Amazon PPC for Beginners
What Is PPC Advertising on Amazon?
Dustin and Kris discuss the basics of Amazon PPC and how to get started advertising your products on Amazon.
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What is PPC Advertising on Amazon?
– Hello everyone, and welcome to episode eight of “Two Amazon Sellers and a Microphone”. I’m Dustin Kane. And with me as always, is Kris Gramlich. Kris, how are you doing
– Good Dustin. Good to be with you again.
– Yep. Excited today to be talking about “PPC Advertising on Amazon”, this will be a fun topic. We’re gonna try to just cover the basics. Sort of explaining what it is, how it works. If you’re just now starting to sell on Amazon you’re gonna have to enter this world of pay-per-click advertising and it can be wild and it can be overwhelming too, to a lot of new sellers of all this stuff. So we’re gonna try to really break down just the main components of what it is, how it works, and just a few tips on quickly getting yourself set up with your first couple of campaigns. So Kris, let’s dive in. This will be a lot of fun.
– For sure.
– We’ve both you and I have spent a lot of time in Amazon’s advertising campaign manager over the last year years. And we’ve learned a lot obviously on what to do just sort of best practices. And also we talked to Amazon sellers every day and our roles with Sellozo helping people that are struggling with their advertising and looking for support as well. So, let’s dive in and just give a general overview. Kris, why don’t you just give a brief explanation of what pay-per-click advertising means.
– For sure. Well, it stands for pay-per-click and it’s ads that you run on your products that show up on Amazon search results and you know what you’re doing. You’re targeting keywords that you want your product to show up for when a customer goes in and types it into Amazon search bar. But before that there’s two different types there’s a seller central account and then our vendor central account. Like 90% of the people we talk to have seller central accounts. So it works in both areas, but in seller central, what you’re doing is you just set up an ad campaign and there’s different types there. We can break it down here in a minute, but basically what you’re doing is you’re advertising your product on Amazon’s platform so that it gets discovered so you start generating sales. So you start getting that Amazon flywheel going.
– Exactly, so I think to even break it down more what’s happening is if I was a customer going to Amazon and I type up in the search bar dog leash and hit search, then the word that I typed in is the keyword or the search term. So at the top of that search, you’re going to see two or three or four products that just look like the regular products that are on that are throughout the whole listing. In the product that you see, it’ll say sponsored. And that means that that brand or business is paying to be in that spot. They’re bidding on that keyword and their bid one. So, basically every time somebody searches Amazon’s doing an auction in the background of all the people who are bidding on those ad spots. So there’s a lot that you have to break down to determine what keywords you’re wanting to bid on. And then what do you bid for each keyword. And we’ll talk about how you can set up campaigns where Amazon basically does that for you, which is called automatic targeting. And then you have other campaigns that are called manual targeting campaigns. But what we’re talking about here where you’re putting your product at the top of the search for specific keywords is called sponsored product ads on Amazon. So you don’t have to create, you don’t have to make any sort of creative. It’s just your listing showing up at the top of the search or any section where Amazon offers those sponsored spaces.
– And there’s it’s all mentioned in a bidding system. So if you wanna get to the top of the search you’re gonna have to have a higher bid or explain to show Amazon that you’re willing to pay more on a cost-per-click to take that spot over. And there’s ways to do that and Sellozo is one of them where we automate this process so that you don’t have to constantly update your bids. Our software will do that for you automatically so that you get to that top of the search, or you can set it to the top of search at least start to generate more sales through here. Now, this is definitely be prepared like on stuff like this, to go in the red for a little bit. This is something where you’re gonna invest money. But what you’re doing is you’re trying to improve your ranking for that keyword. Because the whole point is to be on page one for the keywords you’re targeting. So you will invest some money here on ads. And this is our game like we talked about it in previous episodes where your listing is super powerful. Like you wanna make sure your listing has all that stuff that we touched on in our previous episode because this is gonna help your ads perform better.
– Exactly. So I think to dive in even further what happens is you’re not getting charged when your ad shows you’re only getting charged when somebody clicks on your product and then goes actually to your product page, that’s why it’s called pay-per-click. You’re only paying for the clicks. So then what you have to evaluate is you will see certain keywords where they get clicked a lot and don’t convert to sales and you’ll see some keywords where they convert really well to sales. And so then you have to make the decision on what you’re gonna do with the bids on those particular keywords. A metric that gets thrown around a lot and what’s shown in your campaign manager in Amazon is ACoS. So A-C-o-S and that’s your advertising cost of sales. And so that’s actually the ad spend that you’ve spent divided by the total revenue that you’ve created from ads. So that’s a good measure to determine if you’re profitable on certain keywords. So that’s something you’re gonna be looking at quite a bit. Real quick Kris, let’s talk. So we’re talking about sponsored products but there’s also sponsored brand. Advertising that’s a little different. So you wanna talk about where that shows up and what you have to do to set up a sponsored brand.
– So that’s a different type of campaign structure. When you go to set up a campaign, you’ll have a product or sponsored brand. A sponsored brand allows you to do like a headline ad at the top of the keywords you’re targeting. They used to call them headline search ads but they then changed them. But what this is, this allows you to kind of showcase all the products that you have to offer for that search. So, we’re looking at dog brush here. When I click on this ad on dog brush it will take me to this brand’s page where I can see all of their dog brushes, not just one or two. Whereas sponsored product ads they’re just product-based individual products only. A sponsored brand allows you to showcase more of your products, which hopefully it helps with your conversion rate. You kind of get maybe more than one sale there, but it gives you kind of authority for that keyword you’re targeting.
– Exactly. All right, let’s talk about the different types of campaigns that you can set up. So we talked, there’s an automatic targeting campaign and a manual targeting campaign. So Kris, what’s the difference between auto-targeting and manual targeting?
– Good question. So we get this a lot too. Auto campaigns are campaigns that Amazon controls where your product shows up at. So Amazon’s gonna kind of scrape your listing and they’re gonna see what keywords that are in your titles, your bullets, your description that are relative to the customer searches. So again, this goes back to the listing that we talked about in the previous episode where you wanna make sure all your keywords are in there because Amazon is gonna use this data when you start running ads for that product. So, an automatic campaign is when Amazon controls where your product shows up based on how your listing is optimized. Manual campaigns are where you provide keywords to Amazon. So you come to the table with a list of keywords and you’re like, Amazon I’m gonna bid on these keywords. And your bid is again what you’re willing to pay on a cost-per-click. But these are keywords that you provide to Amazon and that you wanna bid on. To get these keywords you can use the Amazon search bar. We talked about a few free tools and our past episodes that you can get keywords from. You can do some Reverse ASIN searches on your competitors, but you wanna probably have anywhere from like 15 to 20 that you really wanna target. And then you can set up a separate campaign and a manual campaign where you maybe have more long-tail keywords that you can focus on. And there’s different types of campaign match types that you can do. But we’ll touch on that here in a second as well.
– Sure, thanks for the explanation, Kris. So let’s talk about now what are the pros and cons to each type of campaign? So an automat, I’ll start with the auto campaign. The pro to the auto campaign is the convenience. You turn it on and Amazon will start showing it for all kinds of keywords and it’ll show it in lots of places. A keyword can also be a competitor’s product page. So that’s the list, the ASIN which is their product identifier is the actual keyword. And so your product will show up on their product page as well. So when you set up an automatic campaign, the benefit is it’s super fast. You just turn it on and go. The negative is you can’t control the bid at the keyword level. You have a master bid that you have at the campaign ad group level. So there’s a lot of inefficient spending and potentially misallocated. It could be you’re not bidding high enough for certain words. And it’s too much, it’s overbidding on others. So there can be some real inefficiencies there as well as there can be a lot of search terms that Amazon is showing your ad for that, for some reason pick the customer’s interest enough for them to click it. But it’s just different enough from what they’re searching for that if they don’t convert then you waste a lot of money on those. And so unless you’re really maintaining and managing your automatic campaign with negative keywords, which we’ll talk about later, then that’s negative is it can be wasted and inefficient and missed opportunities on your ad spend. Why don’t you talk about now for the manual campaign? What are the pros and cons for the manual targeting campaign?
– For sure, but just kind of touch on that in the manual you control, which keywords you show up for, and you control the bids on each individual keyword. To Dustin’s point in the auto campaign, it’s one bid one campaign, and everything gets the same bid. So you could be like you mentioned, you could be bidding on something that doesn’t give you any conversion and you’re just wasting money. I like for the manual. That’s the pro is that you control what your product shows up for and you control the bid on each individual keyword. Amazon doesn’t, you know, show you differently. You’re gonna dictate how your product shows up based on how aggressive your bid is for the keywords you’re targeting. I’m on my screen here. You can see that, and for those of you listening, all I’ve done is typed in dog brush in the search bar and hit the space button. And then I get a list of keywords that Amazon or search terms that Amazon is suggesting that other people have used when looking up for a dog brush. So there’s a dog brush for shedding short hair, shedding for long hair. Like all these would give you good keywords that you could target in a manual campaign and then you can control the bid on those. So that’s the probe manual is that you get more control of the ad.
– And let’s talk about the bid itself and why it changes per keyword or search term is you typed in initially dog brush. Dog brush is very, very broad. If I’m a dog owner and I’m looking for a brush, there’s so many variations, is it a huge brush? Is it a small brush? What’s the point of the brush? There’s those. Dog brushes is a term that gets searched a lot but it’s broad. So to bid on that keyword is going to be more expensive. There’s gonna be a lot of competition for that keyword. So if you have a 50 cent bid your ad may not show hardly at all. You might be outbid and you’re showing up your ad is showing up on page four of the search results. And so you’re not winning enough, but it may also be that’s a keyword you don’t want to bid on because it can be, you might be wasting money. Conversely, if you have those longer tail keywords which long-tail means, there’s a lot of words in it. So you had the brush, the dog brush for short hair.
– Shedding, short hair, yeah.
– Shedding, short hair, okay. Much more specific, much more targeted that bid you’re gonna be able to show your ad for that keyword for cheaper than just the word dog brush does mean less competition potentially on that keyword. And so, that’s why it’s important to be able to be adjusting those bids at the keyword level and ideally down the road, when you get it when you’re really trying to optimize your campaigns you’re trying to find the sweet spot on every keyword where you are showing the ad it is generating sales and it’s profitable. So that’s what you’re really going after but I think there’s a lot of confusion at times on those bids and why it’s important for there to be different bids on different keywords. I also feel like there’s confusion when people set up an automatic campaign all they’re hearing is the automatic part and they think that it’s automatically doing everything that you would need to make that a campaign successful. And that it’s not true. The only thing that is automatic about an automatic targeting campaign is it’s automatically finding search terms to show your ad for it.
– That’s it.
– That’s it Yeah. It’s not changing your bid. It’s not making negative keywords for you. It’s not doing any of that stuff. It’s just a campaign that Amazon runs and shows up your product based on the listing. There’s more to it than just running an automatic.
– All right. So let’s say now somebody has these campaigns set up, they’re running these campaigns and it’s their first time they’ve been doing it for a week, or let’s say they just set up an automatic targeting campaign for their product. And it’s been running for a while now, and they’re looking at it and they see their ACoS is kind of high 50, 60%, maybe higher. And they’re concerned just real quick. I think we could wrap it up by just saying, what are the steps that you what are some basic steps you would take to start optimizing your campaigns?
– First one be patient. A lot of people will launch a campaign today and then come in tomorrow and start making changes to it. And there’s just not enough data yet. So, my first recommendation is to be patient. Don’t get all scared that your cost is high, especially at the beginning, because at the beginning you’re trying to buy traffic and your listing hasn’t been proven yet. So you should expect the high costs, especially at the beginning. So I would, first thing to do is be patient. Let the data come in. If you’re not getting any impressions or you’re not getting any clicks after a few days then you would wanna increase your bid. So little things, but don’t go in there and start changing stuff and changing your targeting or changing your bids on things. To slip things, go slowly at the very beginning.
– And you’re talking about the automatic targeting campaign, correct?
– Yeah. ‘Cause like, if your default bid is 75 cents if you’re not getting any traffic then you may wanna increase that bid after a few days. So the next thing I would do is inside your seller central account there’s a section if you click on the ad group name you can go to the search term area. The search term area is like a search it’s your search term report that shows you what product or what search terms or product is showing up for. So that’s a good place to like see where Amazon is showing up your product. And if there’s anything in there that doesn’t make sense let’s say like this dog brush example we don’t sell a dog brush for short hair we sell one for long hair and you don’t want your product show up for the short hair. You need to make that a negative exact in that automatic campaign so that you stop spending money on it because it’s not, it hasn’t converted yet. And those are only on search terms that you’ve gotten a lot of traffic to. If you see a lot of traffic to a search term, that’s taken up a lot of your budget. If it’s not converting it’s probably a good idea to get rid of that by making it a negative exact in an automatic campaign.
– And I’m gonna interrupt you. So when you make a negative exact that means that Amazon is no longer gonna be showing your product for that keyword that you just made a negative.
– So there’s confusion in that regard as well. So I wanted to clear that what you’re telling Amazon to do when you make a negative is to stop showing your product for that keyword.
– So now you’ve made some negatives in your auto campaign. You’ve run it for a long time. There’s data, there’s data there. When do you take your stuff and make manual campaigns? At what point in your strategy, do you open up manual campaigns and start adjusting the bids on each keyword?
– Yeah. You could do it from three, four days in but start making manual campaigns. That’s not a bad idea but you can always have a manual campaign created maybe within the next like 7 to 14 days. But what you’re doing again, is you’re looking at that search term report in your automatic campaign and you’re finding search terms that your product converted on, and you’re removing those from your automatic campaign so that you can bid on them in a manual campaign more aggressively. Because it’s already been proven in your automatic campaign you’re taking it out of your auto, put them in a manual ’cause now you want your auto to find new terms because it’s already been tested already. Now that the previous term has already been tested. So you’d wanna put it in a manual where you can control the bid and you can control the budget. And there’s different match types broad, phrase, and exact. They kind of, the name kind of speaks for themselves broad as like a wide net. You’re showing, you’re telling Amazon to show my product for any type of keyword that has these words in it in any order, it can be at any order. So dog brush for shedding, it could be a golden doodle dog brush for shedding, like any order. Phrase it has to be in that particular order. So the words have to follow it together. They have to be in that same order. And then exact match is exactly what you wanna bid on the exact same term that you converted on in your automatic campaign. A lot of people test all three, that’s not a bad strategy. You can test all three, sometimes a broader or phrase converts differently than an exact match. You can test those out separately. I would put those in a separate ad group or I put those in a separate campaign to kind of so you can look at the data better but after your auto converts, the next thing after your auto campaign has been running for about a week or so, the next thing to do is launch a manual campaign. And you can test it for match types, broad, phrase, or exact.
– When you put those keywords in the manual campaign that you’ve proven in the auto you need to also make it a negative exact in the auto.
– Yeah, a lot of people forget that.
– And that way you don’t want your campaigns basically bidding against each other for the same keyword. And you’re not getting the bid that you want out of that manual campaign. So you definitely wanna be making sure you’re adding negatives when you move campaigns out. All right, so let’s talk now just real brief. There’s lots of tools out there that do this, that audit, help automate this process because there’s a lot going on. You can you know, Kris you and I talk about this all the time. We’ve spent hours pouring over these search term reports going through the data, making spreadsheets and you know, filtering the spreadsheets by ACoS and then making all these adjustments, bid adjustments there’s a lot to it. So there’s lots of tools out there that help this process Sellozo is one that does this. But even still even if you’re going to use a tool to automate this you need to have a good understanding of what the advertising process is. Because that way you can help design the strategy behind what you’re trying to do. And what stage of the product life cycle you’re in, whether you’re launching the product where you need to be more aggressive or where it’s more stable listing where you’re trying to make your ad spend profitable and something that you can continue to do. So, really understanding how it works is important and then once you do, I highly recommend people dig in and really run their first campaigns themselves so they get an idea of what’s going on, and then automating it down the road is the next step, that you wanna do so that you’re not having to do all of this work manually.
– Yeah, it takes a lot of time. You know, you could take you six, seven hours a week just to optimize your campaigns. And once you get fully scaled up, but yeah, to your point there is tools out there that can help with automating your ad process. But I would first and to your point, I would first learn how to do this. You know, learn how to set up an ad campaign learn the difference between a broad, phrase, exact. Learn sponsored brand, sponsored product ads some sponsored display, like learn what all that is so that you can understand what the tool is doing or what your VA is doing or whoever you outsource this to in the future. So you know what they’re doing because you wanna have some idea what’s really happening. And this has changing a lot. Like Amazon has changed advertising on Amazon’s platform very fast this year. I mean, there’s been new features coming out, we’ve got sponsored brand video now, you’ve got display. There’s a whole bunch of stuff that’s been rolling out. So, I will look for more money to be poured into advertising on Amazon. Cost-per-clicks are gonna go up but it’s gonna be, this is the way to kind of show Amazon that you wanna rank your product because every time somebody buys your product through your ad, Amazon sees that and it will boost your ranking up organically for that keyword that that customer used. So it’s important to have good keywords you’re gonna target. Make sure you’re running ads ’cause it only help in the long run.
– Absolutely. Absolutely well, we’d love to talk to you out there if you’re wanting to discuss your ad strategy or how Sellozo could help you out with your advertising on Amazon. You can book a call with either Kris or I. You can go to sellozo.com and then you can click where you can book a call schedule a call with either one of us. And we’ll be happy to talk with you. We will schedule 30 minutes where we can talk all kinds of strategy and we can show you a demo of Sellozo as well and how it works. Also, for listening to this podcast, we have a special for you. You can get 20% off your first month with the code podcast 20. So go to sellozo.com, get click get started. Podcast 20 is your code to get 20% off your first month. Kris, that was fun.
– Yeah, that was a good one and we just scratched the surface. There’s a lot more we can get into about this.
– Oh yeah.
– We’ll talk more about it in the future.
– We’ll definitely be digging into the details of this because this is a major, I mean this is one of the most important steps to launch your product. You put a product on Amazon and you don’t add run ads, most likely you’re not–
– You won’t be found. No one gonna find you.
– You won’t be found. Amazon is a pay to play platform. There’s no question about it. You gotta pay to show your products on there. So yeah, it’s a huge step and we’ll be really digging in in future episodes on all the strategies and tips for advertising.
– For sure.
– All right, Kris have a good one. Everyone out there have a great day as well. We’ll see you on the next day.
– Bye man, bye.
What does PPC mean?
PPC means pay-per-click and is when Amazon charges you for every click to your ad.