Advertising optimization

Once you finish up with setting up shop on Amazon, then the next step is getting the word out. This can prove difficult if you’ve never tried advertising online before. 

If you’re not sure where to start with your Amazon advertising campaign, you might want to consider running PPC ads as an interesting option. However, the process takes time and involves a lot of effort for it to be successful. Sellers might find that managing ad campaigns aren’t as simple as it seems.

In this article, we’ll talk about some of the tips and best practices that will help you feel confident enough about building a sponsored PPC products campaign on Amazon.

The major benefit of Amazon Advertising

Advertising on Amazon has the added benefit of promoting your products by targeting active shoppers. In other words, it works best for those sellers who are actually listing their products on the platform because they can make the most of in-platform advertising. Since customers can instantly access the listing from the site itself, where the ads are also running. It makes for a smooth transition from lead to potential buyer. This is also why Amazon ads generally offer a higher return on investment. 

Speaking in general terms, Amazon ads appear at the top of the search with a sponsored or ad tag displayed beneath them. 

Types of Ads on Amazon

There are basically three common types of ads that are related to Amazon:

Sponsored Products, Amazon Headline Search and Product ads. The last one is also known as a Product display ad. 

Now let’s say you don’t sell your own brand. You’re more of a retail arbiter, also known as a third-party seller. In that case, your best bet would be to go with sponsored product ads. It is one of the most effective formats.

Amazon Sponsored Product Ads

Some sellers bid for high-performing keywords. This is so that every time a user searches for a product using that term, their ads appear at the top of the results. Every time a user clicks on the ad, a fixed amount is charged per click. 

These ads aren’t exclusive to search results alone. They also appear on the respective product pages. They are generally positioned on the side or at the bottom of the page. Sometimes these are for products that are bought together with the item you’re looking for. Eg: hair brush ads appearing at the bottom of a product listing for hair care shampoo. 

How do Sponsored Ads Work?

Let’s break down how sponsored product ads work:

They are basically ads that promote your individual listing to site visitors while they are browsing for products they’re interested in. Sponsored product ads appear based on keywords. They are displayed when the shopper searches for a product using a keyword that matches your product listing. Payment is on a per click basis. In other words, you only need to pay if the shopper clicks on the ad. But remember, this isn’t an assurance that the lead will buy the product. You can also decide how much of your ad budget you want to allocate to such ads and set a limit. 

How to get started?

Here’s how it works:

Visit Seller Central> Advertising >Create a Campaign. This is where you can set a budget limit for daily expenses. 

Most sellers set it at a minimum of $10. Your ads stop showing if the budget limit is reached within the day. 

There is an automatic targeting option that allows you to let Amazon AI match search keywords that are relevant to your ads. This is entirely based on the product details you have provided in your listing. 

It’s a good idea to check Advertising Reports every week to see which search terms are gaining the most number of ad clicks. This way you can zone in on those terms. You can also then customize your campaign to manually target only those specific search terms that perform really well. The keywords should be varied and cover enough categories. 

An advantage of running manual campaigns is the control you have over keywords. You get to choose which ones are best suited for your product and also relevant to the search terms you’re targeting. 

Campaign Manager Suggestions

Aside from that, the Amazon PPC Campaign Manager is also pretty good at suggesting keywords based on similar products or sales data. 

A good way to approach Amazon ad optimization is to review your campaigns weekly. You should also try to run both automatic and manual campaigns simultaneously. 

Why do you need optimized PPC ads?

It is a valid question. This has more to do with profit margins and ad budgets. If you’re targeting a specific market and are trying to get them to click on your ads, then you might consider a pay-per-click ad format. However, there’s always an expectation with such a campaign. And if your projections aren’t met even after you spend a lot of money on them, then your profit margins could suffer. The whole point of running an ad campaign is to get the word out and get new leads.

PPC Optimization

Optimizing your PPC ads can solve a lot of those problems for you. However, a lot of it still boils down to how much demand there is for your product. Another factor is the market’s competitiveness. The following are some of the general guidelines that can help you make the most of it:

Setting Goals

It is good to set a few specific goals that help you outline what you seek to accomplish with the ad campaigns. You don’t always have to meet or cross the target you set, but it’s important to work with something achievable in mind. So figure out what it is for you: Driving sales or attracting more reviews? Establishing your brand presence or increasing visibility?

Choosing Products to Advertise

Open Seller Central and access Reports > Business Reports> By ASIN>Detail Page Sales and Traffic by Child Item. There is an option here that allows you to find out which of your products have the highest potential of winning the Buy Box. Once you have this analytical data, that’s all you really need to focus on.

Optimizing the listing first

Make sure your product listing pages have accurate, keyword-based titles, high quality images and relevant product descriptions. We’ve discussed these in the previous lessons. 

Detailed Planning

Simply picking a spot and advertising on Amazon will only end up draining your ad budget. For fast and growing results, you need to optimize your approach. 

It all starts with detailed organizing. Pick the top most products in your catalogue that you have high hopes for. Analyze the sales data and other performance indicators and find out which ones are the best. Another way you could do this is by sorting products based on category. So you could choose the best possible item for each category you’re dealing in. The key is to have some criteria to organize your products. The next step is creating ad campaigns for them. 

Don’t undermine the importance of search engine optimization. Make sure that the keywords you use to run your campaigns match the ones you use in your product listing. This strengthens your chances of raising the algorithm. 

Keyword Bidding

Bidding for keywords is a tight rope walk. You shouldn’t exhaust your budget for mediocre keywords. But you shouldn’t bid too little that you walk away without any significant keywords to use. 

Instead of bidding based on what’s most popular, do a thorough analysis of your performance data. Find organic keywords that you might be overlooking. These might not be as in demand as you think. Remember, every seller is unique. So there’s a high chance you can get the keywords you actually need at just the right price. 

Tracking Performance

Once you start running ad campaigns, you need to stay updated on them. Monitor how things are progressing from time to time. Set a certain period each day to take a look at the results and spot changes or trends. The sooner you find out which keywords are irrelevant, the faster you can omit them from your campaign and save up on your investment. 

Monitoring ACOS

ACOS (Ad Cost Over Sales) is a great metric for evaluating how much your ad spend is worth each keyword. Separate keywords with high ACOS from those with low ACOS. 

If the ACOS ratio for a keyword is too low, you might be better off without it. Another point to note is that you need keywords that complement and complete each other. Not keywords that are competing against each other. You don’t need ten different variations of the same keyword when one or two would suffice. 

Renewing Keywords When the Need Arises

It’s always a good idea to try and refresh your keywords. Trends are always changing, day by day.  Ad optimization is not solely about converting leads into customers. It’s also about building a brand presence and enhancing your visibility on the platform. 

If a product isn’t performing well in sales despite a high ad spend, try something else. There’s a likelihood that there isn’t much of a market demand for the item you’ve chosen. This isn’t something repeated advertising can fix. So it’s better not to waste your ad budget on a sinking ship. 

Optimizing your ads requires you to be involved. You can’t be passive about it. Consistently check your performance and intervene whenever necessary. 

Leveraging low cost keywords

Find Keywords with low ad cost and leverage them by dedicating a new campaign entirely to these search terms. 

Sorting Campaigns By Priority

You could try dividing your campaigns as one for  high performing products and another for low performing ones. This way you won’t miss out on a sudden onset of demand and you also won’t run out of business on any product completely. 

Broader to Specific, General To Niche

When you start out, let your initial ad campaign match broader search keywords. You can zone in on more profitable search queries with experience later on as your business grows. 

Long-tail Keywords and Short-tail Keywords

Long tail keywords can be your best friend in the whole advertising game. Why? Because they’re very specific. This means it helps you exclude a lot of the competition and makes sure you get just the right customer you’re looking for. Unlike short tail keywords where the customers have a broader search interest, long tail keywords get right to the point. 

Added Benefits

The good thing about sponsored brand ads is that even if you don’t achieve your target leads, you still maintain a strong brand presence. In other words, it helps you build brand recognition and get customers familiar with the product you’re selling.

Profitability: A Key Metric

Sometimes a certain product might perform well for keywords but the profit margins might be low. It helps to know which of your products have a better profitability rate so that you don’t end up wasting your ad budget on a high-performing product that only offers meagre returns.

Kick-starting a Flywheel Effect

Like we mentioned earlier, paid advertising isn’t just about conversion, although that is the primary goal here. We also aim to get enough media attention in the form of reviews, page views, visits to the listing, sessions and more. This all contributes to your product ranking on Amazon. So it isn’t just about the sales but also what precedes it and following up on a done deal as well. 

Let’s elaborate on that:

When you implement paid ads on any relevant search result, buyers click on it and view the listing. Now all that traffic you get from clicks plays the important role of giving your product listing a boost in the algorithm’s ranking. The more traffic your product gets for a particular search term, the more synonymous it becomes with that search keyword. 

Eventually, your product can become a top contender for the search term, all by means of paid advertising. More traffic and higher ranking naturally makes your product also eligible for Amazon’s choice badge. This is a much coveted label that offers huge benefits for sellers. It exudes trust, reliability and makes your product a great pick for everyday shoppers. This in turn drives more traffic to your listing and keeps the cycle going.

Factors you need to consider:

However, orchestrating a flywheel effect for your product is no easy task. You need to constantly monitor your ad performance, your revenue, gross profit and total advertising cost of sale. This will give you a holistic overview of how well your ads are affecting real change and growth.

Significance of Negative Keywords

Finding negative keywords doesn’t have to be all intuitive though. You can also look for solid data to back your decisions. For instance, the Customer Search Term Report on Amazon can help you detect which keywords have no corresponding sales. Once you identify them, you can single them out and add them to your list of negative keywords.

Negative keywords help you prevent your ads from matching for repetitive search terms. These are basically keywords that are just similar variations of a different product that you don’t want to advertise for. 

ACOS Threshold

Ad cost of sale is basically a comparison between your ad spend and the revenue you’ve gained. We simply factor in how much of your ad budget must have gone into each sale and allot it as a share. So the lesser it costs you in ad spend to make a sale, the better it is for your business. 

Whenever you start a campaign on Amazon, you need to have a goal in mind. This is basically how far you’re willing to spend investing in your advertising. It tells you how much you’re able to afford before your business is no longer running on a profit and indicates when to stop or halt a campaign.

Setting ACOS limits

The best way to allocate ad budgets is to aim low for popular products that are already in demand. These are items you expect to do well so you don’t need to go overt with their marketing. You need only be concerned with new product launches. These are the items that could do with a higher ACOS range, just in the initial stages. This could help the product gain an audience and attract attention, which is crucial for establishing a brand presence.

Automated and Manual

Automated campaigns are great for beginners. A week’s worth of campaigns will give you enough data to decide which keywords are working and which ones aren’t. You can sort out the top-performing ones in a very short period of time, without the hassle of time-consuming research. However, do note that sometimes, additional research is exactly what optimization is about.

Remember , automated campaigns are just a stepping stone that help you perfect your strategy. Once you get familiar with the trending keywords, you can feel comfortable about shifting towards manually arranging campaigns. 

Optimizing Keyword Bids

You need to adjust and optimize your bids by constantly monitoring conversion rates. If a keyword isn’t performing as well as expected or if there is a decline in search traffic for it, then you don’t need to pursue it so keenly. It might be time to move on to another keyword.

Sell more, spend less

Advertising says as much about your brand as it does about the product you’re selling. Sometimes the best thing to do is diversify your ad formats and market the product across different mediums such as video, display and more. It is also worth mentioning that in addition to traditional Amazon advertising, you need to make sure you’re promoting your product on other available digital platforms such as social media, Google and Youtube. A lot of your strategy will depend on the type of product you’re pushing forward.

Final Thoughts 

Optimizing your ads is a huge part of being a successful e-commerce seller. Growing on Amazon is a goal that requires a great deal of groundwork. Showcasing your product to target audiences and finding leads who are willing to buy is a big part of that. It is a process that demands you start out slow and steady before you make any major groundbreaking decisions. Hopefully, a lot of the tips we covered in this article will help you do just that.

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