Amazon Pay Per Click (PPC) Explained

If you’re an entrepreneur or a marketer, there’s a good chance that you are already aware of Amazon Pay Per Click (PPC). Amazon auctions off keywords to specific advertisers, and it’s a great way to increase traffic to your product. Amazon is one of the most crucial internet retail companies globally, so advertising on Amazon can be quite useful. 

Many Amazon sellers might take a long time to launch their product. They may have spent a lot of time researching the product and figuring out more about the demographics that might purchase their product. Of course, no one ever knows if a product will be successful or not until it’s launched. A PPC campaign can go a long way towards answering whether your product will generate a significant amount of revenue, or if it might fall by the wayside.

One of the reasons that Amazon PPC has become so popular is because advertisers only pay when their link is clicked on — hence the name “pay per click.” The right Amazon PPC campaign can be an incredible marketing tool. It should be noted that not every Amazon PPC campaign is the same, and that there are many factors to consider. Also, marketers and owners should always be researching the most current industry shifts to figure out how to improve a PPC campaign. Here, we break down some of the basics of Amazon PPC.

Details About Clicks

Many entrepreneurs or future entrepreneurs might be confused about how exactly this works — How does one bid on keywords? If you have to pay per click, how does Amazon determine the amount of money you have to pay? This section gives business owners a little insight as to how that number is determined.

First, owners and marketers can set up the maximum amount of money you will bid per keyword. One should do as much research as possible before figuring out a maximum dollar amount. There’s also another factor to consider, and that’s what the competitors are bidding! This will affect the number significantly. Entrepreneurs and business owners can also set a maximum daily budget for bids on the products they hope to sell on Amazon.

When to Start A PPC Campaign

Many business owners and marketers might be used to selling products over the internet, but may not see the value of PPC. However, PPC can help you sell more products on Amazon than ever before, and without it, you might be leaving a lot of money on the table when it comes to products.

If a business owner never made money on a product online, it might not be time to think about a PPC campaign. However, if your company has already had some success in selling products on Amazon, you might want to consider spending $25 a day on a PPC campaign. If you aren’t making enough money to afford a campaign like this, it might not be time to start thinking about PPC strategies yet.

Considering Conversion Rates

Many businesses believe that if they build a specific product, the masses will come out of hiding and immediately start buying up their products no matter what. Often, the truth is a bit more sobering. Business owners might find that even though many people know about their product, actually converting visitors into paying customers is much more difficult.

This is why many marketers should remain aware of conversion rates. A conversion rate is determined by the number of people that visited your page. Once you have this number, you can divide it by the number of products sold to get the conversion rate.

Conversion rates aren’t that particularly complicated. Let’s say that a business owner created a product and that 100 people have visited their page and potentially been interested in what they have to offer. If 10 of these people purchased their product, that means that the product currently has a 10% conversion rate. This is quite notable when you consider that the average conversion rate is around 2.3% (across all industries). Marketers might get excited about the fact that their conversion rate is much higher than that. If it is lower, it’s a sign that something needs to be addressed as soon as possible.

If your conversion rate is extremely low, then this is a significant issue for your PPC campaign. You might want to consider figuring out how to improve the conversion rate, whether it involves adding media, changing the language on your landing page, or offering a better deal or promotion.

Starting an Amazon PPC Campaign

Countless sellers are hoping to become successful by launching products through Amazon, and the process is relatively easy. If you want to start an Amazon PPC campaign, one would have to log in to Amazon Seller Central. Once you’re in Amazon Seller Central, you would head over to the Advertising Section. In this section, click the “Create Campaign” button. It’s a large, orange button and should be difficult to miss.

The next step is a bit more comprehensive. You will have to fill out details about your PPC campaign. This includes the campaign’s name, the daily budget, start dates, end dates, and targeting type. You can choose between manual or automated targeting. In manual targeting, you can target specific keywords. Automated targeting involves allowing Amazon to optimize and/or target for you.

You will then choose the products you wish to advertise. If you are new to Amazon and PPC, you may want to consider choosing one product to advertise at a time first. Enter your default bids, and then click “Save and Finish.”

How Do I Improve My PPC Campaign?

Many marketers and entrepreneurs are interested in launching products and figuring out how to maximize sales from particular products. They might then use these insights in the future, for other products. If you started a PPC campaign and are already seeing results, you might be curious about the question: How do I continue to improve this PPC campaign?

Amazon allows business owners and marketers to run weekly reports and learn more about which keywords work the best. This can be quite insightful when it comes to future PPC campaigns, and users should always be creating as many reports as possible. Marketers should also be targeting new long-tail keywords that may improve traffic considerably, and this takes continuous research for as long as the campaign is active. If keywords aren’t converting, they should be removed and replaced as soon as possible. Other marketers might also decide to purchase accounting software to more accurately measure the effectiveness of their Amazon product campaign.

Owners and marketers should also pay attention to the Amazon cost of sale. Here, we determine how much it takes to make sales. Let’s say that you are selling a popular product and decide to spend $1000 on an ad campaign. If you ended up selling $5,000 worth of product, the Amazon cost of sale here would be 20%. Entrepreneurs and marketers should make sure that their Amazon cost of sale (ACoS) is always lower than 25% and consider spending less and restrategizing if the ACoS dips below that number.

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