A lot of people have been asking me about my PPC Strategy, so here it is, guys: The Ultimate Super Duper Awesome Guide on Amazon PPC. In this guide, I will explain everything, starting from the basic definitions all the way to my Expert PPC Strategy. All in all, I hope to make this a well-rounded PPC Tutorial that will help all sellers. If there are any questions, I would happily answer them in the comment section.
Why PPC is essential
So this seems like a obvious one right: More sales, duh!
Well, my theory goes a bit deeper than that. Amazon ranks your products based on their average sales in the last X days. So that means if you:
Increase your sales with PPC -> Higher organic ranking -> More organic sales!
So even if you break even on your PPC campaign, you will still benefit from it, as you will get more organic sales!
Definitions
Here are the basic PPC definitions. I think most people will already know most of these, but I will cover it just in case.
- PPC: Pay Per Click: Type of advertising where you pay for each click you receive.
- ACoS: Advertising Cost of Sale: Metrics are used to measure the performance of an Amazon PPC campaign. ACoS is calculated using ad spend/sales. If you have an ACoS of 20%, you spend $0,20 to get $1 in sales.
- Automatic campaign: Campaign where Amazon will use its algorithm to pick related keywords to use.
- Manual campaign: This campaign is where you can manually add your keywords.
- Campaign out of budget: When you spend more than your daily budget for that day.
- Default bid: Amount of money you want to pay per click for a keyword
- Negative keywords: Keywords you can add to your campaign for which you don’t want to advertise. For example, if you are selling: “Red Garlic Presses”. You probably don’t want to show up for “Blue Garlic Presses.” So you can add the word: “Blue” to your PPC campaign as a negative keyword and your ad won’t show for “Blue Garlic Presses”.
Understanding your target ACoS & Profitability
Ok, so now that we know what ACoS means, we can set our target ACoS. I get a lot of people asking me:
What is a good ACoS?
What ACoS should I aim for?
This all depends on your product’s profitability & your goals.
The goal for me is to setup a Profitable PPC campaign. You can also use PPC as a launch strategy, which I have covered in my Product Launch Case Study.
So we first have to know our profitability. Lets say I am selling a Garlic Press for $20. Amazon will take $5 in fee’s, my product & shipping cost are $7, I have an additional $2 in overhead cost, and I will have to pay around $1,60 sales tax. This will leave me with $4,44 in profit, or a 22% profit margin.
This means if I want to run a profitable PPC campaign, I should have an ACoS of 22% or lower.
Target ACoS =< Profitability
1). Keyword Research
First we start by generating our keyword list. This is very important as you obviously want customers to find you for any possible keyword they use. You have a couple of ways to find more keywords, and I will show you the tools I use for this process below.
Amazon auto-correct
Do you know that when you type something in the Amazon search bar, Amazon will automatically try to guess what you want to search for?
This is very valuable information! Amazon will most likely suggest the most searched keywords here! So it is basically giving you the most searched keywords right here! This is great start. However, we don’t really know the search volume per keyword. So we will need a Keyword Search Volume Tool.
Google Keyword Tool
This is a keyword search volume checker by Google. Simply enter your main keyword, and Google will generate a large list of related keywords & sub-keywords. It will also add an estimated search volume for each keyword.
Go to the Google Keyword Tool website.
This is not specific for Amazon search! Please take this into account! The Google Keyword Tool will generate a list of keywords based on Google searches! But it can still be great for generating a broad list of keywords.
Keyword Scout Tool
Of course our friends at JungleScout have made a keyword tool. This works very similar to the Google Keyword Tool, only this tool is specific for Amazon! So it will generate list of keywords for you & their estimated search volume.
Not only that, but it will also give you a suggested PPC bid and a bunch of other futures. I am not going to discuss all the features, but it is definitely a must-have!
Go to the Keyword Scout Tool Website
2). Setting up our PPC campaigns
Now let’s get to business and actually start setting up our PPC campaigns. This is my PPC strategy, there are loads of different ways to approach this, but I will just describe what works best for me.
In the beginning, my goal was to gather even more potential keywords. For this, I always start with two campaigns:
Auto Campaign
Pretty basic, I just run an auto campaign and let Amazon add keywords based on their algorithm.
Default bid: $1
Daily budget: $10
Manual Campaign
Here is where I enter the keywords I found in step 2. I added them as Broad Match to ensure I gathered as many search terms as possible.
Default bid: $1
Daily budget: $10
I will let these campaigns run for at least two weeks before I start analyzing them.
3). Analysing & Adjusting PPC campaigns
Okay, by now, the campaigns have been running for at least a couple of weeks, and we should have plenty of data to work with.
There are a couple of things we want to do:
- Find new keywords. There is a good chance the broad match or the auto campaign has used new search terms we did not know about. We can add these new keywords to our listing!
- Adjust PPC Bids: Based on our target ACoS ( 22%), we want to adjust our bid. If we see keywords with an ACoS below 22%, we will increase our bid. If we see keywords with an ACoS above 22%, we will decrease our bid.
- Remove unrelated keywords: Since we have cast a very wide net to gather loads of keywords, we will probably have a bunch of unrelated ones. These are pretty easy to spot and will be removed or added as negative keywords.
To extract the search terms, you have to download the Advertising Report:
Once you have downloaded the Excel sheet, you can format it so you have a better overview of all the stats. The most important stats I look at are:
- Keyword
- Customer Search Term
- ACoS
Below, I have created an example that I will analyze for training purposes. So you have keywords, which are the keywords you entered. And we have Customer Search Terms, which are the actual search terms customers entered when they clicked on the PPC ad.
Time to analyze!
First we have our keyword: “Garlic Press”. As you can see, this keyword has an average ACoS below our target of 22%. So we can increase the bid for this keyword to get even more impressions & clicks while staying profitable! However, we can see our broad match also included the search term “Garlic Press Set”. This search term is not very specific to our product as we do not offer a set. So, we will add the word: “Set” as a negative keyword.
Our second keyword: “Garlic Chopper”, was found with our automatic campaign. I had no idea people used this as a search term, so we will add this to our listing. The keyword “Garlic Chopper” has an average ACoS above 22% so we will decrease our bid, so we can get this ACoS down for this keyword. We will also add the word: “Electric” to our negative keywords as this is not related to our product.
At last the auto campaign has also used the keyword: “Garlic Salt”. This is obviously nothing to do with our product and we will remove this keyword from our campaign.
Action points
- Increase bid on keyword: “Garlic Press.”
- Add “Set” as a negative keyword.
- Decrease bid on keyword: “Garlic Chopper”.
- Add the newly found keyword, Garlic Chopper, to our listing.
- Remove the keyword: “Garlic Salt” from the campaign.
So I hope you get the idea behind this PPC strategy. We basically want to use as many keyword as possible in our campaign to direct every possible buyer to our product. However, we don’t want to spend money on unrelated keywords or overspend on keyword that might not be profitable for us.
In the end, we want to have a nicely fine-tuned campaign like mine:
4). Rinse & Repeat!
So as you can imagine this is an ongoing process! Amazon is a fast moving marketplace with new competitors arriving and leaving everyday. Meaning the bids for keywords are always changing!
After your first time you have filtered all the unrelated keywords, but you still need to adjust the PPC bid on a weekly basis. This is a lot of manual work, and since I am very lazy I like to have this task automated.
Sellics has this feature where you can automate these PPC tasks. You simply set a couple of rules and Sellics will adjust the bid in Seller Central for you!
Can you imagine how much time this is saving me?
Besides this feature I also love their PPC dashboard. It just looks way cleaner. I don’t want to waste my time downloading & formatting Amazon’s Excel sheet. I just want to quickly take a look at each campaign and see exactly how it is doing.
Thanks for putting this together. This answers the questions I had about PPC from your previous posts.
When you lower your bid on the “chopper” term in this example, that means you’ll win fewer bids, right?
So the sellers who win that bid out of your budget means they’re either getting their product cheaper or they aren’t making a profit on that keyword.
I really like how Jungle Scout’s keyword tool shows you the bid prices for keywords.
Jup you got it all correct! Some sellers are indeed running unprofitable campaigns. For example when I launch a new product I don’t really care if the campaign is unprofitable, I just want to get that click at all cost.
Appreciate the post. When would you recommend I start PPC? As soon as the product arrives at amazon? Or after some other sales and reviews have occurred?
I use PPC when I launch my product, which I talk about here.
Then when the product has some reviews, I will setup a long term PPC campaign which I talk about in this strategy.
Hey there! I’ve got a couple questions:
1) How quickly did you ranking move up after you started using PPC?
2) Were you able to rank on page 1?
3) If you bid the highest amount for a keyword (if someone is bidding 0.5 and you bid $1.0), does that mean your add will be the first one to show up on page 1?
Thanks!
If you target an ACoS of 22% or less, won’t an ACoS of exactly 22% in your example result in no profits? I’m interpreting your example as you have 22% profit to play with and if it’s all taken up by your ACoS doesn’t that mean you won’t be profitable? Just trying to fill my numerous knowledge gaps. Thanks for teaching us!
You are 100% correct.There are different types of strategy & goals for PPC. But in my case I want to create as many PPC sales as possible, which will increase my sales velocity -> high organic ranking. So yeah, with 22% I am maximising my sales while still breaking even on my PPC sales, which will increase my organic ranking at the max. You can also set your Acos lower, if you want to run some profit on your PPC sales. Or higher if you really want to increase your ranking and are happy to take a loss in this ( something I do when launching products, you can read about here )
So initially you are spending roughly $280 for two weeks on PPC on a new product campaign. What happens if you don’t get enough data or the campaigns don’t spend the allotted daily budget? I’ve seen that before.
Once you run the campaign for two weeks, how do you adjust your spending?
Do I take a percentage of sales from those two weeks to continue running the campaigns?
For instance, my sale price is $20 on the item. I made 25 sales for the two week period which resulted in $500 gross (emphasis on gross and not net) in sales from that two week PPC period. Should I spend 25% ($125) for the next two week period? Do you make incremental adjustments in ad spend every pay period?
Thanks for the great tutorial.
I’m only asking because I don’t have a large marketing budget. As you know there are lots of charges that will cost you money along the way, so I wanted to have a good plan after that initial 2 weeks of ad spend is used up.
What do you advise?
You’re blog is very informative. Thank you
So at the end of optimizing your PPC campaign, do you turn off the automatic one and keep the manual campaign (that’s now been optimized) on?
Also with the Sponsored Product Search Term Report, I noticed that a lot of the search terms do not have a ACOS associated with them (meaning they are just left blank). I also noticed that an ACOS is only provided when you are generating sales. So does this mean that keywords that do not have an ACOS also mean that these words don’t generate sales?
Hi,
1). Yes I turn off the auto campaign once it has served it’s purpose and generated keywords for me.
2). Yes ACCOS is similar to conversion. In order to get a percentage you need at least 1 sales.
Hello,
what is your goal when using ppc? is it to be on the first page? Because with daily budget of $10-30 and 1.5 bids you will run out of budgets.
what do you do if your keyword that provided most sales have ACOS OF 120% and your profit margin is 35%. I had $2.33 and I was on top of the first page suggested bid is 1.89.
How long does it take to be ranked? when do you see growth in your sales, like how many keywords you need to be ranked
how do you know if your sales are organic or not? how can you tell if its ppc sale or organic?
can you gives your latest search term report as an example, you can hid your private info?
have you been in negative in your ppc? I have been bleeding with ppc so sorry if I ask too many questions.
How much money do you need to have for products that make 50-100k/month?
Hi,
Even though you said you don’t start analyzing for at least two weeks after turning your campaigns on, if you go the first few days and have literally 0 sales, wouldn’t you begin going back into the campaign and looking at the data or working on the listing rather than just waiting for two weeks?
Nah 1 day is not enough data to make a decision. Just let it run for at least a couple days until you start making any changes.
Hi Jacob
To rank on the first page organically, you need to pour a lot of time (and sometimes money) into optimizing your product listing. The top (red) section indicates Headline Search Ads; the middle (blue) section is home to Sponsored Product Ads; and the bottom (green) section shows the organic product listings
When you’re launching a new product on Amazon it’s easy to feel like a small fish in a big pond. Organic search results take time to kick in, but sellers need an immediate impact to ensure your investment pays off. Pay-per-click advertising (or PPC) is a quick and effective way to drive traffic to new products. However, if you’re inexperienced in PPC campaigns, or you choose the wrong technology to manage it for you, it can be an expensive exercise that doesn’t always yield the right results.
It is very typical to understand the A9 algorithm of Amazon how they preserve to use third party ads to gain sales.
Always people give up on ads even selling on amazon due their mindsets made by the services provider to look into the ACOS, ACOS matters a lot if you are spending on ads having huge Acos you are losing profits
That’s not the truth.
Why this as they want to sell their services or software to show you lower Acos but they do not care about the store revenue.
ACOS does not matters if with spending on ads and with high ACOS you are having item keywords ranking and getting organic sales.
Here is the trick if you have huge ACOS , collect targeting Keywords in Manual ads / Search terms in Auto those are having no sales with at least $3 spent and above. Copy and paste those in negative targeting and within 5 hours you will see the ACOS will be dropped around 4% to 5% right away and we have even observed 10% Acos for specific categories.
Like party supplies, Plush Toys, and seasonal toys, and seasonal items and Hardware. But you will be concerned as your total store revenue will get dropped as well within 24 hours. On this point you need to understand the Algorithm what you are missing?
1st. Item to be exposed in market
2nd. Brand item Awareness around the location
3rd. Ranking of keywords for Amazon even Google.
About 1st purpose, even we are launching new item or providing the copy of same older market item with updated version or the same.
How we can have buyer on that new listing on Amazon if there are thousands of strong listings having strong reviews and algorithm ranking?
Our goal seems to approach to that ranking and upon raking people buy item from your listings even you do not have any reviews.
So now our main goal is to show our item along with the competitors on tops pages.
What do you think how it could be possible to show a very new launch item on top page of Amazon along with competitors?
You have choices, UN ethical ways of using software, external ranking tools, Social Media Giveaways, Rebate systems where we pay tons of $ and gain ranking and it is totally faking the algorithm internal process which is not consistence in ranking even next month you will have to do same , process where you will be paying more to gain ranking etc.…. Learn More
Leave these NONE lasting processes off and use to start Amazon internal ads, use the same even less $ on the ads and gain permanent ranking factors which make algorithm satisfied for long terms basis.
You can now show your items along with the competitor listings on top page get exposure of your items right away within 2 hours. Now your item gets explored by the buyers as they will see your item along with their completion. They will click item read the features the item has.
More and more clicks help your item gain indexing and algorithm start pushing the listings towards the top pages to make easy for the buyers to approach towards your store item listings.
Here your item quality listings works to get visitor mindset change into buyer. This is another topic why buyer buys your store item along standing with your competitors.
About 2nd Purpose: who knows what brand is there if we could not approach to them at the right time as they are searching for the item on Amazon, as also buyer community is increasing there are always tons of new buyer join online market to buy items. So we always need to remain up to show them what we have. Its Ads work to show the item listings to potential buyer.
A permanent customer of a competitor will have choice to visit to your store listing for the same item and it is kind of awareness of your brand and item. Ads will make this happened to your store new listings right away.
Other than you will have to create awareness events along the location that we are brand we have these items please check our Amazon listings we are selling there. Spend ton $ on events to create buzz.
Please know this is what ads are doing for your brand item in the market. So have to spend $ on ads.
Why Amazon doing advertisement sell on Amazon, why Coca Cola is doing million $ ads on the TV and google even nobody is going to grab any item from the TV set or mobiles or from google.
It is all about awareness they are creating and we always go to shop and our choice is coca cola or other brands like them we are seeing ads on TV or on our cell phones.
Advertisement is kind of making mindset of people showing them item again and again and it is true when one specific brand item seen by a human again and again he naturally be buying that item to check what is it.
About 3rd purpose: as we know Amazon is having a very broad algorithm system that have an internal database tech to collect the behaviors of the users through their searches, use of words and to show them something very matched able to their wordings.
When again and again people search for item and click on specific item, algorithm starts pushing that items on top of the searches as it is automated installed in the system that push the item that is having huge number of clicks. And it double push the items those even get conversions with the clicks.
First with bidding items could be seen on 10th or lower pages and with high bidding we can have them on the 5 or less pages and can have impressions and clicks. As top 5 pages of amazon.com having high number of purchases.
When clicking starts algorithm starts pushing item on top of the pages organically as well as this process takes time but long last ranking is being processed.
The given detail is the deep insight of spending around 300 Million Dollars on Amazon ads for more than 200 seller accounts.
We convert this detail into a smart summary to have your easy understanding.
300 Million dollar spent Deep case study on Amazon PPC sponsor ads Acos matter
Posted on August 6, 2020 by amazonassistant in amazon
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It is very typical to understand the A9 algorithm of Amazon how they preserve to use third party ads to gain sales.
Always people give up on ads even selling on amazon due their mindsets made by the services provider to look into the ACOS, ACOS matters a lot if you are spending on ads having huge Acos you are losing profits
That’s not the truth.
Why this as they want to sell their services or software to show you lower Acos but they do not care about the store revenue.
ACOS does not matters if with spending on ads and with high ACOS you are having item keywords ranking and getting organic sales.
Here is the trick if you have huge ACOS , collect targeting Keywords in Manual ads / Search terms in Auto those are having no sales with at least $3 spent and above. Copy and paste those in negative targeting and within 5 hours you will see the ACOS will be dropped around 4% to 5% right away and we have even observed 10% Acos for specific categories.
Like party supplies, Plush Toys, and seasonal toys, and seasonal items and Hardware. But you will be concerned as your total store revenue will get dropped as well within 24 hours. On this point you need to understand the Algorithm what you are missing?
We must learn about ads why ads are being used? What is actual purpose of the advertisement?
Our Main purposes to run ads on Amazon as follow:
Report this ad
1st. Item to be exposed in market
2nd. Brand item Awareness around the location
3rd. Ranking of keywords for Amazon even Google.
About 1st purpose, even we are launching new item or providing the copy of same older market item with updated version or the same.
How we can have buyer on that new listing on Amazon if there are thousands of strong listings having strong reviews and algorithm ranking?
Our goal seems to approach to that ranking and upon raking people buy item from your listings even you do not have any reviews.
So now our main goal is to show our item along with the competitors on tops pages.
What do you think how it could be possible to show a very new launch item on top page of Amazon along with competitors?
You have choices, UN ethical ways of using software, external ranking tools, Social Media Giveaways, Rebate systems where we pay tons of $ and gain ranking and it is totally faking the algorithm internal process which is not consistence in ranking even next month you will have to do same , process where you will be paying more to gain ranking etc.…. Learn More
Leave these NONE lasting processes off and use to start Amazon internal ads, use the same even less $ on the ads and gain permanent ranking factors which make algorithm satisfied for long terms basis.
You can now show your items along with the competitor listings on top page get exposure of your items right away within 2 hours. Now your item gets explored by the buyers as they will see your item along with their completion. They will click item read the features the item has.
More and more clicks help your item gain indexing and algorithm start pushing the listings towards the top pages to make easy for the buyers to approach towards your store item listings.
Here your item quality listings works to get visitor mindset change into buyer. This is another topic why buyer buys your store item along standing with your competitors.
About 2nd Purpose: who knows what brand is there if we could not approach to them at the right time as they are searching for the item on Amazon, as also buyer community is increasing there are always tons of new buyer join online market to buy items. So we always need to remain up to show them what we have. Its Ads work to show the item listings to potential buyer.
A permanent customer of a competitor will have choice to visit to your store listing for the same item and it is kind of awareness of your brand and item. Ads will make this happened to your store new listings right away.
Other than you will have to create awareness events along the location that we are brand we have these items please check our Amazon listings we are selling there. Spend ton $ on events to create buzz.
Please know this is what ads are doing for your brand item in the market. So have to spend $ on ads.
Why Amazon doing advertisement sell on Amazon, why Coca Cola is doing million $ ads on the TV and google even nobody is going to grab any item from the TV set or mobiles or from google.
It is all about awareness they are creating and we always go to shop and our choice is coca cola or other brands like them we are seeing ads on TV or on our cell phones.
Advertisement is kind of making mindset of people showing them item again and again and it is true when one specific brand item seen by a human again and again he naturally be buying that item to check what is it.
About 3rd purpose: as we know Amazon is having a very broad algorithm system that have an internal database tech to collect the behaviors of the users through their searches, use of words and to show them something very matched able to their wordings.
When again and again people search for item and click on specific item, algorithm starts pushing that items on top of the searches as it is automated installed in the system that push the item that is having huge number of clicks. And it double push the items those even get conversions with the clicks.
First with bidding items could be seen on 10th or lower pages and with high bidding we can have them on the 5 or less pages and can have impressions and clicks. As top 5 pages of amazon.com having high number of purchases.
When clicking starts algorithm starts pushing item on top of the pages organically as well as this process takes time but long last ranking is being processed.
In the end the listings starts gaining organic sales. The organic sale total profitability for the store.
The given detail is the deep insight of spending around 300 Million Dollars on Amazon ads for more than 200 seller accounts.
We convert this detail into a smart summary to have your easy understanding.
For understanding TACOS we are proving you with a following specific method
First know your ads Acos NO profit, No loss point.
Retail price – Item Cost – FBA Fee – Shipping to FBA = Net Profit
Example
$16.99 – $4.99 – $5.99 – $1 = $5.01 will be the net profit
Net profit / Retail X 100 = No profit / No Loss Point (Acos)
Example
$5.01 / $16.99 x 100 = 29.48% the no profit no loss point for Acos as for example item.
Now on the point of TACOS. How it works?
A store having sales with ads section is following:
Ads 930 units sold with $7868.30 with $4605 Ads spent which led us to 58.52% Acos
Organic 1210 units sold with $11098.29
Total Store revenue is = 18966.59
Ads spent / Total store Revenue *100 = TACOS
4605 / 18966.59 * 100 = 24.27% TACOS.
Now check the no profit, no loss Acos was 29.48% and with help of ads we generated the organic sales and that led us towards the total profitability. Of 24.27% Acos which is actual to be considered.
This whole article is having actual facts regarding Advertisement and to understand the facts, to encourage the community to have proper awareness of the eCommerce business to start with.