My Ultimate Amazon PPC Strategy Guide

So a lot 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 an well rounded PPC Tutorial that will help all sellers, if there are any questions I would happily answer these 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. See I am a strong believer 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 just 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: Metric used to measure performance of a Amazon PPC campaign. ACoS is calculated by: Ad spend / Sales. If you have an ACoS of 20% this means you spend $0,20 to get $1 in sales.
  • Automatic campaign: Campaign where Amazon will use their algorithm to pick related keywords to use.
  • Manual campaign: Campaign 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 products 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 to customers to find you for any possible keyword they use. You got a couple of ways to find more keywords and I will show you the tools I use for this process below

Amazon auto-correct

You know when you type something in the Amazon search bar, Amazon will automatically try to guess what you want to search?

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 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 definitely a must have!

Go to 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 is to gather even more potential keywords. For this I always start with 2 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 my keywords I found in step 2. I add them as Broad Match to ensure I gather as many search terms as possible.

Default bid: $1
Daily budget: $10

I will let these campaigns run for at least 2 weeks before I start analysing them.

 

3). Analysing & Adjusting PPC campaigns

Ok by now the campaigns have been running for at least a couple 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: So 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 we 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 a negative keyword.

In order to extract the search terms you have to download the Advertising Report:

Once you have download 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 analyse for training purpose. So you have keywords, which are the keywords you entered. And we have Customer Search Terms, which is the actually search terms customers entered when they click on the PPC ad.

Time to analyse!

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 has also included the search term: “Garlic Press Set”. This search term is not very specific for 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 negative keyword.
  • Decrease bid on keyword: “Garlic Chopper”.
  • Add newly found keyword: Garlic Chopper to our listing.
  • Remove keyword: “Garlic Salt” from 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.

Click here to check out Sellics PPC Manager

My Ultimate Amazon PPC Strategy Guide
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10 Comments

  1. 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.

    1. 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.

  2. 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?

    1. 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.

  3. 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!

  4. 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!

    1. 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 )

  5. 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.

    1. 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?

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