Advanced Amazon PPC Strategy

 A PPC strategy is your end to end masterplan for running successful PPC campaigns on Amazon. It starts with defining the right goals and target KPIs and continues with defining a campaign structure, a set of regular optimization activities, and the measurement of success by systematic reporting and benchmarking.

Automatic vs manual PPC campaigns

Because the difference in campaign type plays an essential role in our recommended Amazon PPC strategy, it’s worth going over in a bit more detail.

Here are the differences between running an automatic versus a manual PPC campaign:

AMAZON CAMPAIGN TYPES         AUTOMATIC                 MANUAL

Add targets?                                      NA                                   YES

Set keyword match types?                      NA                                   YES

Set bids by target?                                      NA                                   YES

Add negative targets?                              YES                                 YES

And their respective benefits and drawbacks:

CAMPAIGN TYPES                            

AUTOMATIC   :          

What are the pros?                           

Less effort required + Amazon’s algorithm performs automatic keyword research.

What are the cons?

Imprecise ad targeting means a potentially more wasteful campaign

MANUAL: 

What are the pros? 

Precise ad targeting means a potentially more efficient and profitable campaign

What are the cons?

How to group products

Short answer: Don’t group. Create campaigns and ad groups – by ASIN.

Creating one setup per ASIN will give you the most control over your:

• targeting
• Amazon CPCs
• budget

Long(er) answer: Whether or not you can group your products will depend on your product portfolio’s quantity and diversity. Generally, products can be grouped if they share the:

• same keywords
• same profit margin

More effort and management required

Keyword research

Compiling a roster of relevant keywords is, well, key.

If you’ve dabbled in PPC ads previously, you will already have some idea of the most common relevant keywords for your product or product line. 

Nevertheless, and especially if you’re starting from scratch with a new setup, it’s a good idea to do some basic keyword research.

The following are potential sources:

• Brainstorming: consider synonyms and product qualities.
• Auto-complete function of the Amazon search field
• Sonar: a free Amazon keyword tool by Sellics.

Advanced Amazon PPC Strategy Template

With the basics covered, it’s now time to look at more advanced Amazon PPC techniques. The precise implementation details will be unique to your business, but there are still clear steps for every seller to follow when developing an advanced advertising strategy. That’s why we’ve compiled our five-step Amazon PPC strategy template to guide you through the process

Step 1: Establish an Amazon PPC goal

The first step when starting your campaign is setting a clear goal.

Assigning a clear goal will allow you to correctly measure your performance according to well-defined key performance indicators (KPIs).

Goal 1: Maximize sales or impressions

In a way, sales are always the goal. But the question is, at what cost? If your primary goal is to generate sales, that may come at the expense of profitability.

Prioritizing sales over profit usually means your return only needs to break even with spend, i.e. you need to achieve a break-even ACoS. A higher ACoS means you’re losing money. A lower one, and you’re in profit-making territory.

Break-even ACoS = profit margin before ad spend

                                         

When might sales be more important than profitability? When

• launching a new product. Sales beget sales by improving your organic ranking. Both directly and by potentially garnering reviews and increasing visibility.
• increasing brand awareness is your goal. In this case, in addition to conversions, impressions will be a focus KPI.

In these contexts, you’re using PPC ads to start a virtuous cycle or flywheel that encourages more sales and profit in the future. Usually, the ultimate goal will involve profitability and more profits can be reinvested in PPC ads and other marketing to restart the flywheel.

                                    

Goal 2: Generating Profit

When maximizing sales, it might be perfectly acceptable to break even or even spend more than you’ll earn from your ads. But to achieve profitability, your investment can’t be equal to or exceed your return.

To achieve an ad profit, you need to define a target ACoS. It’s a simple concept, but the execution can be tricky:

Target ACoS = profit margin before ad spend – target profit margin after ad spend

• target profit margin and target Acos in the Cost Structure and Profit Margin of an Amazon Private Label Product
• Calculate your product’s profit margin by deducting all associated costs (manufacturing, shipping, Amazon fees) from the selling price.
• The amount leftover (from 1) is both your profit margin and break-even ACoS: if you spend this amount on advertising, you won’t lose or make money – you’ll break even. It’s easiest to understand this number in % of the total sales price.
• Based on the % from step two, determine your target ACoS – which will necessarily be a lower percentage.

Step 2: Define the structure of your Amazon PPC campaign

Based on comprehensive data analysis and incorporating recent changes to the ad landscape,  created a new advanced edition of our tried and tested Amazon PPC strategy.

Our Amazon PPC strategy and campaign structure balances achieving the most precision and efficiency with the least effort possible. This gives you control over your ads without dominating your daytimer.

And while the resulting Amazon PPC campaign structure is robust and powerful, it’s also quite flexible, in that it can adapt to any goal.

Here’s recommended Amazon PPC campaign structure for 1 ASIN or 1 set of ASINs :

• 1 automatic campaign with 1 automatic ad group
• 1 manual campaign with 3 ad groups for broad, exact match keywords, and ASIN targeting
• 1 manual campaign with 1 ad group for category targeting

                        

This setup is leveraging each campaign’s benefits and match type by combining them. This lets you profit from their unique advantages while avoiding their respective shortcomings.

Automatic campaigns are easy to set up and have a vast reach. But, they can be wasteful to your budget since they lack precision. Manual campaigns have the accuracy needed to craft a more efficient campaign but are a lot more work.

In the Amazon PPC campaign structure above, each campaign and ad group has their own function:

• The automatic PPC campaign automatically performs target research
• then those targets are harvested and refined through manual campaigns and ad groups (broad match keyword or category targeting)
• Only the top targets are added to Amazon ad groups with the highest degree of control: an exact match keyword or ASIN ad group.
• This one-two punch is the perfect synergy and makes each campaign a cog in a collaborative system.

Step 3: Set up your campaign

The third step of a successful Amazon PPC Strategy is the setup. Here we look at how to set up the different components of your campaign.

Setup for your automatic (research) campaign

                                      

The importance of adding negative keywords to your Amazon PPC ad groups

To make the most of this campaign, you’ll want to add any existing keywords that you’re already targeting elsewhere as negative phrase matches.

You don’t want to waste a major league player in the minor league. Keep your scouts looking for new talent. 

This is especially important because Amazon’s algorithm prefers known targets, so if you leave the keyword in place in your auto campaign, it’ll steal traffic and keep you from making the most of your research campaign.

Amazon PPC Strategy: Setup for your manual campaign (broad, exact and ASIN targeting)

Why match type is so important for Amazon PPC campaign optimization

Broad match

The broad match setting makes your keywords flexible. Your Amazon PPC ad may appear when customers include these keywords in searches, period.

They may be: 

• in any order 
• include other search terms – even in between your keywords

This flexibility makes this ad group type useful for research, specifically for discovering long-tail keywords you might not have thought of.

The value of long-tail keywords is that their degree of specificity is likely to decrease their CPC while increasing the likelihood of a conversion. Think, “sprinkle donut with bite pool float.” 

Exact match

Such flexibility isn’t possible with an exact match campaign, which is the most rigid. Exact match type means it will match the keywords exactly – in the order you’ve written and without additional search terms.

This helps create a more accurate, performance-focused ad group because additional keywords can disqualify your product’s suitability for the search in many contexts.

Phrase match

You will soon notice we’ve neglected the phrase match type in our recommended Amazon PPC campaign structure and setup. The main difference between broad and phrase is that phrase match allows search terms to be tacked on before or after your keywords, but not in between.

While this match type is in some ways a “happy medium” between broad and exact, it’s a bit too narrow for research and too broad for a super-refined performance campaign.

Step 4: Campaign Optimization

Setting up your campaigns is a major milestone, but you’re not done yet. For your Amazon PPC Strategy to be successful, you need ongoing campaign optimization. The most important aspects are covered in this section.

Harvesting keywords and ASINs

• Optimizing targets for Amazon PPC campaigns is all about controlling traffic flow. What we call “harvesting” is a two-step process, that involves: 
• 
  
• Sourcing profitable targets from an ad group or campaign with a broader reach to a more precisely targeted campaign
• Adding them as negative targets in the source ad group or campaign – to halt traffic to those keywords.