Amazon PPC Advertising - Three Strategies for Setting it up

Peter Jones • 12 August 2024

One common trend with all tech companies is that they offer some form of advertising platform to their users, and Amazon ads is no different in the Amazon marketplace. You may have wondered why your product sales are not as good as your competitors despite your product being better in price and quality. The secret rests with PPC on Amazon or in 'Pay Per Click' on Amazon. But what is PPC and how can you target shoppers and boost sales on your Amazon seller account? As an industry-leading Amazon marketing agency, we take you through the essential strategies you must know when setting up PPC on Amazon so that you can stay one step ahead of your competitors.

Amazon PPC campaigns are designed for sellers to help increase their product visibility and boost sales. The seller or advertiser normally pays a fee to Amazon when a potential buyer clicks on their advert. Because the payment happens only after each click, it is appropriately named as 'pay per click' or 'PPC'. To be successful and get the best ROI on advertising, it is important for Amazon sellers to create, execute and manage Amazon PPC ads campaigns with care. In the long-run, running a successful PPC campaign could lead to improved organic results allowing you to cut down the expenses on advertising and even expand sales on other targeted items in your inventory.

Below in this blog, we explore the three strategies further for setting up Amazon PPC ads and selling products on Amazon, including the types of PPC campaigns / PPC work.

Different Types of Ads - PPC on Amazon

Generally, as with most ecommerce platforms, there are multiple advertising options, and so there different types of PPC campaigns to choose from depending on budget, target market and product requirements. Amazon offers three options / ad types for sellers to advertise their products on the marketplace. Amazon PPC Ads are:

1. Sponsored Brand Ads - Amazon Ads

Brand ads: With Amazon sponsored brands - This advertising route is aimed at boosting your brand's visibility within the Amazon store. Prominently displayed, rich display and video creatives / creative ads are designed to capture your audience's attention and showcase your brand and products prominently.

2. Sponsored Products Ads - Amazon Ads

Products ads: These are cost-per-click (CPC) adverts that are designed to promote individual product listings on Amazon, as well as on certain premium websites and apps. Even if you have no prior advertising experience, you can set up a products campaign in just a few minutes.

3. Display Ads Sponsored - Amazon Ads

These are display adverts / display ads available to businesses, whether they operate within the Amazon store or not. Leveraging machine-learning with different formats available, sponsored display ads enables businesses to reach their customers throughout the Amazon store and on other apps and websites.

For the type of Amazon ad required, always check Amazon policies and restrictions. It is always recommended that you follow all the crucial steps Amazon recommends to achieve the targets of your campaign.

The Strategies You Must Not Miss When Setting up Amazon PPC Advertising

In advertising, be it online or on the high street, anc advert should speak out to the potential buyer in a compelling way. That is when brand awareness is born and viewers become paying customers. PPC on Amazon is no different from this age-old marketing strategy, but you may need a hand from an experienced Amazon marketing agency, like Kangaroo UK, to help reach your goals. Let's focus on the fundamental strategies you should follow when setting up PPC advertising on Amazon.

1. Define Your Objectives

Having a clear objective is vital for any PPC ad campaign. As a seller on Amazon or a brand manager for a seller, you need to ask yourself - what am I trying to achieve with PPC advertising? What is my Amazon PPC strategy? On Amazon, goals can be two-fold. The first is to increase sales and the second is to boost product and brand awareness.

If you feel you need to go on an aggressively successful sales campaign, then you need to sit down and do some keyword research. As a seller on Amazon, you will need to have an in-depth understanding of the best keywords, having used a keyword research tool, together with another list of negative keywords for different products. Keyword performance, click-through rate and conversion rate are a few factors you should investigate before setting up PPC campaigns on Amazon. One other key benefit of this marketing strategy is that when you have your keywords organised properly within your campaign, it will also help you in the long-term to reach a better organic ranking.

If your objective is to increase brand awareness, you will need to maximise the number of times your product becomes visible in the search results. In other words, the number of impressions on the search page is vital to raise awareness to searchers who use specific keywords. There are multiple ways to minimise the cost per appearance and click, and you will need specialist PPC advice to get the best out of your marketing and advertising budget.

2. Set a Clear Budget

A realistic budget is essential to achieve the results you wish and keep the initial costs down. There is a delicate balance between spending too much on your ad and spending too little. Either extreme will not give you lasting results because you will not be able to manage your overall business needs in the short and long-term in a sustainable way.

As a rule of thumb, ad spend on Amazon is considered excessive if it affects your profit margin and exceeds 20 per cent of the Amazon sales income. This is called the advertising cost of sale or ACOS advertising cost and you can calculate it as given in this example. Say the item sold for £100 and you spent £15 on ads. Your advertising cost of sales would be 15% of the sales income.

Therefore, you must set a daily limit on your ad spend, considering the cost per click, because failure to do so could land you a mammoth bill that would ruin your progress! In an ideal scenario, you should always be conservative by trying to keep your cost of ad sales below your target margin. To illustrate with an example, if you buy your product for £5 and spend (purchase) another £5 on fees (FBA), shipping and other costs, the total cost of your product will be £10. If you sell your product for £20, you need to make sure your Amazon PPC cost spend will be less than £10 for that product. The reason being, if you spend above the £10 profit margin, the purpose of advertising defeats the purpose of selling at profit. The key to success is to advertise and sell without making a loss.

3. Optimise Listing Before the PPC Campaign

Before you set your ad campaign live, you must optimise your product listing to Amazon's search requirements. Without a clear optimising strategy, your ad will not be able to bring the results you wish for.

Optimisation of keywords, including keyword targeting, should be the primary focus before you begin PPC on Amazon. Review each search term on the relevant product pages . The product details should contain all the relevant keywords to give it the best chance of appearing on the product listing page following the search term used. You may need to consult a professional Amazon marketing agency to get expert advice if you are not sure how to focus on keywords and optimisation.

The second is to optimise the content of your product listing. From relevant images to catchy product descriptions, you need to make sure your items appeal to Amazon's search bot as well as the Amazon customers / Amazon shoppers searching for products.

Final Thoughts

Amazon provides a variety of PPC advertising options tailored to meet diverse business needs and goals. Sponsored brands elevate brand visibility through rich display and video creatives, while sponsored products offer straightforward cost-per-click ads for individual product promotion across Amazon and other platforms. Sponsored display extends reach on Amazon and beyond, leveraging machine-learning for effective multi-format ads across various apps and websites. These are all aimed at potential customers.

As you have seen above, there are three main strategies you must consider when setting up an Amazon PPC advertising campaign. It's also crucial to adhere to Amazon's policies and guidelines while executing PPC campaigns. Clear objectives, comprehensive keyword research, using the Amazon keyword research tool for example, and strategic budgeting are fundamental for achieving campaign success. Whether aiming to boost sales / revenue or enhance brand awareness, optimising product listings and seeking expert guidance can maximise PPC effectiveness on Amazon, ensuring sustainable growth, sales and profitability. Your success will ultimately depend on your research, understanding of the platform's requirements and how you execute them.

For further guidance on navigating Amazon's advertising landscape, consider consulting with an experienced Amazon marketing agency like Kangaroo UK to tailor strategies that align with your business objectives and drive impactful results.

Why Brands Hire an Amazon Agency Like Kangaroo UK?

At Kangaroo UK, we have been specialising as an Amazon marketing agency for many years and have helped sellers around the world to succeed. In case all of this sounds rather complicated, we are here to help you, so you can succeed.

Often brands of various sizes approach us when they face challenges, including poor ad performance, failing to appear in Amazon shopping results amongst other things. They find themselves spending excessive time resolving issues and becoming frustrated with the lack of support from Amazon. These brands frequently struggle to implement simple changes, leading to stagnating sales or even declining sales. Many times, poorly executed advertising campaigns fail to generate profit due to high ACOS and low ROAS, placing significant strain on their time and financial resources.

However, there's no need to worry. As a full-service AMZ agency / expert amazon PPC agency, with years of experience, we specialise in resolving issues that hinder your success on Amazon, ultimately revitalising your ad campaign / struggling accounts and your ecommerce business. Whether you're struggling with ineffective advertising campaigns, stagnant sales, or unclear strategies, or are looking for a campaign manager, we have a proven track record of driving results.

Contact us today to discuss your challenges and goals, and to see if we can assist you in achieving your Amazon sales advertising objectives effectively.

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