When you really think about it, dating is actually fairly comparable to selling products on Amazon, particularly if you are a new seller. When you are seeking to find companionship, you go into the process pretty much knowing that you’ll have to work hard at first to find it. In other words, you’ll really have to “sell yourself” to convince a potential suitor of your worth. (No, we don’t mean literally. That’s an entirely different business).
The point is you may be amazing – compassionate, funny, hard-working, trustworthy – but you can’t just tell a prospective date this. You have to prove it which might mean having to spend a little dough to showcase what a catch you are. We didn’t say that was fair, but that’s the world we live in. And it’s really no different than selling a product.
See, we get a lot of clients that gripe about how autocratic Amazon’s marketplace is, going into defense mode when their listing isn’t doing well. “But it’s an amazing product! It has all of these amazing features and benefits that differentiate us from our competitors!”
Look, we believe you, just like we believe Adriana’s dating profile that swears she doesn’t put out on the first date.
But seriously, we get it. Amazon’s pay-to-play platform offers a glaring advantage to big businesses, aggregators, and Amazon itself, making it seemingly impossible for SMB’s to fight the good fight and succeed. And while you should definitely invest in omnichannel resources to expand your audience base, the reality is that if you are selling on Amazon’s marketplace, you almost definitely will have to spend money on PPC in order to grab the attention of appreciative “suitors.”
Do I have PPC for my Amazon store? Can’t I just drive external traffic instead?
The short answer to that question is no, with a few caveats. Driving traffic to Amazon through omnichannel marketing funnels is a great way to expand your reach and choose advertising methods that may not cost you as much. However, you will probably ALWAYS have to run PPC and this is particularly true if you are preparing for a product launch. Driving sales from outside sources doesn’t necessarily influence your ranking on particular keywords unless you are utilizing 2-step URLs. Which is why, if you are going to use outside platforms, you still need to run PPC campaigns.
Why? Because customers don’t know that you exist unless you put yourself out there (much like if you stayed at home while simultaneously trying to find “the one”).
When you first start on Amazon, you aren’t going to rank for your targeted keywords, so potential buyers have to find your product without you organically showing up on the first 3 search results pages. So the only way to effectively put your product in view of potential buyers is to bid on certain placements such as Top-of-Search.
PPC might be costly… but it’s more costly not to use it
Undoubtedly, the ability to achieve prime real estate on Amazon’s search results pages is expensive, depending on where you want to show up.
What do the PPC numbers tell us?
On average, the CPC (cost per click) hovers around 97 cents and the number of daily clicks per listing averages 374. But keep in mind that this is generally for listings that have established a history. New sellers probably shouldn’t expect that high of CTRs.
According to Smart Insights, the 0.36% CTR (click through rate) is lower than Google Ads but better than the overall display ad rate of 0.05%. But as we all know, while high CTR is a good metric on Amazon, if those click-throughs don’t result in high conversions, it could actually shun your chance at ranking well.
The PPC conversion rate of 9.47% on Amazon is staggering when compared to the conversion rate of most websites and marketplace which (in comparison) offers a measly 1.33%. This equates to 35 conversions per day for the average Amazon seller. That’s a daily revenue of about $1,050.
And while good sales numbers is the ambition of all merchants as it helps with ranking, revenue won’t help unless the margins are high and ad spend per sale (ACOS) remains low. This is near impossible to achieve during a launch
The average seller spends roughly $381 per day on Amazon ads and keyword bids, with an average ACOS of 34.42%. An appreciable ACoS falls in the 15% range. However, neither of these ACoS metrics should you expect when you are just starting off on the infamous platform. Why? Because you haven’t achieved social proof. Ratings and reviews are generally the two indicators as to whether someone will follow through with a purchase. And when you are just launching a product, your CTR tends to be high with very low conversions which adds to very high ACoS spend. But don’t panic! This number should go down once you collect more social proof and customers can feel they can trust your product.
But even when listings start ranking, generating more sales and capturing more reviews, this doesn’t automatically mean your ACoS will drop.
How to properly set up PPC when you are launching your product
The key to creating effective PPC campaigns that help you rank is not just a matter of advertising; it’s all in the optimization of your listing. This is for two reasons:
1) If your actual listing is not providing the customers with an amazing buying experience, then a click-through will not turn into a buy which will negatively influence your rank.
2) Your listing has to have keyword phrases that are directly relevant to the category and browse node you are in. PPC auto campaigns determine relevancy based on the keywords in your listing, so you won’t get helpful results from your auto campaigns unless your listing is search engine optimized.
Here are some helpful tips on ensuring that your PPC campaigns will drive the results and traffic you are looking for.
- The title in your listing should contain 2-3 keyword phrases that you are vying for with the #1 targeted keyword being in the first 80 characters and the title including one long-tail keyword
- You should bid on exact match, phrase match, and broad match with the most money going toward exact match. You should also turn on your auto campaigns (using the least amount of allocated money) as a means to collect more information for you to run new campaigns down the road
- Test automatic and manual keyword targeting to check what is suitable for your brand.
- Perform detailed keyword research focusing both on related keywords and competitor products.
- Run ad campaigns for at least two weeks before running reports and making adjustments.
- Continue reviewing your ad reports once a week, subtracting, adding, and adjusting keywords as needed.
- Once your main keyword starts generating 50 sales or more, you’re ranking well (organically) for that keyword, and your BSR has significantly dropped, you can think about rotating keywords from your PPC that have converted well so that your listing starts generating sales for new keywords.
How to Use Amazon PPC Results to Optimize Your Listings
PPC plays an important role in your products ranking which results in better sales. But, did you know that you can also use the results from your PPC to optimize your listings on Amazon?
Using the keywords and search terms generated from PPC is one of the most effective ways to boost product visibility, sales, and rank while also allowing you to spend less on PPC. But adding high-converting PPC results back into your listing isn’t as easy as it sounds. For example, some terms that are highly-converting may not be highly relevant to your product and your browse node. If you add such phrases back into your listing, this strategy may decrease your relativity score and influence your ranking or BSR.
Finding the right keywords involves research and trial and error. The search term results gathered from Amazon PPC reports can help you find the most profitable keywords with a high search volume, less competition rate, and high relevancy. There are useful, third-party tools that can help maximize your results during launch. However, utilizing the results from your Ads is one of the best, most direct methods to help you organically rank.
With PPC results and reports, you can identify which of the top search terms should be placed back into your listing. Be forewarned though that search term results may include competitor branded terms that cannot be incorporated into your listing, but rather can be executed in PPC bidding.
How PPC can help your organically rank for your targeted keywords
Upon extracting keywords from your PPC, it is important to use them intelligently and effectively in your listing. Using keyword relevancy is an important step and it requires you to make sure that the most relevant, high search volume keywords have a prominent place in your listing’s title or bullet points in exact-phrase.
Allocate time every 1-3 months to go through your campaigns. Find new, highly-converting, and relative keyword phrases and weave them back into your listing. But you have to be very methodical in how you go about this process because you don’t want to lose the real estate on keywords you are already ranking well for.
For example, say you’re selling baby diaper bags and your original title is:
(Company Name) Waterproof Baby Diaper Bags – Durable with Adjustable Straps for A Comfortable Fit – Diaper Bag with Changing Station for New Moms
You start making significant sales on “waterproof baby diaper bags” through both PPC and organic search. Soon, you’re on the first page for that keyword phrase. If you want to decrease bid-spend on this phrase and target a new keyword, like “Unisex Diaper Bags” because your PPC results are telling you that it’s a highly-searched, highly-converting keyword phrase, you may want to change your title to:
(Company Name) Unisex Diaper Bags – Durable and Adjustable Straps – Waterproof Diaper Bags with Changing Station for New Moms
We simply moved some keyword phrases around with Unisex Diaper Bags being in the #1 position.
When keywords that convert well through ads are fed back into the listing, it causes a positive reinforcement loop, causing Amazon to recognize and associate those keywords as being relevant to that product. This is the condition that people refer to as the “flywheel effect”.
So, investing in PPC is worth it?
Yes, Amazon PPC is totally worth it and it’s the number one way to increase traffic to your product. If you are thinking of selling on Amazon without PPC, shift the way you think. While it may be expensive, it also single-handedly is the best way to be found on Amazon’s search pages.
What makes Amazon so effective is that people that are on the site are ready to buy. Amazon is at the end of the buying funnel, unlike, say, Instagram where people aren’t on that platform to buy so they aren’t in a buyer’s mindset when they see an ad.
In 2016, Bloomreach reported that 55% of consumers begin their search on Amazon when making a purchase. Amazon has over 2.3 billion visitors each month. All you have to do is get their attention. And the best way to accomplish this is showing up on the first few pages of SERPs, whether it be organically or via sponsored ads.
Many people ask us what is a reasonable amount of money to spend on PPC ads each day, but it’s important to remember that the cost is not set in stone. The spend will be determined by the competition.
If you’re competing for highly competitive keywords, expect to pay more for the words and where you show up on SERPs. It will undoubtedly lead to a bidding wars, driving up the costs. Depending on your product, category, and budget, your spend may rise above average due to multiple companies bidding for certain ad placements on those same keywords. As we stated before, it’s certainly a pay-to-play platform.
The only way to circumvent some of these expenses is to utilize your PPC results wisely. Instead of continually paying high amounts for ads, try updating your listing every so often by implementing converting PPC terms back into your listing. Just remember to do this slowly, as too much change can reindex your entire listing.
And yes, just like in dating, being new on Amazon can be expensive. You have to budget for that. But you will get the results you want if you are well optimized and you appropriate PPC data to optimize your listing even more.