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Amazon PPC Optimization: What Is Your Ranking Strategy?

Amazon Basics / August 16, 2021

Your goal for any given PPC campaign boils down to “increase profits,” and each PPC campaign can achieve that goal in a different way: by driving organic traffic, making your brand more visible, and so-on. Focusing on a solid Amazon PPC optimization ranking strategy is a straightforward way to achieve a greater profit margin by reducing advertising costs and improving the performance of exact match keywords

Organizing the Data

Enter the Targeting section of the ad group you wish to optimize.  Here, you’ll see a graph followed by a table showing the data from your keywords. The graph is useful for a quick glance at your campaign’s performance, but for the purposes of optimizing your Amazon PPC ranking strategy, focus on the data table.

Use the ‘Columns’ dropdown menu to make sure you have the following columns visible: Keyword, Match Type, Suggested bid, Bid, Spend, Orders, and ACOS. For now, we’re only interested in exact match keywords.

Note that Spend, Orders, Sales, and ACOS reflect the data specific to your chosen date range. The default is Lifetime. If you narrow the date range to a month, you’ll only see data for that month. For now, make sure the date range is Lifetime.

Amazon PPC Campaign Optimization

Amazon PPC Optimization Ranking Strategy

Some keywords, however relevant they may be to your product and business, simply do not perform well for the purposes of PPC ads in Amazon’s environment. If you built your initial Amazon PPC ranking strategy using keywords from a Google ads campaign, for example, you’re likely to have several of these low-performing keywords in your list.

Don’t worry about getting the perfect keyword list right out of the gate. The most important step of the process of optimizing is getting started. You need data to make decisions, and you get data by running a campaign. One or two weeks’ worth of data from about 50 keywords is enough to begin optimization.

So, what are we looking for? In short, we want to find keywords that have a low ACOS percentage or advertising cost of sale. This is the average amount of money you spend in PPC costs to generate a sale for each keyword. Your ACOS increases when the keyword performs poorly and decreases when the keyword performs well. Note that in this case, we measure performance exclusively in direct profits. Evaluating ACOS becomes more difficult when considering other effects of advertising, like improving organic traffic.

Cull your Dead Keywords

The quickest and simplest way to improve your Amazon PPC ranking strategy is by looking at keywords that have had enough time to prove themselves and simply haven’t.

Sort your keyword table by Spend, from greatest to least. Decide how much money you’re willing to risk in the process of identifying profitable keywords – $10 is suitable for most products. Locate a keyword that meets or exceeds that amount of money AND has zero Orders. Notice that the ACOS column is blank for these entries because they haven’t generated any sales.

This means that you’ve had enough clicks to spend $10, but none of those clicks resulted in an order. If your ‘Lifetime’ range represents at least a month of data, this is a clear indication that the keyword isn’t viable for your products, your brand, or the Amazon environment in general. Toggle the button under the ‘Active’ column to deactivate these dead keywords.

Compare Weeks to Lifetime

Once you’ve removed the low-hanging fruit, take a closer look by comparing weekly data to lifetime data. To start, set your date range to the past week. Don’t use a range that includes data from yesterday and the day before, because Amazon can take a few days to process information from sales. You can also choose to use the most recent actual full week for easier comparison, which is particularly useful for campaigns with many months of data.

Remember that your Spend, Orders, Sales, and ACOS reflect the date range that you’ve selected. In this view, sort by descending ACOS to identify products that have high amounts of Spend with little Sales in return. Identify keywords with an ACOS of 35% or more – we will consider decreasing the bid for these keywords.

Dropping your bid for a keyword will reduce the frequency at which it generates clicks, and by extension, how many of those clicks become orders. This typically means it’s competing less with PPC campaigns that have higher bids. Your goal in this process is to reduce the bid amount until it stops decreasing the ACOS while still generating orders to optimize your profits.

Once you’ve identified a keyword that needs to be optimized, note its weekly ACOS and find it again in your lifetime date range. If it has performed well over its lifetime, you can keep it as-is and evaluate it more over the coming weeks. If its lifetime ACOS is also high, drop the bid amount by the same percentage that you wish to see the ACOS drop. For example, if a keyword has 50% ACOS, drop the bid by 15% to move it closer to your goal of 35%. Continue doing this every week as necessary

When a week’s ACOS is high, but the lifetime ACOS is low, you should look for an upward trend in ACOS to determine whether or not to take action. This means that the keyword has steadily decreased in performance. If you can identify a reason why this happened – such as a keyword that performed better in the summer – you can look for patterns in your data and choose when to keep it active. If there’s no clear reason, it may just be that the keyword is no longer relevant.

You’ll find the greatest returns by optimizing keywords with very high ACOS. Optimizing below 35% will yield greater profits, but with greater difficulty. Lastly, remember that lower bids make your products and brands less visible, so aiming for the minimum possible ACOS may not always be right for your overall strategy.

More Helpful Articles:

Advanced Amazon PPC Strategies And Tips

Amazon Advanced PPC Strategies with Mina Elias from PPC University

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