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Despite the product niche you choose, to break into the top 10 ranks, Amazon PPC is the name of the game. 

PPC or Pay-Per-Click is the primary way to market your product on Amazon. A PPC campaign targets relevant keywords and displays products to potential buyers. Through this advertising model, merchants secure top spots on search pages and divert traffic towards their product listings.

However, creating and executing an effective Amazon PPC strategy is easier said than done. It requires a whole lot of patience and fine-tuning to get the desired results. In this guide, we’re going to cover the A-Z of Amazon PPC and also share strategies on how you can maximize visibility for your products!

Here, you will learn:

  • What is Amazon PPC
  • The Different Types of Amazon PPC Ads
  • Effective Amazon PPC Strategies
  • How to Optimize Amazon PPC Campaigns

Let’s start from the basics.


What is Amazon PPC?

Amazon PPC is a mode of advertising that allows first and third-party sellers to market their products to millions of customers. The ad fee only applies when a customer clicks on an ad—you literally have to pay-per-click. There are three different types of PPC ads you can run:

  1. Sponsored Products
  2. Sponsored Brands
  3. Sponsored Display
To run sponsored ads on Amazon, sellers must meet the eligibility criteria

Different ad types have different eligibility criteria (as we’ll explain later in the blog). It’s also worth noting that any sort of product promotion must adhere to Amazon’s Sponsored Advertising Guidelines.

How Do I Start a PPC Campaign?

To start a PPC campaign, log into your Seller Central account. From there, go on over to the Advertising Tab and select Campaign Manager. Here, you can choose from three different PPC campaign ad types based on your account health, selling plan, product condition, Brand Registry status, and category eligibility criteria.

Is Amazon PPC worth It?

Amazon PPC is worth every penny. Don’t be swayed by the naysayers or sellers that have had negative experiences running ads on Amazon. Getting the desired results from PPC campaigns doesn’t happen overnight. It requires patience and executing the best Amazon PPC strategies—many of which we’re going to discuss in this blog!

Important Amazon PPC Terminology

There are plenty of terminologies associated with PPC campaigns on Amazon. Let’s cover the important ones before moving onto the more advanced aspects of advertising.

  • Advertising Cost of Sale (ACoS): ACoS is a PPC terminology you’ll see quite often and is used to determine the ratio of ad spend to targeted sales. In simple words, it is the amount of money spent on ads for every dollar of revenue made. Here’s the formula:


ACoS = Total Ad Spend ÷ Total Ad Revenue x 100

For example, if you spent $10 on advertising and generated $100 from those ads, your ACoS is 10%. The lower the ACoS, the better.

  • Return on Ad Spend (RoAS): Return on Ad Spend is the inverse (or opposite) of ACoS and is used to find out if your ads are profitable. Just flip the formula of ACoS and you get RoAS:


RoAS = Total Ad Revenue ÷ Total Ad Spend

Any value above 1 is positive and below that indicates room for improvement.

  • Clicks: The number of times customers clicked on your ad
  • Impressions: The number of times your ad was displayed to customers
  • Cost-Per-Click (CPC): The cost of customers clicking and viewing your ad. The higher the amount, the more competitive the keyword/product niche.
  • Click-Through-Rate (CTR): Click-through rate shows the effectiveness of your ads i.e. how often customers clicked on them. A low CTR rate indicates that the ads are either targeted at the wrong audience or need further optimization. To calculate the CTR use the formula:

CTR = Clicks ÷ Impressions x 100

Note: Generally speaking, 25% or lower ACoS is considered really good!

Optimize Your Product Listings before Running Amazon PPC Campaigns

Both front and back-end listing optimization are vital for increasing the CTR of your Amazon PPC ads. That’s because the A9 algorithm ‘reads’ your product listing and picks up on keywords. It then determines your target audience based on the keywords you’ve included in your listing. Getting this part wrong results in wasted resources and makes PPC ads unviable in the long run.

To start your Amazon PPC journey on the right foot, here’s an excellent piece on optimizing Amazon product listings

How Do PPC Auctions Work?

Just like any other auction: the seller with the highest bid gets their ad positioned at the top of search result pages (or ad rank #1). For example, if seller one bids $2.00, seller two bids $2.40, and seller three bids $3.00, seller three wins the placement. But seller three won’t be charged $3.00 for every click, instead just $0.01 more than the second-highest bid i.e. $2.41. 


The Different Types of Amazon PPC Ads

Formulating an Amazon PPC strategy depends on your goals as a seller. The most popular advertising method on Amazon (and the oldest) is Sponsored products followed by Sponsored Brands and finally Sponsored Display. 

Once you understand how each mode of advertising works, it becomes easier to create an Amazon PPC strategy that best suits your needs.

Sponsored Products

Sponsored product ads can be seen virtually everywhere on Amazon. These are most notably found at the very top of the rank 1 search page and can easily be confused for being the top-ranked products (which plays to your advantage)

Sponsored Ads featured at the top of search pages record higher rates of conversions

Much of our discussion on Amazon PPC management and strategy will revolve around sponsored products. This type of ad strategy allows sellers to target keywords manually and automatically, hence the campaign names:

  • Automatic Targeting 
  • Manual Targeting

In automatic targeting, Amazon decides where and who to target based on the information extracted from your product detail page. For older and more established listings, how buyers interact with a product listing (i.e. consumer behavior) is used by Amazon’s algorithms to continually refine automatic targeting campaigns resulting in better CTR.

In manual targeting, you decide which keywords to bid against. Your ad will only appear against certain search results which might be a bit costlier than automatic targeting. The upside to manual targeting is improved conversion rates and lower ad-spend (at least in the long run).

Sponsored Brands

Sponsored Brand ads let sellers promote multiple products for related keywords. It’s a powerful brand-building tool especially for mid-tier sellers with more than one product/item for sale. Here’s how a Sponsored Brand ad appears on Amazon:

Sponsored Brand ads – A powerful marketing tool for mid-tier sellers

Customers that click on the ad are either led to a product detail page or the brand’s storefront depending on where they click on the ad. Sponsored Brand ads are three types: Product collection, Store spotlight, and Video ads.

Video ads are generally associated with lower Advertising Cost of Sale (ACoS)

The first two formats usually appear at the top of the search page whereas Video ads are found somewhere in the middle. A video ad should be professionally made, be 15-30” long, and showcase your product’s functionality to have the maximum effect.

Video ads can run for a maximum of thirty seconds!

Note: You can also run product collection Sponsored Brand ads with a single product.

Sponsored Display

Sponsored Display is the latest addition to Amazon’s advertising toolkit. Unlike the previous two types of Amazon PPC ads, Sponsored Display focuses on buyer behavior and interests. It allows sellers to engage and re-engage with customers both on and off the platform. 

High-quality imagery plus Sponsored Display ads are a powerful combination!

Owing to their relatively recent entry onto the Amazon PPC scene (they were introduced in 2019), Display ads aren’t as popular as their counterparts. Like both Sponsored Products and Brands though, Display ads serve a unique role in attracting buyers and add depth to your advertising strategies. 

Note: You must be Brand Registered on Amazon to avail the Sponsored Brands and Display modes of PPC advertising.


Amazon PPC Strategy – Points to Consider Before Creating an Ad

There is no one-size-fits-all Amazon PPC strategy for every seller. The structure and type of PPC vary based on the goals and the current stage of the business. If you’re a brand new seller, profitability shouldn’t be at the top of your priority list (at least, not for the short term). The aim should be to start making sales so you can move up the search ranking pages and eventually drive organic sales.

Similarly, at this stage, running Sponsored Brand ads would make little sense as you most likely just have one product listed on Amazon. With that being said, the intent behind running PPC ads can—and should—fall in line with one of the following:

  • To increase sales velocity: The goal for new sellers or sellers launching new products.
  • To decrease ACoS: Once paid traffic starts coming in, attempt to decrease ACoS to make advertising viable.
  • To increase brand awareness: Now that there is a fixed number of monthly sales coming in, aim to increase the ratio of organic orders.

Note: It is possible—and in some instances encouraged—to run different ad types simultaneously. However, that should only be done once you’ve gained the experience of running each ad type individually. 


Amazon PPC Strategies for Sponsored Products

Sponsored Products are the most popular types of PPC ads amongst sellers. This is because they’ve been around the longest and don’t have Brand Registry as a prerequisite. If you’re a brand new seller and plan on starting your first ever PPC campaign, don’t obsess over CTR or ACoS percentages—for now, the goal should be to learn how Amazon advertising works. 

In terms of timeline, there is no end date for Sponsored Products ads. They start from day one and should continue for as long as you plan on doing business on Amazon. It’s recommended to pause campaigns and carry out optimization in case they are underperforming instead of deleting them altogether.

Setting up Automatic Targeting PPC Campaigns

To set up an automatic targeting sponsored ad, go to your Advertising tab, click on Campaign Manager, and select Sponsored Products. Once that is done, you’ll be redirected to a new webpage that looks like this:

Include your product name, targeting and bidding strategy, and date in your campaign names 

Fill each section with the relevant details.

  • Campaign name: As your operations grow, you’ll likely be running multiple Sponsored Product campaigns side by side. Assigning unique names to each campaign makes it easier to recall the purpose and type of ad. You can create a name according to a set format like:


Main keyword-SKU-automatic or manual-bidding strategy-date. Following this format, an example could be: Garlicpress-GP1-Auto-Substitute-9/21/2021


  • Dates: Select the period for which you want to run a particular campaign. We recommend setting it to ‘No end date’. That’s because even if a campaign is at break-even or bringing in sales at a loss in the short run, it’s still building up history and a correlation between your product and a set of keywords. This results in improved targeting and reduced ad spend in the long run.
  • Daily budget: The amount of money you wish—or can afford—to spend on an ad per day. 
  • Targeting: The crux of Sponsored Product ads—automatic and manual targeting campaigns. Let’s focus on automatic targeting first.

Note: In the initial stage, leverage Sponsored Products to learn more about high-performing keywords and the campaign type that produces the best results. 

Campaign Bidding Strategy 

Next, you have to decide what bidding strategy is best for your product ads. Choose from one of these three:

  • Dynamic bids – down only: Let’s say you want to start bidding at $1. By selecting this option, Amazon will only place your ad if the placement available costs $1 or less. It’s a conservative approach that’s suitable for sellers operating on a budget. You could set a value and then gradually increase it with time to determine the price range at which your ads get displayed to shoppers.
  • Dynamic bids – up and down: This option allows for an aggressive-style bidding approach. Amazon will increase your bid (by up to 100%) in real-time if there’s a higher chance of conversions. Likewise, it will decrease the bid if your ad is less likely to make a sale.
  • Fixed bids: Your bids are fixed and won’t be changed by Amazon. Not as useful as the previous two options.
  • Adjust bids by placement: This allows you to adjust your bids (by up to 900%) if you wish to target the top of search pages or product pages in particular. Needless to say, this is a hyper-aggressive bidding strategy based on the bid percentage you set.

Note: Campaign bidding strategy options remain the same for both Automatic and Manual targeting campaigns.

Creating Ad Groups

For added convenience, Amazon lets sellers group together different ad campaigns that target the same keyword or product. Once again, there is no right way of setting a name for an ad group—just use whatever makes it easier to remember when and why you clumped together various ad campaigns.

Automatic Targeting 

There are two ways you can place bids for automatic campaigns. Either set a default bid (go double or triple of what Amazon suggests) or set bids by targeting groups.

Pro tip: set bids higher than what Amazon suggests

You can run automatic campaigns based on different keyword match types:

  • Close match: Targets shoppers using search terms/keywords that are closely related to your product. For example, if your product is a “pen holder cup” then Amazon will show it to shoppers searching for “pen holder” and “pen cup”. 
  • Loose match: Targets shoppers using search terms/keywords that are loosely related to your product. Assuming your product is a “chair sock”, keywords considered loose matches would be “chair feet covers”, “chair feet protectors”, and other synonyms.
  • Substitutes: Targets shoppers using search terms that act as substitutes for your product. For example, if you’re offering a product as a ‘set of two’, Amazon will display your ad to customers searching for the same product but in ‘sets of five’. 
  • Complements: Targets shoppers looking for products that compliment your product. For example, if your product is a “skateboard helmet”, your ad might also appear to shoppers searching for “protective knee pads”.

If ‘Close’ and ‘Loose’ match campaigns target keywords, then ‘Substitutes’ and ‘Complements’ focus more on targeting competitors’ products or ASINs. Thanks to these different targeting groups, you can extract information on high-converting keywords and product pages. 

You can also create four different automatic campaigns based on each targeting type. This allows for greater control and the ability to see which targeting campaign is providing the most bang for its buck.

Setting up Manual Targeting Campaigns

The second half of Sponsored Products ads: Manual Targeting. As the name implies, you will need to provide Amazon with a list of keywords against which it will display your ad to potential buyers. But if you’re starting a Manual Targeting campaign for the first time, you will need to research high-performing and highly relevant keywords.

To do that, we created an in-depth Amazon PPC keyword research guide using our ZonGuru toolkit and in particular, the Keywords on Fire tool. Equipped with a list of relevant keywords, select the first type of targeting campaign: Keyword Targeting.

A comprehensive Amazon advertising should include both manual keyword and product targeting campaigns

Keyword Targeting on Amazon

Manual keyword targeting lets Amazon know which keyword searches you want your products to appear on. 

You can also choose the degree of relatedness by selecting one of the following match types:

 

  • Exact match: Targets a specific keyword and also includes its singular and plural forms (e.g. basketball/basketballs), slight variations in spellings or misspellings (e.g. basketbals, baskeballs), and articles as well (the basketball, a basketball, etc.). Exact match campaigns generally have higher CTR (Click-Thru-Rate) owing to keyword specificity. 
  • Phrase match: Targets keyword phrases related to your product. For example, if you’re selling stainless steel scissors, Phrase match manual campaigns might display your ad on searches like “stainless steel scissors pack of 3”, “stainless steel scissors pack of 6”, or “stainless steel scissors japan”, etc.
  • Broad match: Targets broad phrases related to your main keyword. Let’s assume you’re selling a plastic toothbrush. Amazon will also target search terms like “biodegradable bamboo toothbrush”, “bulk pack of 20 toothbrushes”, “no nylon plastic toothbrush”, etc. The CTR with this type of keyword targeting is usually low.

Note: Using the ZonGuru Keywords on Fire tool makes it possible to extract tons of relevant keywords making and create Exact, Phrase, and Broad match campaigns for each keyword.

Product Targeting on Amazon

With this option, you can advertise your product(s) on your competitors’ ASINs. We encourage you to go for product targeting especially if you find weaknesses in your competitors’ listings e.g. irrelevant or low-quality product images, bullet points, product descriptions, etc. By offering a superior product, you can convince potential buyers and re-buys to switch to your product. 

Target under optimized product listings via product targeting

You have the choice of targeting individual products or an entire sub-category. For example, if you’re selling “clear plastic folders” then there is the option to target the entire category which would be:

Office Product > Office & School Supplies > Filing Products > Folders > Project Folders

Note: Identify your competitors with the Keywords on Fire tool. Then, use the Keywords Spotlight tool to identify weak points and gaps in competitors’ listings to determine which ASINs are worth adding to your Sponsored Products Manual Product Targeting campaigns!

PPC Strategies for Sponsored Product Ads

After starting both automatic and manual campaigns, let them run for around 1 to 3 weeks. This is enough time for you to start analyzing PPC ad performance and optimize campaigns. 

Optimize Automatic and Manual PPC ads

In our Amazon PPC keyword research blog, readers learned how to download advertising reports generated by automatic campaigns. The purpose behind this activity was to identify converting keywords (denoted by a high CTR rate) that required low ad spend. 

This time though, we’ll go one step ahead and learn in detail how to utilize such keywords to continually optimize our Sponsored ad campaigns. You will also learn how to properly leverage the negative keyword and product targeting features to further refine Amazon PPC ads.

But first, you will need to inspect the performance of your sponsored ads until now. To do that:

  1. Head on over to Campaign Manager found under the Advertising Tab
  2. Click on Advertising Reports
  3. Select the Create Report option
  4. Click on Sponsored Products and then select ‘Search term’ as your report type 
  1. Choose Summary as your Time unit value
  2. Set the Report period for one month (or however long the campaign has been running)
  3. Go to your ‘History’ section and download the report

Once you open the report, you’ll notice a few columns on the right-hand side of ‘Customer Search Term’ that Amazon has been automatically targeting on your behalf. It will resemble something like this:

Note down the list of keywords that have a high number of clicks, a decent Click-Thru Rate, and low Cost-Per-Click. Similarly, some keywords will have a high number of impressions and clicks along with a low CTR percentage. These keywords are responsible for budget bleeding and need to be phased out. At the end of this activity, you’ll be left with a list of desirable and not-so-desirable keywords.

Stage two of automatic and manual ad optimization involves:

  • Creating new manual targeting campaigns
  • Adding underperforming and costly keywords to negative keyword and product targeting

Thanks to the advertising reports and the keywords provided by the ZonGuru Keywords on Fire tool, you can now create Exact, Phrase, and Broad ad campaigns for higher conversion rates!

Utilize the Negative Keyword and Product Targeting Feature

Within Sponsored Ads, there’s an option to avoid keywords via negative targeting i.e. not display ads for specific search terms. Why should anyone deliberately not target relevant keywords? For a couple of reasons:

  • Underperforming keywords: keywords that prove to be costly i.e. high CPC (Cost-Per-Click) and don’t result in sales.
  • Irrelevant keywords: For example, for a ‘plastic water mug’ product, search terms like ‘metal water mug’ and ‘wooden water mug’ would be irrelevant.
  • Valuable keywords: Keywords that perform well (according to advertising reports generated by automatic campaigns) and are added to manual targeting campaigns. If you don’t add such keywords to negative targeting, you’ll have 2 different ad campaigns targeting the same keyword (resulting in increased competition and money down the drain).

Reasons for adding ASINs to negative product targeting include:

  • Prevent wastage of resources: There’s a high chance that within your targeted niche are sellers with thousands (or tens of thousands) of positive product reviews. Unless you’re on par with such sellers, it’s best to avoid them for the time being (an example is shown in the image below).


Image Caption: 

  • Non-competitors: Like the example we gave for irrelevant keywords (plastic, water, and metal mugs), irrelevant or non-competitors need to be shunned aside. You don’t want your plastic water mug appearing on a metal water mug’s product listing/ASIN. 

Negative keyword targeting has two match types: negative exact and negative phrase. Adding products to negative exact will prevent your ad from appearing for specific search terms. In negative phrase, related keywords are also avoided, similar to how manual phrase campaigns work.

For negative product targeting, you can create a list and add products by ASIN, SKU, or name.


PPC Strategy for Sponsored Display Ads: Use Your Ad to Expel Competitors 

Here’s a lesser-known PPC strategy not many sellers know about: Using Sponsored Display Ads to protect your own product listing. Remember how we discussed the position of Sponsored Display ads on competitor product pages? They’re super useful in attracting shoppers ready to purchase from a competitor (especially if they’ve invested time and effort into creating high-quality product images). 

But just as your Sponsored Display ads are on the offensive, a rival seller’s ad might present itself on your listing as well (the likelihood of this increases as you move up the rankings). If you don’t mind dishing out extra cash to protect your listing, target your own ASIN via product targeting within Sponsored Display campaigns!

Let’s look at an example. The ‘La Jolie Muse’ store offers luxury home and garden goods including candles, dinnerware, planters, etc. On Amazon, they offer numerous products including an outdoor flower pot. If you scroll down below to where Sponsored Display ads are shown, you’ll find similar products offered by the same store.

Self-targeting Sponsored Ads – A good defense is the best offense!

By creating self-targeting Sponsored Display ads, the folks over at La Jolie Muse have prevented their competitors from targeting their listings and diverting potential buyers!


Frequently Asked Questions – Advertising on Amazon

Time to answer some commonly asked questions related to Amazon PPC and advertising strategies in general.

How Do I Optimize PPC on Amazon?

To optimize PPC campaigns on Amazon, check how your current ads are performing. Download advertising reports for your automatic sponsored ad campaigns and identify both good and bad keywords. Add the costly/underperforming keywords to negative targeting and create new manual exact campaigns to target the high-performing ones.

Why is Amazon PPC Important?

Amazon PPC is so important because it’s the single, most powerful advertising method of generating sales and climbing the rankings. Without Amazon PPC, your product listing—regardless of how well optimized it may be—won’t gather enough steam to a point where you can start bringing in organic orders. Knowing Amazon PPC is vital.

How Do I Find My Amazon PPC Keywords?

By using advanced keyword research tools like ZonGuru’s Keywords on Fire. It automates the entire process—all you have to do is enter your product details and apply a few filters and that’s it. Dozens of high-demand, low competition keywords will appear for you to add to your Sponsored ad campaigns or incorporate into your product listings!


One Strategy to Rule Them All: ZonGuru’s Keywords on Fire tool

Having read this far, it should be clear by now that keywords—and high-performing keywords in particular—are the cornerstone of Amazon PPC success. Not knowing what to target makes it almost impossible to bring in sales and get the ball rolling!

Whether you are a new seller about to create your first sponsored ad or a veteran looking to strengthen your advertising arsenal, the Keywords on Fire tool is the one and only Advanced PPC keyword research tool you’ll need to get there.

Access a 7-day trial and check it out yourself!

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