2. I. IDENTIFYING AMAZON PPC
What You Can Expect : The Pros and Cons
Sponsored Product Ads
Sponsored Brand Ads
Sponsored Display Ads
II. HOW PPC Works
What You Need to Know : Terms and Guidelines
Sponsored Product Ads
Sponsored Brand Ads
Sponsored Display Ads
III. THE COST OF PPC
What You Need to Know : Terms and Guidelines
Essential Pointers in Planning Your Expenses
Drafting Your Budget : A Step-by-Step Guide
Table of Contents.
3. Identifying
Amazon PPC.
+ What You Can Expect : The Pros and Cons
+ Sponsored Product Ads
+ Sponsored Brand Ads
+ Sponsored Display Ads
01
4. What You Can Expect:
The Pros and Cons.
With an Amazon advertising strategy in place, you position your
products directly in front of potential buyers. It works in a similar
way to posting ads on Google. The difference is you no longer have to
fret about placements. Amazon takes charge of positioning your ads
strategically on the platform.
Studies have shown that 9 out of 10 online shoppers search on Amazon
every day. Considering this fact, it stands to reason why sellers like
you will benefit much from taking advantage of Amazon advertising
solutions.
The three solutions fall under the umbrella term PPC (Pay per Click).
Despite having different purposes, they all charge on a per-click basis.
With this, you have the freedom to bid on the amount you desire for
each click.
5. Traditional advertising outside Amazon involves intensive
research and coordination. To find the most lucrative positions
for your products, you need to put in a lot of work to identify
top spots that your target market frequents. With PPC ads of
Amazon marketing, you no longer have to concern yourself
with all these tedious tasks, as they open you to receiving
the following benefits:
The Pros.
6. The Pros.
Advertising your products on Amazon
automatically improves its visibility online.
With this, you also build a stronger influence,
as the ads make buyers more familiar with
your brands. Overall, being more visible
helps draw more customers, hence helping
drive more sales.
Regardless of the solution you choose, you will only
be obliged to pay for each click. And with that, you
even get to decide on how much you want to bid
for each click. Thus, you have better control over
the amount you spend on your advertisements.
Because your ads appear on the platform
itself, they directly connect with potential
buyers. Therefore, you no longer have to
search far and wide for ideal spots for ad
placement. Overall, this advantage buys you
more time for focusing on other important
tasks.
On average, Amazon gets 200 million visitors
monthly. For sellers, such a huge figure translates
to an expansive reach and the opportunity to
considerably boost the customer base. On top of
that, they are all concentrated in one place.
So you do not only get your products in front of
more people, but you also spare yourself from the
hassles of hunting for prime spots for positioning
your ads. Amazon does all the hard work for you.
Improved online visibility
Control over the amount you
spend on advertising
Positions your products in
front of potential buyers
Expansive marketing reach
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7. Because Amazon positions your ads directly in front of
shoppers, the probable returns are quite considerable. But
as seemingly flawless as advertising on Amazon appears, like
everything else, it has downsides too.
The Cons.
8. The Cons.
Compared to Facebook or Google, making
an ad on Amazon can get a little more labor
intensive. If you are pressed for time, you
may find this a disadvantage. Nonetheless,
planning ahead and keeping a timeline helps
resolve the issue.
Getting placements can prove troublesome if your
product does not have many reviews. That aside,
the process of setting up the product display ads
and headline search ads may be a bit awkward.
The schedule and download campaign
reporting is not as highly detailed as what
most advertisers expect. If you want to get
overall performance data, you have to go to
the dashboard and click on each campaign.
This process is tedious, particularly if you
have several products with several ads
running on the platform.
Although it is easy to tell the volume of a keyword
used in an ad, determining the exact percentage
or amount of that volume your ad is receiving is
improbable. The lack of data or transparency in this
aspect makes bidding on and optimizing the right
campaigns challenging.
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9. Sponsored
Products.
The ads are positioned on the
first page of search results and
product pages. Therefore, they are
immediately visible to buyers. You
can avail of this solution if you are
a professional seller, vendor, book
vendor, Kindle Direct Publishing
author, or agency.
The ads connect with potential
buyers directly. They will see them
every time they search for similar
products. Once they click on your
ad, they will be directed to your
page immediately.
10. Sponsored
Brands.
Advertising on Amazon via Sponsored
Brands increases buyers’ awareness of
your brand. It is visible in search results
and you can creatively craft your copy to
convey a strong message, depicting the
image you want for your brand. You can
take advantage of the benefits of this
solution if you are a professional seller
subscribed to Brand Registry, vendor,
book vendor, and agency.
People browsing through Amazon in
search of something to purchase will see
your ad at the top of the page just below
the header. This strategic placement
catches attention as it automatically
makes your brand known to buyers. Upon
clicking your ad, they will be directed to
your page right away.
11. Sponsored
Display Ads.
Amazon has recently introduced this new
advertising option for professional sellers
enrolled in brand registry. Vendors and
agencies with clients who are professional
sellers on Amazon can avail of it too. To
qualify, the products have to fall under
one or more allowed categories while
complying with the restrictions.
Amazon will determine the best audience
for your products based on their
browsing and shopping activities on the
platform. It works for both large and small
businesses. It is advantageous even if you
have limited resources because it allows
you to meet a variety of marketing goals,
ranging from promoting brand awareness
to consideration and conversion. This
way, you get to maximize your budget by
reaching out to your target market both
on and off the platform.
12. How PPC
Works.
+ What You Need to Know : Terms and Guidelines
+ Sponsored Product Ads
+ Sponsored Brand Ads
+ Sponsored Display Ads
02
13. What You Need to Know:
Terms and Guidelines.
This term is used with keywords, category, and
product (ASIN). Advertisers can determine
these aspects during the process of creating
the PPC campaign.
Keywords are terms that advertisers bid on
in their campaigns. Determining the search
terms covered by a keyword depends on the
keyword match type that the buyers used.
The word or group of words that buyers type
inside the box during their search.
These features have three types: Broad, Phrase,
and Exact. Each type necessitates a specific
amount of monitoring and has a unique degree
of precision in ad targeting. All types tell the
extent whereby a keyword matches the search
term that the customer uses. The results serve as
the basis for determining the appearance of an
ad on Amazon.
Targeting Search Term v.s. Keywords
Search Term Keyword Match Types
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14. What You Need to Know:
Terms and Guidelines.
Advertisers can use them for omitting customer
search terms that they do not want in their ad
campaigns. When used the right way, they
become highly useful tools that advertisers can
use for moderating their advertising expenses on
Amazon.
Advertisers can select one of the two choices:
Fixed Bids and Amazon’s Dynamic Bidding
Options. The latter opens advertisers to real-time
bidding adjusted based on conversion potential.
There are two types of campaign: Automatic
and Manual. The results for Manual are more
accurate because as an advertiser, you can pick
the keywords for the ad you want to run. This
privilege affords you with better ad targeting
precision. With an Automatic campaign,
however, Amazon runs the ads for the advertiser.
It instantly matches the ad to all the relevant
search terms for your products.
With this feature, advertisers can aim for Top
of the Search and Product Detail Pages. All that
you have to do is modify your bids (from 0% up
to 900%) for targeted placements.
Negative Keywords/Targeting Dynamic Bidding
Campaign Types Adjust Bids by Placement
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16. Like the other types of ads on Amazon, Sponsored Product works on a pay-
per-click basis. It is the flagship format that is widely used across all categories
on the platform. It directs traffic to your dedicated product listings and makes
buyers aware of your brand through keywords.
Buyers can see them:
+ At the top and the bottom of the pages shown in search results
+ In organic results
+ The product detail pages’ carousel
Whenever customers search on Amazon, the Sponsored Product ads show up
on the first page of the results. Therefore, they see your products right away.
It appears alongside other similar products in the same category. Because your
ad is automatically visible, it promotes brand awareness. This way, your buyers
become instantly aware of your brand and its merits.
What are Sponsored Product Ads?
Where are they located?
How do they work?
17. On Setting
up Your
Sponsored
Product Ads.
Step 1
Step 2
Step 3
Identify the specific products you want to
promote.
Pick the most advantageous keywords that
buyers most likely use during searches,
and determine the amount you can bid for
clicks.
Start your campaign by bidding a small
amount first; then, create the ad for your
chosen product.
18. Advantages of Promoting
via Sponsored Product Ads.
Your new product listings on Amazon get an instant boost in terms
of online visibility. This advantage helps increase sales. Overall,
Sponsored Product ads are indispensable to your Amazon PPC
campaign because:
They show up on almost every page, hence maximizing your
brand’s influence on your customers’ exposure and buying journey.
It is the most widely used type of Amazon PPC ad.
It has a considerable conversion rate of up to 10%.
The ads are visible in organic searches and on
product detail pages.
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19. Disadvantages of
Promoting via
Sponsored
Product Ads.
The popularity of Sponsored
Product ads makes it highly
competitive.
To get placements more easi-
ly, your product needs to have
many reviews.
You need to own the Buy Box
for your ads to show up.
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21. Buyers see Sponsored Brand ads on the search outcomes. They include the logo
of the brand, a dedicated headline, and as many as three of the products in
your line-up. This type of ad promotes brand awareness while showcasing the
products in your portfolio.
Both mobile and desktop buyers can see these ads on any of the following areas:
+ Top of the search results
+ Alongside the search results
+ Within the search results
+ Brand logo – They will be led to either the custom or store landing page.
+ Product – They will be taken to the product page.
Buyers in search of items to purchase get exposed to Sponsored Brand ads. If
they click on the:
What are Sponsored Brand Ads?
Where are they located?
How do they work?
22. On Setting
up Your
Sponsored
Brand Ads.
Step 1
Step 2
Step 3
Step 4
Identify the specific products you
want to promote.
Start making your ad and design it to
your liking.
Pick the most advantageous keywords
that buyers will most likely use during
searches, and determine the amount
you can bid for clicks.
This is the final step when you submit
your ad for Amazon’s review, which
takes place within 72 hours.
24. Advantages of Promoting via
Sponsored Brand Ads.
Similar to Sponsored Product ads, Sponsored Brand makes your brand more visible to
buyers frequenting the platform. Therefore, it also works in increasing brand awareness.
That mentioned, it also provides other advantages:
It allows shoppers with high-
purchase intent to learn about your
brand.
Your customers can engage with
your brand while going through
Amazon.
It helps heighten the demand for
the product, hence increasing the
chance that it will become a best-
seller.
It works particularly well in adver-
tising a newly launched product and
seasonal goods.
It lets advertisers use single keyword
ad groups to make the ads more
specific and aligned with customers’
searches.
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25. These spots are found alongside the bottom of
the search results page as well as on its sides.
Amazon shows ASINs that have high conversion
potential.
These features allow advertisers to use negative
keywords, category, and ASIN targeting for
further boosting campaign benefits.
Additional Placements
Dynamic ASIN Optimizations
Expanded Targeting Strategies
+
+
+
Advantages of Promoting via
Sponsored Brand Ads.
As of 2019, new updates designed for further boosting
campaigns were introduced:
28. Launched in November 2019, Sponsored Display ads provide brands with new and
better access to the platform’s display inventory. It officially replaced Amazon’s
Product Display ads, allowing advertisers to reach their target market on and off
the platform.
Buyers can see them:
+ On the Amazon platform – They appear on all product-related pages,
particularly the product detail page
+ Off the Amazon platform – They show up on apps and third-party websites.
Setting up a display campaign that appears on and off the Amazon platform is
quick and easy with Sponsored Display ads. For optimization, it takes advantage
of technological features such as automation and machine learning. The required
bid depends on conversion potential. Although the bids adjust automatically,
advertisers still have the privilege to change their bids or halt their campaigns
temporarily as they see fit.
What are Sponsored Display Ads?
Where are they located?
How do they work?
29. On Setting
up Your
Sponsored
Display Ads.
Step 1
Step 2
Step 3
Step 4
Identify the specific product or audience
you want to target in your strategy.
Determine your bid and budget for each
day the campaign runs.
Pick the products you want to advertise.
Your ad will start appearing on or off-site
based on your targeting strategy.
30. Advantages of Promoting via
Sponsored Display Ads.
A few clicks are all it takes to design a targeted ad that you
can run to reach your desired audience on and off Amazon.
This type of ad focuses on the product and benefits sellers
through the following:
It allows you to connect with the
ideal type of audience, which are
instantly generated based on their
shopping activities on Amazon.
You can use creative elements that
are automatically generated and
optimized to yield maximum conver-
sions.
No matter how limited your resourc-
es are, it lets you advertise your
complete product catalog.
It promotes brand awareness for
both small and large businesses.
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31. It does not have as many levers
as Amazon DSP (Demand-Side
Platform).
It does not have as many levers
as Amazon DSP (Demand-Side
Platform).
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-
Disadvantages
of Promoting via
Sponsored
Display Ads.
32. The Cost
of PPC.
+ What You Need to Know : Terms and Guidelines
+ Essential Pointers in Planning Your Expenses
+ Drafting Your Budget: A Step-by-Step Guide
03
33. What You Need
to Know: Terms.
These are the number of times your ads
showed up in the search results, which gives
insight into the ad’s reach (number of people
reached).
Indicates how many times your ad was
clicked.
Impressions
Clicks
+
+
34. The amount you pay for each click your
ad receives. The percentage of the sales spent on
advertising.
Method of Calculation:
Amount Spent on Product ÷ Total
Sales Generated from the Ad
In the example below, the amount paid
per click on the ad is 0.625 cents.
Example:
Cost of ad: $50
Number of clicks: 80
CPC = $50 ÷ 80 = 0.625
This is the term for the rate at which the
ads are clicked.
Method of Calculation: Total Clicks ÷
Total Impressions
It specifically refers to the percentage of
viewers of your ad impressions who click
on them.
Cost-per-Click Advertising Cost
of Sales (ACoS)
Click Through Rate
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+
What You Need to
Know: Terms.
35. What You
Need to Know:
Guidelines.
Make a careful and thorough analysis of
your budget—costs (pay for inventories,
employees including yourself, and other
services for your business), revenue (only
from the product you are selling), and profit
margin (the amount of money between costs
and revenue).
Note: Regarding profit margin, you will
benefit from learning how competitive each
product and category is, as well as the
total amount you will receive from the PPC
campaign.
01
Important Pointers on
Planning Expenses for
Amazon PPC Ads
+
36. Observe how competitive the product is as
well as its industry.
Note: The figures can vary accordingly; hence
working backwards from your expected sales
is more ideal. However, there are exceptions
to take note of. They are:
Note: Apply the 25/25 rule done in
reverse. Check out how this works out
through the example provided below.
+ Earnings from product sales the previous
week: $1,000
+ 25% of the $1,000 sales that resulted
directly from the amount you spent on PPC:
$250
+ Anticipated (determined during the PPC
planning stages) amount of sales from PPC
campaign: $250
+ Advertising Cost of Services (ACoS [25%
of the Anticipated amount of sales from PPC
campaign]): $62.50
+ Competitive Category – Some product
categories are more competitive than
others.
+ Unique Identifiers - Narrow down your
keyword research as much as possible to
help distinguish your brand while improving
the focus and efficiency of your PPC.
02
Important Pointers on Planning
Expenses for Amazon PPC Ads.
37. 01
02
03
Determine the ideal amount you can
afford to spend (ACoS).
Determine Budget Allocation, which
includes average daily budget and
fixed daily account, for each ad
campaign.
Find out the amount you can set as
your default bid.
Drafting Your
Budget: A Step-
by-Step Guide.
38. 01
Determine the ideal
amount you can afford to
spend (ACoS).
Set an exact amount in mind that will allow you to easily
launch an effective campaign without compromising your
profits.
Example:
Let us say that you are selling eye creams for $25 each.
Selling Price: $25 (per jar)
Cost of Buying the Product: $4 (per jar)
Amazon FBA Fees: $10
Miscellaneous: $3
Profit = Selling Price – (Cost of Buying the Product + FBA
fees +Miscellaneous)
Profit: $8 (This figure indicates the amount you can spend
on advertising without compromising your profit.)
ACoS=Profit ÷ Selling Price ($8 ÷ $25)
ACoS: 32%
Important Note: Spending more than the indicated
percentage for ACoS can negatively impact your profits. As
a rule, experts advise to keep ACoS initially at 30-35%. You
can monitor these details on your SellerApp dashboard.
39. 02
Determine Budget Allocation, which
includes average daily budget and fixed
daily account, for each ad campaign.
Calculation of daily budget for every ad campaign is done
over the calendar month using this formula:
Maximum Expenditure per Calendar Month = Daily Budget
x Number of Remaining Days in the Calendar Month
Note: It is advisable not to use up the entire average daily
budget allotted for a certain day, so that the remainder can
still be used for the following days.
Fixed Daily Budget - You can set this for your overall
advertising account. It sets a specific limit on your day-to-
day advertising for your Sponsored Products Account.
Note:It is not advisable to put a specific fixed limit on your
advertising budget at the account level. If your campaigns
turn out to be profitable, setting a limit means you may not
be able to continue once you have reached your limit, which
may compromise your sales.
40. 03
Find out the amount you can set
as your default bid.
Default Bid – This is how much you will be bidding for the
keywords that you want your ads to rank. You will pay this
every time a user clicks on your ad.
How to Calculate Your Default Bid
1. Know what your ACoS is. For example, your ACoS is
35%, which means that you will not spend more than 35%
of your sales in advertising.
2. Find out what your conversion rate is. For example,
your conversion rate is 10%. This means that 1 out of every
10 clicks you get converts to sales.
3. Divide your ACoS by the number of clicks your ad
receives.
Default Bid = 35 (ACoS) ÷ 10 (clicks)
Default Bid = 3.5%
This means that you should not bid more than 3.5% of
your sales for each click your ad receives.
41. How to Calculate Your Default Bid to Improve Your
Chances of Winning
Note: For this calculation, you need to take a bold
move by adding 20-30% to your default bid.
Formula:
Default Bid = ACos x Selling Price x Conversion Rate
Example:
ACoS = 35%
Selling Price = $20
Conversion Rate = 10%
Default Bid = 35% x $20 x 10%
Default Bid = $0.7 (per click for your keyword)
Important Reminders:
Your ACoS can be more than 30% given that your profit
margin is higher, which allows you to become more
aggressive in marketing your products.
It is important to know your conversion rate, so you
can calculate your default bid precisely.
Three Ways to Lower ACoS on Amazon
1. Do keyword research frequently and implement
insights immediately.
2. Do Amazon PPC cost estimation process to get
an idea on how much you can spend on bidding on a
specific keyword.
3. Analyze trends by always reviewing your performance
on your performance dashboard.
