of products

Advertised products appear more often at a higher position than in the organic results, which only list non-sponsored products.

2. to boost sales of any type of product

Amazon PPC promotes sales of niche products, just as much as Bestsellers– at various click prices.

Amazon Advertising promotes sales of niche products

3. to control seasonal campaigns

Many products are available at a specific time of the year. With Amazon PPC you can promote them for a limited period of time and even react to longer-lasting seasonal conditions.

4. to promote new products

When new products are added to the product range, they have low sales figures. The chances of their placement on the first page of the organic search results are very low. With Amazon PPC it will appear sooner in the organic results.

5. to protect top positions for successful products

Every seller or vendor probably has a main product on Amazon, which lands on the first page in the organic results. The growing number of suppliers is making it increasingly difficult to succeed with these products. In this situation, Amazon PPC plays a supportive role.

6. to direct traffic to offers with few hits

When it comes to drawing attention to an offer or campaign at short notice, advertising in the form of Amazon PPC can bring a key advantage.

7. to promote sales

Sales work only if customers are made aware of the reduced prices. Use Amazon PPC to increase the visibility of discounts.

8. to improve organic rankings in search results

The conversion rate for your products will increase. Because frequently sold products appear at higher positions in search results, Amazon PPC can also help improve organic results.

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Who is Amazon PPC for?

Amazon PPC is available to anyone who wants to leverage their advertising activities and increase their sales through the bidding auction system (pay-per-click), which advertisers only pay when it’s clicked on their ads.

Amazon sellers and vendors

Vendors

Vendors differ from sellers in that they sell the goods directly to Amazon in bulk. Amazon sells them under the name of Amazon, while sellers are the independent third-parties and deliver the goods directly to the end customer. 

Vendors have no direct business relationship with the end customer: Sales and shipping are carried out by Amazon.

Vendors use the Advertising Console to manage their ads. Here you have the possibility to use the following ad types:

Amazon Advertising Console ad types

Example for an Amazon Vendor: ESN
ESN is listed as a vendor under the product name. Dispatched and sold by Amazon.

Sellers

Sellers also use Advertising Console to advertise their products on Amazon. They deliver products directly to the end customer. 

Sellers can have access to Sponsored Products without any prior enrollment to Brand Registry whereas they have to be enrolled in Amazon Brand Registry to be able to advertise in the Sponsored ads formats below: 

• Amazon Sponsored Products Ads
• Amazon Sponsored Brands Ads (as the brand owner only)
• Amazon Sponsored Brands Video Ads
• Amazon Sponsored Display Ads

Example for a third-party seller on Amazon: Fitmart 

Fitmart also offers ESN Designer Whey on Amazon as a third-party seller.

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NEW: Managing Multiple Accounts: Manager Account

Advertisers and agencies who are managing multiple accounts can now handle multiple advertising accounts under one dashboard in Amazon Advertising console.

Manager Account is available to sellers, vendors, and agencies. 

To start using a manager account, sign in Advertising Console. On the left side to the accounts, click on the manager account. Click on the “Create a Manager Account”, decide on the name of the account. After selecting the account type, either as an advertiser or as an agency, your manager account is set. 

You can view seller and vendor accounts as unified under one dashboard or also if you are managing different marketplaces, you can combine the same regions under a single regional manager account.

With the help of one dashboard to manage different accounts, you can easily see which accounts need immediate attention, you get notified about the payments and blocked accounts. 

For more detailed information, you can visit the blog post about Manager Accounts by Amazon. 

What are Amazon PPC Ad Types?

Sponsored Products

Sponsored Brands 

Sponsored Display Ads

There are 3 types of Amazon PPC ads:

Amazon PPC ad types: Sponsored Products, Sponsored Brands, Sponsored Display

Sponsored Products

Bid adjustments after placement

To reach top placements on the search results page or product detail page, sellers and vendors can boost their default bids by up to 900% by setting placement modifiers. Placement modifiers have replaced the previous modifier Bid+.

Sponsored Products are placed in the following positions:

1. Position: At the top of the search results page

2. Position:  At the bottom of the search results page

Amazon Sponsored Products positions on the Amazon search results page

3. Position: On the product detail page

3a: In the carousel under the description of the product

Amazon Sponsored Products: ad position on the product detail pages

3b: Above the customer feedback area

Amazon Sponsored Products: Ad positions on the product detail pages above the customer feedback area

To learn the eligible product categories in sponsored ads, please check out the acceptance policies by Amazon.

Sponsored Brands

Sponsored Brands ads are keyword and product-driven PPC ads. You can build brand awareness and increase the discovery of your brand with the prominent positions of Sponsored Brands:  in the header -at the very top- of the search results page, on the side below the filter panel and at the bottom of the page and recently on product pages.

Sponsored Brands Ads Positions

The advertising position in the headline is one of the best positions in the Amazon product search. The only requirement to be able to place Sponsored Brands ads as an Amazon seller or vendor is to be registered to the Amazon Brand Registry. 

Product Collection 

Until April 2020, the only available ad format was product collection. This ad format allows advertisers to select 3 or more main products from their brand, add a custom logo. When the customers click on the featured image, they are forwarded to Amazon store or to the product list page or to a custom URL. By clicking on the displayed products, the customers are directed to the product detail page of the chosen item.

Sponsored Brands ad formats: Product collection, store spotlight, video

Store Spotlight 

Store Spotlight enables you to drive traffic to your store pages in your Sponsored Brands ads. You select up to three store pages that you want to drive traffic to alongside the custom logo and an ad copy. If you have subcategories of your store, you can also feature up these subcategories in your ads. For example; if you are selling shoes in your store, you can create a subcategory of each different category such as high-heels, sandals, boots. You can showcase these three categories in your Sponsored Ads with the Store Spotlight format.

Sponsored Brands ad formats: store spotlight

Video

Sponsored Brands Video Ads allows advertisers to feature one product with an auto playing video. Video ads are keyword driven ads, and direct customers to the product detail page of the products showcased. 

Sponsored Brands ad formats: store spotlight

Video is played automatically in mute when 50% of it is on-screen. Customers can activate the sound. 

You don’t have to partner with an agency to create Sponsored Brands Video ads. You can easily create one by using the tools below:

Aside from their placement in prominent positions and possibilities of unique customer experiences,, these ads are distinguished by the fact that you can spice them up with creative ad texts. You can easily structure a creative ad copy step-by-step in the Creative part. 

For a neat featured ad, you should keep in mind that your photo or logo size should be 400x400 pixels and under 1 MB. For the ad copy, the maximum character number is 30 and it should be in line with your brand and catchy.

You can also add a custom image of your selection instead of displaying the brand logo. 

With the new update in 2020, from now on it’s not necessary to create a new campaign for the changes in your creative. You can easily edit them and publish again. 

Another possible way to create Sponsored Brands Ads is that you let Amazon choose the most relevant products from your landing page and show them in your ads, which means that the products you selected might be different from what it's shown in the ads. 

Tip: Don't write specific headline for products, try to keep the message general, so that the ad copy applies to every advertised product of yours.

Sponsored Brands ad creation custom image

Increase bids for top advertising positions

Sellers have several Sponsored Brands ad placements available. What is special about that is that you can adjust bids according to the ad position. In other words: if your ad is qualified for the top position in the header, you can increase the bid by e.g. +30%. If the advertisement is shown at the bottom of the page, the bid will be reduced by -30%.

You can increase and also decrease your bids manually. On the other hand, if you choose automated bidding by Amazon, Amazon will lower your bids. They will never be increased to reach the top position. This means that you need to start with a higher default bid to still be placed in the header. The adjustment of bids by placement is also possible for sponsored products.

Sponsored Display

Sponsored Display Ads are PPC ad format that allows you to target the users who already view your products but haven’t bought anything or the users who show interests in specific products or categories. Whether an ad is eligible to show for a specific search query or not is determined not by keywords, but by their relevance to the customer, or their context to similar products. 

Sponsored Display ads are available to professional sellers enrolled in Amazon Brand Registry, vendors and agencies. They are based on the CPC principle, which means that views and impressions are free. You are only charged if the customer clicks on your ad. That’s why you determine the bid costs and daily budget. 

Sponsored Display ads allow you to increase brand awareness and to reach the customer with a specific interest. When clicking on your ads, the users are directed to the product details page. 

There are two available targeting options for Sponsored Display ads: Audience and Product Targeting.
Views Remarketing allows you to target the custom audiences who already viewed your products details pages, product categories, brands and other product features. 

With product targeting, you choose individual products or product categories to target your ads. 

You can define a brand logo and a headline for the products that you want to advertise. 

Sponsored Display ads are placed on and off Amazon. This means that you can target the users on third-party websites and apps. On Amazon, your ads are placed on the right side of the product detail page below the Buy Box, below the product details and the search results page and customer review pages.

Amazon PPC Guide:Sponsored Brands Positions Below the Buy Box ENG

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How does Amazon PPC work? 

Amazon PPC allocates ad space via an auction system based on keywords and products. To advertise a product in the search results, a seller or vendor offers a certain amount for each keyword, e.g. 0.50€. This means the seller or vendor is willing to pay a maximum of € 0.50 for one click on their ad. 

In the auction, Amazon ranks the ads according to the bids of the sellers and vendors and assigns them in the descending order ad spaces. The retailer with the highest bid generally has a good chance of reaching the top position. 

In addition to the bid, other factors are also taken into account in the ad ranking. As an extremely customer-centered company, Amazon attaches great importance to dealer performance: how high is the return rate, how satisfied are the customers, can customers use the product page to get an appropriate picture of your offer, etc.? All these factors are comparable to the Quality Score of Google Ads, which is used directly in the calculation of the ad rank.

As in Google Ads, the allocation of advertisement ranks in Amazon is also based on a second price auction. In other words, the highest bidder actually pays only the amount bid by the runner-up.

Amazon PPC Guide: Second Price Auction

The advantage of this type of auction is that all bidders can expect the best results if their bid reflects what the advertisement placement is truly worth to them:

The winner has no disadvantage in bidding the maximum amount. They are aware of the upper limit and know that they will pay only the second-highest bid. If the second-placed winner would place a higher bid than its real bid to win the auction, they risk having to pay more than they intended. This would not work for them in the long run.

Therefore, this system offers an incentive to  estimate the true maximum bid.

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How does Amazon PPC work for Amazon Sponsored Products?

Amazon Sponsored Products is a pay-per-click ad format that works through a second price auction based on keyword bids. In order to place Sponsored Products ads, sellers and vendors have to win an auction for the available ad space.

Plus, sellers and vendors can only place Sponsored Products ads if their respective product is offered in the so-called Amazon Buy Box. The big advantage of the Buy Box criterion is that as a seller, you have a very good chance that customers will buy the product from you. The other way around: if dealers could advertise products without being in the Buy Box, it is very likely that the purchase would go to the dealer who is currently in the Buy Box. Your ad would increase their conversion rate, but probably not yours.

Since Sponsored Product ads are linked to the Amazon product inventory, they are not displayed for unavailable products.

Keyword Types

PPC campaigns are normally targeted to specific search queries by so-called keywords. Keywords are terms that match the search terms used by customers in their search queries. Your ad will only appear if your keywords and their search terms correspond to each other. By selecting the right keywords, you cherry-pick in which search queries your products are advertised – and in which they are not. Apart from keywords, it is also possible to target Sponsored Products ads to particular products, ASINS, and categories. Learn more about that in our chapter on Amazon PPC targeting. 

The different keyword match types allow you to target your ads to specific search terms:

Exact Match: The keyword has to be an exact match for the search term.
Phrase Match: The keyword should be included in the search phrase.
Broad Match: The keyword can be found in similar versions in the search query.

Negative Keywords
With negative keywords, you can make sure that your ads will not be shown for inappropriate search queries. For example, if you sell Designer Whey sports nutrition, you might want to exclude the generic search query "designer". The Search Term Report is an important source for terms that lead to click costs without increasing sales.

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What types of campaigns are there for Amazon Sponsored Products?

If you want to advertise Sponsored Products, you can choose between two types of campaigns:

Automatic Targeting and Manual Targeting

1. With auto campaigns, you leave the targeting of keywords and products to Amazon. Amazon automatically creates an implicit keyword list that is based on the product description. You save a lot of effort, but at the same time you lose the most important means of controlling the traffic on your ads.

Structure of an Amazon Sponsored Products campaign with automated targeting

2. Manual targeting allows you to research and cherry-pick keywords and product categories yourself and model the incoming search traffic using the different match types.. Read more: How can I optimize Amazon PPC Keywords? 

Structure of a manually optimized Sponsored Products campaign

Learn more about the advantages and disadvantages of automated and manual Sponsored Products campaigns in our blog post 👉 Set up your Amazon campaigns for success in 3 steps

Top position with Amazon Bid+
You might have heard of the previously widely used feature Amazon Bid+, that has since been discontinued and replaced by a similar, more elaborate feature to modify your bids: Bid modifiers by placement. With Amazon Bid+ ("Bid+") it was possible to boost your bids by 0-50% if a placement of your product in a top position seemed especially likely. With the introduction of bid modifiers by placement (see below), Bid+ was phased out.

Bid Modifier by Placement

With bid modifiers by placement, you can adjust your bids up, but not down. If your ad is a possible fit for one of the particularly advantageous positions, you can give it an additional boost. You can adjust current standard bidding (February 2019) up to +900%. If you normally offer 1€ for a keyword, it, thus, increases to 9€. A bid that is +900% higher pays off (if at all) only for a few products. Check precisely, if and how strong it makes sense for you to boost the bids of your top seller.

Please keep in mind: Bids can be a lot higher than avgCPC after adjustment, which means that your daily budget runs dry quicker than expected. If this is the case, you are free to adjust the settings in the "placements" tab of the campaign manager at any time.

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What is Targeting? How does it work with Amazon Sponsored Products?

Amazon Advertising - like any kind of search engine marketing - only works if the advertised products exactly match the search query of the potential buyer. By targeting your campaign, you determine which search queries you want your ads to match. Sounds simple, but in practice it's often a complex matter.

How precisely you can control the placement depends primarily on the type of targeting. For good reason, targeting is one of the most important aspects of campaign creation. The two Sponsored Products campaign types differ significantly in this respect:

Targeting with Auto Campaigns

The main characteristics of Automatic campaigns are their simplicity and easy setup. Amazon will take on the targeting for you. You can still roughly control your traffic with new targeting defaults: with "Close Match" and "Loose Match", you can set bids for similar search terms. With the targeting categories "Complements" and "Substitutes", you can specify how much you would like to spend per click on ad placements that are useful additions to your products or substitutes of your product:

Amazon PPC Guide Sponsored Products Enhanced Auto Targeting

Negative Product & Keyword Targeting for Auto Campaigns

To ensure that your ads are displayed to only relevant and right customers, and are shown under the right product category, you can set negative keyword targeting and negative product targeting to control your budget’s spending. You can exclude the search terms and product categories that lead to clicks but not generate any conversions.

Targeting with Manual Campaigns

The manual campaign type, on the other hand, is very well equipped in terms of targeting - here you have all the options: with keyword targeting, you can target exact, broad and phrase match types and or with negative keyword targeting you can exclude negative exact and negative phrase match types. So that you can align your ads to the search queries down to the last detail. If you maintain your keywords regularly, the relevance of your ads is guaranteed - and the conversion rate is correspondingly high. Without automated support, this can require a lot of hard work from you. For top sellers, however, we strongly recommend this method!

Category and Product Targeting

The targeting of your campaign becomes more precise through product targeting. Here you can limit the placement of your ads to certain product pages or categories:

• Individual Products /ASINs: Your ads are displayed if the selected product/ASIN is at the top of the organic search results.
  
  
• Categories and Subcategories: Your ads are displayed if the top organic search result falls into your target category.

• By brand,

• By star rating and/or,

• price

Sponsored Products refine manual product targeting

Negative Product Targeting

Negative product targeting is similar to negative keyword targeting: With negative targeting you exclude the placement of your manual Sponsored Products Ads whenever the selected product appears in the organic search results. Otherwise, your relevant ad will not be displayed. As a seller or vendor  you can change the settings in Amazon Advertising Console.

This will, for instance, prevent you from competing with very well-rated products if you observe a low conversion rate on your own ads.

Negative product targeting

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How can I start with Amazon PPC?

Step 1: Make the product detail page eye-catching
Before you start using Amazon PPC, you first need to optimize the product details page. When a potential buyer clicks on an ad, they are redirected to the product detail page. If this page is confusing, does not contain the expected information or even wrong product pictures, a high bounce rate is unavoidable. The advertising costs are quickly driven up by many clicks without any incoming conversions.

Step 2: Win the Buy Box

A requirement for advertising on Amazon is to win the Buy Box. If you are not in the Buy Box, you can still create campaigns. However, your ads will not be displayed until the condition is met. The way into the BuyBox leads through the best user experience, which includes factors like price, customer satisfaction and Prime availability. If you were not in the Buy Box with your product, it would be highly likely that your advertisements would only help the seller in the Buy Box to achieve better sales figures. However, the Buy Box criterion should benefit you!

Once you've taken the first steps, you're ready to start creating your campaign!

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How to create an Amazon Sponsored Products campaign as an Amazon Seller

LINK TIPP! Before you continue reading: In our elaborate how-to on the best campaign setup for Amazon PPC, we guide you through the process step by step and help you to create your optimal Amazon Sponsored Products campaign setup.

As a seller, log in to Amazon Advertising Console. In campaign manager you will find the tab "Ads", under that "Manage Campaign" > "Create Campaign".

Create a Sponsored Products campaign

1. First of all, you should decide on a meaningful campaign name that clearly describes the products you want to promote in the campaign. Depending on the desired campaign structure, choose the name by brand, product category or product type.

Campaign Portfolios

If you create more campaigns, you can bundle them in a portfolio and thus combine campaigns with similar ACoS goals. From now on, you can only adjust budgets at portfolio level - instead of for each campaign individually.

Amazon PPC portfolio structure

If you create your portfolio with ADFERENCE, you can easily set your ACoS goals at portfolio level for all campaigns in the portfolio, as well as your budget.

Bonus: Individual reports are created for portfolios, i.e. you can see the performance figures of all campaigns in the portfolio as one key figure.

2. Start and End Date: Set a start and end date if you set up your campaign for a limited period, such as Christmas, summer holiday season, etc.

Start and End date

3. Set an average daily budget: With the daily budget you determine how much you would like to spend on average for your campaign. Average means that the spending on a day can be higher or lower than your set budget. To keep you on average within your budget, Amazon keeps your daily budget within a calendar month:

Example: If your daily budget is 40€, you will never spend more than 40€ x 31 within a calendar month of 31 days.

Create a Sponsored Products campaign: set a daily budget

Can I choose any daily budget?

The minimum limit for Sponsored Products ads, Sponsored Brands ads, Sponsored Display ads is 1€. Be careful with low daily budgets: if you set it too low, you increase the risk that your ads can no longer be shown early in a day.

4. Next step is to decide between automatic and manual targeting:

Automatic and manual targeting for Amazon Sponsored Products

Automatic Targeting

With automatic targeting, Amazon takes care of keyword research by automatically creating an implicit keyword list based on the product descriptions. All products you select in the next step will be displayed via the same keyword list. Search queries irrelevant to the product group can be filtered out in part by adding negative keywords. In addition, you can place your own bids for 4 types of search queries. However, control over this type of ad is limited. 

Manual Targeting
On the other hand, in manual targeting, you can manage your campaign to the smallest detail using positive and negative keywords of different match types. To do this, you have to know which keywords are successful and frequently lead to sales. However, the high research effort is well worth in many cases: by targeting only relevant search queries, a significant increase in conversions can be expected compared to campaigns with automatic targeting.

To discover more advantages and disadvantages of the two targeting types, see our section on the two campaign types. 

Name ad groups according to your campaign structure

5. The following step is to create an ad group: Here, matching products are grouped together in a group with similar products. Then, keywords are assigned to them.

6. Add matching products from your product catalog.

7. Decide on a bidding strategy and determine a default bid: with dynamic or with fixed bidding. The latter is especially useful if you regularly keep an eye on your bids and adjust them according to keyword performance, or use a bid management like ADFERENCE, which does it for you.

For the dynamic adjustments you also have to specify a maxCPC bid. In addition, you allow Amazon to increase your bid by up to 100% for placements at the top of the first page of search results and by more than 50% for all other placements. If you place a bid of 1€, Amazon can increase it to 2€ if necessary.

Campaign bidding strategy

8. If you have decided on a campaign with auto-targeting, you can now optionally add negative keywords to exclude irrelevant search queries. If you do not have any idea what these could be, you can leave the field empty for now and later add negative keywords to your auto campaign based on the search term report.

If you choose manual targeting, you can now start targeting your campaign using keywords, or you can select product targeting to target similar products, categories or brands you want your ads to be shown for.

Product targeting will make your work a lot easier. Especially when you are not sure what the users are typing for a keyword, product targeting allows you to be displayed in the relevant product category.

Manual targeting options

9. Have you already added some keywords? Excellent! Now you can set the bids! With automatic campaigns, Amazon automatically places bids across all ad groups. If you decide to go with manual targeting, you can specify a separate bid for each keyword.

Keyword targeting options

10. You can select either Negative Exact or Negative Phrase as match types for negative keywords to exclude irrelevant search queries and thus save unnecessary click costs.

Negative Keyword targeting

That's it!! – You have created your first Amazon Sponsored Products campaign! Now you can lean back and wait for the first results or you can go through our entries about campaign optimization to make your first plans for optimization.

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How can I optimize Amazon PPC campaigns?

How to optimize Amazon Sponsored Products campaigns

If you would like to improve the performance of your campaigns, you have some key tools at hand:

1. Optimize product information
To successfully place PPC Ads on Amazon, an optimized product page is a must! Like in Google Ads, product information constitutes the foundation of your Sponsored Products campaign. Establish a solid foundation to minimize the bounce rate and attract conversions at every opportunity. Check out the article How can I start with Amazon PPC? If you have already optimized your product page and got your products into the BuyBox, you can think about the detailed campaign setup.

2. Product categories:
Organize your product inventory – based on Bestsellers, brands or categories. This will help you to keep an eye on your products and identify the right products for your Amazon PPC campaign.

Organize product inventory

3. Campaign structure
Create your campaign structure that focuses on the requirements of your business. Here you can differentiate whether you would like to advertise Bestsellers or niche products in your campaign, and whether you would prefer to optimize manually or automatically. You should ask yourself if a granular structure is the right one in your case. Creating a separate campaign for each product is particularly worthwhile for top sellers. Learn more in our HOW TO on creating the right campaign structures for Amazon PPC.

Amazon Advertising campaigns dilemma - effort vs. controllability

4. Keyword optimization
Keywords play an important role in the management of Amazon Sponsored Products. Their continuous optimization is an important component of the advertising strategy. The first step in this strategy revolves around automatic campaigns: In this type of campaign, Amazon controls the ads via its own keyword list, which is created on the basis of product descriptions. Fortunately, Amazon reveals important information about the success of these keywords in the keyword report - one of the Amazon advertising reports. Running automatic campaigns and using the keyword report for keyword research is the first step in keyword optimization.

Add keywords

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How can I structure Amazon PPC campaigns?

In our section on Amazon Sponsored Products Campaign Types, we have learned that automatic campaigns are created by Amazon based on their product description. What's more, they are structured automatically: all selected products are added to a specific ad group. However, you can place different bids at the ad group level for 4 types of search queries and add negative keywords. However, given the variety of products in a campaign, it is difficult to actually filter the incoming search traffic.

Manual campaigns, on the contrary, require a well-considered structure to be able to make full use of the settings we have at hand. To achieve a campaign with maximum granularity, a separate campaign with 3 ad groups should be created for each product. With 3 ad groups, you divide the keywords into Match Type – Exact Match, Phrase Match, and Broad Match. So you have full control over each of your products and you can control keywords when your ads are eligible to show.

Create a manual campaign with 3 product groups

In practice, however, in most cases a structure with 2 ad groups is enough: either Broad or Phrase Match and Exact Match.

Best Practice: Combine the gems of both campaign types

Amazon Advertising campaigns dilemma - effort vs. controllability

Campaigns generated by Amazon are good for getting started, but can hardly be optimized. This results in unnecessary costs. For many advertisers they cannot be a permanent solution. For long-term success, you need a campaign setup that best combines the two campaign types:

Using automatic campaigns for keyword research

The biggest advantage of auto-targeted campaigns is that Amazon automatically generates keywords and groups of ASINs by category. Not only does this save you the tedious keyword and product research for your automatic campaigns, but the report also tells you which keywords and products are really relevant and adds them to your manual campaign.

Auto and Manual campaign setup

Reading guide for the illustration:

1. Create an auto-targeted campaign
2. Establish an identical manual campaign with 2un ad groups – one ad group for each match type
3. Analyze the search term report. This includes queries, ASINs from the automatic campaign including success rates for the search queries.
4. Add successful keywords to the "Broad Match" ad group of your manual campaign. Later you can add the most successful keywords to the "Exact Match" ad group.
5. Add negative keywords: Irrelevant queries or search terms that collect many clicks but do not lead to any sales.
6. Close the circle: Add all keywords that are currently in your manual campaign to the automatic campaign as a negative keyword with "Exact Match".
7. Product targeting: Add categories or individual products to your manual campaign.
8. Detect product, ASINs or brands that are unrelated to your products and add them as negative products 

Little by little you're adding all the important keywords, ASINs and products to your manual campaign. Here you can adjust the CPC bids for the keywords, categories and products individually and make maximum use of them

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Which Amazon PPC strategy works best for me?

The effort of maintaining Amazon Advertising campaigns is directly proportional to precision

It is clear that with the options we currently (March 2019) have for Amazon Sponsored Products, products can only be precisely controlled with individual CPC bids, keywords and product targeting if they are in a separate campaign. This structure can be optimally controlled - but is being able to differentiate between all products by a hair's breadth really always worth the effort?

Costs vs. Accuracy

The short answer: when choosing the campaign setup, there is always a compromise to be made in manual optimization, between effort in maintenance and the accuracy of control. The following questions help to reduce the complexity of the setup on different levels:

• Which campaign type is right for my business? How much time and effort can I invest in optimization?

• How detailed should my campaign structure be? Do I require a specific campaign for each product, or do I have similar products that can be advertised together?

• How detailed should my keyword management be? Do I need three Match Types in all situations? Or is a subdivision of "Exact Match" and "Broad Match" enough?

• For which products do negative keywords play a pivotal role in success?

Especially with Bestsellers with high sales volumes, it is worthwhile to control smallest possible level to make the best possible use of their revenue potential and avoid unnecessary costs: Keywords with a high search volume bring a high click potential. If you have the wrong match type or they do not match your product, unnecessary costs are generated and as a result, ACoS increases.

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How can fully automated Amazon PPC campaigns help?

If you want to successfully manage Amazon PPC campaigns, you should consider a number of factors: Which campaign structure and prioritization fits my product inventory? Which keywords are suitable for which match type? And how high should the bid be? You have to determine the latter individually for each keyword, because their expected click rate, the probability of a purchase and the basket value differ from keyword to keyword - from product to product.

Costs of Collecting Data 

If you want to know which click rate or conversion rate is to be expected from a keyword, however, a reliable data foundation is necessary. As a rule, there is little or no data available for so many keywords, because they are rarely searched for despite a high conversion rate or because they are newly added keywords. They are in the so-called mid-tail or long-tail.

Head, mid and long-tail keywords

If you want to optimize your keywords based on rules, all you have to do is to wait for more data till you can make a statistically significant assessment about a keyword and then make a meaningful rule. As a best practice: it is better to start with heavily converting – often expensive – star keywords to quickly assess many data points.

Another option is an automated optimization based on artificial intelligence:

It requires no cost-intensive start phase. Machine learning algorithms scan all data in the account that goes back to 1 year and recognize the relationship between keywords. The performance data of similar keywords are statistically compared to each other. In this way, the database is immediately enriched. Afterwards, the bids for each keyword are adjusted fully automatically and intelligently.

The advantage: even if little data is available, you immediately receive a prediction for an optimum bid for each keyword and product – with no need to define the variables like future conversion rate, basket value, and uplift.

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How can I optimize Amazon PPC keywords?

Keyword optimization

1. Harvest keyword-data – from the ad reports in Amazon Advertising Console:

• Use the search term report to identify irrelevant search terms and to add them as negative keywords, so that you can block these keywords.

• Boost keywords that lead to sales frequently, by registering appropriate keywords and increasing their bids.

It is currently (March 2019) not possible to assign keywords to sold products/SKUs (“Stock Keeping Unit”). However, the keyword report includes the numbers of SKUs promoted with a keyword.

External keyword tools can provide valuable ideas for other keywords, but they are not based on search queries for your product. Nevertheless, they can be highly helpful to extend your keyword list as a secondary source. 

**NEW: Transform Search Terms into Keywords

Since November 2020, search terms are available not only in Search Term Report but also in Advertising Console. In campaign and ad group level, you can transform the search terms into keywords by deciding the match type and defining the bid.

2. Analyze the performance of each keyword

To assess how effective a keyword is, you can take a look at the following parameters:

Conversions: the number of orders per keyword and the number of the products sold
Clicks: the number of clicks per search terms or keyword

Weak Keywords: Identify weak keywords in the first step and consider adding them as negative keywords (WATCH OUT for long-tail keywords). Negative keywords allow you to actively control incoming search traffic. You can prevent to display your ads to irrelevant search terms – the efficiency of your ads will increase: unmatched queries will not cause any further costs, ad costs will decrease and the ROI will increase.
Cost-effective Keywords: Find keywords with low costs per sold products. These keywords are among the hidden treasures that the keyword report can bring to light.
Top-Performing Keywords: They are the sales stars of the list with a high conversion rate and are often your Bestsellers.

3. Add positive und negative keywords to the right match types

We recommend to add successful keywords to the identical, manual campaign and additionally start with a higher budget. If the keywords are already on the manual keyword list, increase the budget and add them as negative keywords in the auto campaign. With a higher starting budget, you give the keywords a greater chance to generate clicks quickly.

Please note that you should select the appropriate match types since you cannot change the match type later. A keyword, however, can receive several match types. Match types are also available for negative keywords.

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How can I improve my ACoS for Amazon PPC campaigns?

If you want to improve the performance of your Amazon PPC campaigns as a seller, ACoS (“Advertising Cost of Sale”) is the key figure. ACoS describes advertising costs based on revenue and is the main indicator for measuring the efficiency of campaigns on Amazon. ACoS helps you to monitor how much of your advertising budget is spent in relation to revenue and - if the ACoS goal of the advertising campaign has been correctly determined in advance - helps you to draw conclusions about its profitability.

It is analyzed at the campaign and ad group level and as well as at keyword level.

ACoS = 100* (Total Ad Spend ÷ Total Sales)

Example: Keyword "half-finger gloves"

Let's say a merchant achieves 15€ revenue with the keyword "half-finger gloves" at the advertising cost of 0,75€. Then, the ACoS is 0,75 ÷ 15 x 100 = 5%. Per sale, the keyword caused advertising costs of 0,75€. The retailer has invested 5% of the revenue in advertising.

ACoS = 0,75€ Ads Spend ÷ 15€ Sales x 100 = 5%

The higher is ACoS, the higher is the advertising expenses concerning revenue and the more expensively a product is advertised. The lower the ACoS, the lower the cost in relation to sales.

If ACoS is too high for a particular product, we can turn a few knobs to reduce it. However, for new products / SKUs in particular, a more tolerant measure should be applied regarding the advertising expenses. If a bigger budget is available at the beginning, the new product can collect more clicks faster, generate sales and rise in the ranking.

How do I determine when to optimize ACoS?

ACoS should always be below your product margin. For example, with 33% profit after Amazon charges, manufacturing and delivery costs and all the other costs deducted from revenue. If ACoS is lower than your profit, you will not make any losses.

Amazon PPC Guide: How to calculate the breakeven ACoS

Optimize ACoS

The main goal of advertising campaigns is usually to increase profits. First, define how high your profit should be for this product to meet your sales target. If you reduce this percentage from the product margin, you will receive your ACoS:

For example, you generate 33% profit before the deduction of advertising expenses while selling a product.

You want to keep at least 20% of it to reinvest. Then the remaining 13% is your maximum ACoS:


Amazon PPC Guide - breakeven ACoC - profit after ad spend

If your campaign's ACoS is higher than that, you'll lose revenue. In the long run, you will have to work on the campaign if you want to prevent the profits from other campaigns from having to make up for those losses.

2. Decrease bids of keywords with high ACoS
If keywords result in high costs but also do not generate the desired revenue, a reduction of maxCPCs can help to keep expenses under control.

3. Increase the bids for top-performing keywords
Boost in-demand keywords and products to maximize their potential. When you secure yourself a top rank with higher bids, your product is shown every time a potential buyer searches for it. This way, you make use of every opportunity for a sale.

4. Add negative keywords
Queries for irrelevant keywords can drive up the costs in a campaign. Exclude these keywords categorically.

5. Support through automated bid management for Amazon PPC
Adjusting bids appropriately to the ACoS aim is an important step towards achieving the target. If manually calculating the bids for every product or keyword target for the whole product range is not an option, automated bidding offers a chance. Guided by your ACoS targets, the statistical algorithms in the background include historical performance data of each keyword and product, expected basket values and conversion rates in the calculation of bids.

ACoS as vendor
For vendors, the ACoS values are less meaningful since sales of SKUs (Stock Keeping Units) of the same brand are also counted as sales values if the product was sold through another merchant. See below for more information:

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Which key figures can I use as a vendor for Amazon PPC instead of ACoS?

In Advertising Console, Amazon assigns products sales to sellers and vendors that have not necessarily been generated by themselves. When Amazon sells the products, these sales are also added to their sales figures. Thus, these metrics capture the halo effect of the ads:

Product sales of SKU in the Same Brand ( "Attributed Sales")

As the name of the key figure implies, the sales are allocated via the registered trademark. This means:

• Even if the customer buys a product of the same brand other than the one advertised in the ad after clicking on the vendor's ad, the purchase is considered a product sale for this vendor.
• The purchase only counts if the customer buys the advertised product from Amazon. Sales of your brand by third party sellers are not counted. This often happens if the product is chosen in a different product variant (colour, size, ...).
• Sales of another, registered brand are not assigned. For example, if the ad is placed under the brand "Philips" but the customer buys a vial of the brand "Philips Avent", the sale will not go to Philips.

Product sales for advertised SKU ("Attributed Sales Same SKU")

The key figure 'Product sales for advertised SKUs' summarises the sales of SKUs in the same campaign. So you only get product-specific sales figures if you create a separate campaign for each product.

The click is assigned to a specific campaign according to the last-click model: a sale is only assigned to the campaign that was last clicked on before the purchase.

Cost-per-Order (CPO): Another relevant metric for the campaign performance

Amazon CPO ("cost per order") is another key performance indicator in Amazon Advertising. It represents the advertising costs in relation to the sales generated. If you optimize your campaigns to CPO, you follow the performance strategy of generating as many orders as possible at the defined cost per conversion (in this case, the conversion represents the order).

You cannot view CPO directly in Amazon Advertising Console, but you can easily calculate it by yourself. For CPO, the total costs incurred are divided by the number of orders placed:

CPO = total costs for advertising ÷ number of orders

In the strict sense, this means that all click costs incurred for the advertisement in the given period are divided by the orders in the same period.

If you want more information about ACoS vs. CPO, you can read our blog post: Amazon Advertising Metrics – ACoS vs. CPO: Which one is the better KPI?

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Which keyword tools can I use for Amazon PPC?

To master this balancing act between expenses and accuracy more effectively, a variety of small tools offer support in manual keyword optimization. Keyword management is a central element in campaign optimization that requires a lot of maintenance. Therefore, we take a closer look at various keyword tools:

Keyword Tools

Your keyword lists have to be spot on, in order for your ads to appear in the most relevant contexts. Whether the right keywords were added or not is not only important for the success of the advertisement but also the success of products.

Search Term Report

Not a tool as such – but it should be mentioned here. It includes actual search queries, that were entered for your product and, therefore, provide a valuable primary source for powerful keywords.

The following tools can help you to go beyond the search term report and to identify top keywords for a comprehensive keyword list:

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