Amazon PPC is Amazon’s advertising ecosystem, where sellers can promote their products under the pay-per-click advertising model. It’s one of the most cost-effective methods for sellers to promote their products on Amazon, increase their visibility to potential customers, and drive sales.
To maximize your advertising efforts and build a profitable business on Amazon, you need a solid Amazon PPC strategy. You can have the best product and the highest rating on Amazon SEO. Still, if you’re not advertising on Amazon, you’re leaving yourself vulnerable for competitors to swoop in and claim your market share. In this blog post, you will learn everything about optimizing different campaigns, tracking tools, and helpful data analysis tips.
The Importance of Managing Amazon PPC Campaigns
So, what is Amazon PPC campaign? It’s an Amazon paid advertising campaign that uses a pay-per-click model. Effective management of Amazon advertising campaigns is not simply about running ads. It’s about strategically managing and optimizing campaigns to align with business goals, respond to market changes, and control your ad spend. PPC campaign management helps you:
- Increase product visibility and brand awareness
- Optimize ad spend with precise targeting
- Enhance sales velocity and organic ranking
- Maximize ROI through regular optimization insight into customer behavior
Key Amazon PPC Metrics to Monitor
We can split the Amazon PPC campaign metrics into two groups:
- Those that show the overall result and traffic’s cost — ACOS, ROAS, CPA, CPC;
- Those that show the stages of the client’s funnel are CTR and CR.
However, the metric you consider crucial for your Amazon PPC campaign might vary based on your unique business goals and advertising strategy. So, let’s dive in and look at the key Amazon PPC metrics.
Conversion Rate (CVR)
Conversion Rate calculates the percentage of clicks on your Amazon PPC ad that result in a sale. A high Amazon PPC conversion rate means that shoppers who click on your ad are finding what they need on your product details page. It shows effective Amazon listing optimization, a high-quality product, and competitive pricing. A low CVR could suggest issues with the product listing, price, or customer reviews.
Running Amazon PPC campaigns doesn’t automatically translate to a high conversion rate. To get a decent conversion rate from advertising, you must show ads in the right place at the right time. When done right, Amazon PPC conversion rate will typically be better than organic conversion. If your campaigns aren’t converting, you should check what keywords you target and try to work on optimization.
Here’s how you can make sure your clicks turn into conversions:
- Showcase your product: Use high-quality images and video demos to showcase your product and earn the trust of shoppers on Amazon,
- Details matter: Provide a comprehensive product description, including competitor comparisons and compelling bullet points that highlight unique features and benefits to answer potential questions upfront.
- Create urgency: Implement promotional tactics like limited-time discounts, coupons, and price cuts. Such a strategy encourages buyers to check out your product.
- Reviews make sense: Focus on customer satisfaction and ask your customers to leave reviews since they greatly impact CVR.
- Leverage customer Q&A and reviews: Address common questions or concerns in the Q&A section to build trust and credibility.
- Improve pricing strategy: Price your product competitively within your market range. Consider using tools to monitor competitor pricing and adjust yours to stay attractive without sacrificing margins.
Cost-Per-Click (CPC)
Cost-per-click is the fee you pay Amazon each time a customer clicks on your ad. It directly affects your advertising budget and can impact ACOS and ROAS. Lowering CPC while maintaining Amazon PPC CTR and conversions improves ad efficiency and reduces costs. Since CPC is a measure of traffic, keywords with a high search volume will have a higher CPC, while long-tail keywords generate a lower CPC.
This is how you improve your Amazon PPC campaigns CPC:
- Prioritize relevancy: Target keywords directly linked to your product or niche.
- Incorporate long-tail keywords: Long-tail keywords often have lower CPCs and can attract more relevant, purchase-ready traffic.
- Use bid automation: Bid automation or Amazon’s suggested bid range keeps your bids competitive but cost-effective.
- Lean more towards exact match type: Exact match type should be about 60% of total spend; this will help prevent your ads from irrelevant keywords, slashing the cost of clicks that don’t align with your goals.
- Consider organic rank when bidding: If your ranking is top-notch, consider playing it smart with lower keyword bids. Position your ads at the Rest of Search, maintaining visibility while keeping CPC in check.
- Add negative keywords: By eliminating irrelevant traffic, negative keywords help focus your budget on search terms with lower CPC and higher conversion rates.
Click-Through Rate (CTR)
Click-through rate (CTR) measures the percentage of people who click on an ad after seeing it. It measures how appealing and relevant your ad is to Amazon shoppers. A higher Amazon PPC CTR shows that your ad resonates with customers, potentially increasing your quality score, which can improve ad placement. Low CTR may suggest that your ad copy, ad images, listing title, and main product image need improvement.
If you’re struggling with a low Amazon PPC CTR, here are some tips to turn this around:
- Utilize on-Amazon promotions and coupons: Offering discounts can drastically improve your CTR and CVR. Mention discounts and coupons in your Amazon PPC ad copy, like “Save 25% with Amazon coupon,” to increase your ads’ clicks.
- Increase your ad spend: Consider boosting your ad budget to place higher bids for top-of-page one visibility or top-of-search, as these have higher CTRs.
- Optimize product title and main image: Ensure your title is concise, keyword-rich, and highlights key product benefits. Use a high-quality main image that clearly shows the product, meets Amazon’s guidelines, and stands out.
- Refine targeting: Use highly relevant keywords that align with your product to avoid irrelevant impressions. Use exact match and phrase match targeting for higher intent clicks.
- Test ad copy: Experiment with different versions to see which performs best.
Advertising Cost of Sales (ACOS)
Advertising Cost of Sales measures the effectiveness of ad spending and represents the ratio of ad spend to sales generated from those ads, expressed as a percentage. A lower ACOS indicates more efficient ad spending.
ACOS helps gauge profitability and efficiency. If your ACOS is too high, your ads may not generate enough sales to justify the spending. The ideal ACOS can vary for different products, based on margin, goal (growth vs. profitability), and ad strategy.
This is how you optimize ACOS in Amazon PPC campaigns:
- Prioritize relevance: Target keywords directly related to your product to attract more relevant clicks and improve ACOS.
- Use negative keywords: Add negative keywords to eliminate irrelevant traffic that results in wasted spend, thus lowering ACOS.
- Adjust bids for keywords: Lower bids on low-converting keywords and increase bids on keywords that drive sales at a profitable CPC.
- Optimize your listing for conversions: To enhance conversion rates, ensure your product listings are compelling, accurate, and aligned with customer expectations.
- Prune your ad placements: rule out underperforming ad placements to avoid unnecessary ad spending on placements that don’t drive sales.
- Focus on high-intent keywords: Use exact match for high-converting keywords that signal clear purchase intent, and avoid broad keywords that attract clicks without conversions.
Return on Investment (RoI)
Return on Investment (ROI) measures the profit you’re making compared to the money you invest in your Amazon PPC campaigns. It’s like figuring out if your advertising efforts and money are paying off. Unlike ACOS or ROAS, which focus solely on ad spend relative to revenue, ROI accounts for the profit made after covering ad costs.
For Amazon PPC campaigns, a positive ROI means you’re making a profit, while a negative ROI indicates that you are spending more on ads than the revenue they generate By monitoring your ROI, you can tweak your campaigns to focus on what’s working best.
If a specific keyword or ad gives you a higher ROI, you should invest more into it by gradually increasing bids on that keyword. This ensures that your advertising efforts on Amazon effectively boost your business’s success.
Here’s how you optimize for maximum ROI in your Amazon PPC campaigns:
- Focus on high-converting keywords that yield substantial returns.
- Optimize images, product descriptions, and customer reviews to enhance your listing quality and increase conversions from ad clicks.
- Lower your Cost per Click by using long-tail and negative keywords to reduce irrelevant clicks.
- Target competitor listings and complementary products in Sponsored Display ads to capture high-intent traffic, increase the likelihood of conversion, and boost ROI.
- Experiment with different ad types (Sponsored Products, Sponsored Brands) and placements to find the most cost-effective options.
Return on Ad Spend (ROAS)
Return on Ad Spend (ROAS) shows how much money you make for every dollar you spend on advertising. It’s the opposite of ACOS. This metric helps you understand the effectiveness of your Amazon PPC campaigns by showing the revenue generated from your advertising costs.
How it helps in optimizing Amazon PPC campaign:
- RoAS indicates if your ads are making more money than they cost. A ROAS of 5, for example, means you’re making $5 for every $1 spent;
- It helps you allocate your advertising budget wisely. Focus more on campaigns with higher RoAS to maximize profitability;
- RoAS guides strategic decisions, allowing you to optimize your advertising strategy for better overall performance and profitability.
Tools for Monitoring Amazon PPC Campaigns
You can efficiently monitor your PPC campaigns by using the following tools and platforms:
Amazon Advertising console
Amazon Advertising Console (AAC) offers specialized data and reports crafted for Amazon PPC campaigns. You can create and track campaigns, track performance, and manage users here. There’s also a support center that helps advertisers manage billing and payment methods.
The ACC is available to sellers with an Amazon seller account and Amazon PPC advertisers who use Sponsored Product ads. Amazon Advertising Console is useful for driving and understanding traffic, optimizing sales, and launching products.
My Real Profit
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Selling on Amazon and juggling the tasks required to remain profitable is time-consuming. You don’t have to spend even more time digging through pages of reports to access your performance analytics. Let My Real Profit do the grunt work for you and present your Amazon PPC metrics in a convenient, easy-to-understand, and optimizable format.
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How to Optimize Your Amazon PPC Campaign Performance
Here are a few ways how you can optimize the campaign performance.
- Start by implementing a systematic approach with intuitive campaign naming conventions like ASIN — Ad type — Match type — Keyword. This not only streamlines your workflow but also ensures quick navigation.
- Maintain a structured setup: one campaign, one ad group, and target five keywords. This strategy allows your budget to cover all keywords, delivering more comprehensive results efficiently.
- Do not deactivate campaigns too early. It takes around three days for all the data to be processed & provides a more accurate representation of performance.
Regular Keyword Review
Regular keyword review is about consistently assessing and analyzing the performance of keywords used in your Amazon PPC campaigns.
To do it efficiently, you must monitor your search term reports, identify new and relevant keywords, remove underperforming or irrelevant terms, and adjust your keyword strategy to meet current market trends.
Combine long-tail keywords for high buyer intent with broader keywords for a wider reach. You must also add irrelevant or low-converting keywords as negative keywords to prevent ads from showing for unqualified traffic and wasting your ad spend.
Competitor Analysis
Amazon sellers use competitor analysis to track and understand the strategies employed by their competitors in the same product category. This includes examining their product listings, pricing tactics, ad strategies, and customer reviews. Here’s how you perform competitor analysis on Amazon:
Identify Your Competitors’ Valuable Keywords
Monitoring your competitors constantly helps you identify the keywords they’re promoting and ranking for. You can then add them to your listing or Amazon PPC campaigns to avoid losing your ranking position to the competition.
There are two ways to do competitor keyword research: The slow but free method or the fast but paid method.
The slow and free method would involve looking up individual competing ASINs on Amazon and scouring through the listings, one by one, to identify the keywords your competitors are using. This is not exactly the most efficient or effective competitor keyword research strategy, but it’s a good starting point.
The fast and paid method uses a reverse ASIN lookup tool like Helium 10. These tools can typically pull all the valuable data from a competitor’s listing, including the keywords they rank for, each keyword’s rank, the keywords competitors are promoting, and other valuable metrics. You can then compare these keywords to your own to know where you rank compared to each competitor. You might discover new keywords to incorporate into your product listing and Amazon PPC campaigns.
Monitor Your Competitors’ Pricing Patterns
Competitive pricing is crucial to your success on Amazon, and you can only do that by monitoring your competitors’ prices and knowing when to reprice your product. But knowing how to price your product goes deeper than just beating your competition to the punch. It’s also about complying with Amazon’s Fair Price Policy.
Amazon wants to offer shoppers the best prices while taming overpricing on the platform. You need to price your product within a specific accepted pricing range. Otherwise, Amazon could pull your Buy Box privileges and cause a drop in Amazon PPC campaigns conversions.
The best way to monitor your competitors’ prices is with the help of a price tracker tool. Such a tool shows your competition’s current price and their pricing history. That way, you can tell if their pricing fluctuates and when it fluctuates. You can then use that data to determine the product’s long-term profitability and pinpoint the optimal price point for maximum Amazon PPC conversion rates.
Spy On Your Competitors’ Amazon PPC Campaigns
Understanding your competitors’ marketing strategies can offer valuable insight and help you optimize your Amazon PPC campaigns more effectively.
Ad spy tools can reveal the keywords your competitors are bidding for in their Amazon PPC campaigns, bid amounts, and other crucial Amazon PPC metrics. This information will help you formulate a winning Amazon PPC campaign strategy, and if your competitors’ campaigns are performing poorly, you’ll know the mistakes to avoid in your campaigns.
Regular Amazon PPC Analysis and Adjustment
Use My Real Profit Amazon PPC reports to track your Amazon PPC performance. Prioritize campaigns and keywords that drive high ROAS and profitable ACoS, adjusting bids to allocate spend efficiently.
Next, look at your search term reports to see which search terms drive clicks and conversions. You can then use the high-performing search terms in your Amazon PPC campaigns and lower your bids on the low-performing ones.
Test Continuously
Effective Amazon PPC advertising is not a set-and-forget kind of thing. You must continuously test and adjust aspects of your ads to get the best ROI. Test different ad copy, images, and targeting options to identify the most effective combinations. Amazon’s experimentation tools and split testing in Sponsored Brand ads can help you refine your approach.
If you’re primarily using Sponsored Product ads, consider combining them with Sponsored Brand or Display ads to expand reach. Diversifying your Amazon campaigns can help you uncover new growth opportunities.
Tips for Efficient Data Analysis
Set Clear Goals
Setting clear goals will help you focus on the most critical metrics that will guide you toward achieving your desired outcome. Start by identifying which KPIs are most relevant to your business goals. Then, based on historical data, determine what success looks like for each KPI. For example, if your average ACoS is 25%, you might set a goal to bring it down to 20%. Establishing these targets makes measuring progress and optimizing your Amazon PPC conversion rate easier.
Try Visualization Tools
Use data visualization tools like graphs, charts, and heat maps. They present information in an easy-to-understand way, making it a breeze to identify areas that might need extra attention. My Real Profit advertising analytics offer visualization tools like line graphs and heat maps to help you quickly identify trends
Visualization tools make it easier to track changes in your Amazon PPC metrics as opposed to crunching numbers manually. They also make it easier to see how each Amazon PPC placement performs individually.
Compare Periods
Check out trends and patterns in your Amazon PPC reports over time. Comparing data across different time frames provides insights into both short-term fluctuations and long-term trends. For example, using My Real Profit advertising analytics to track hourly Amazon PPC campaigns performance can help you adjust your day-parting bids to get better ROI
Categorize Your Data
Categorizing your data can help direct your optimization efforts where they’ll have the most impact. You can categorize your Amazon PPC analysis data based on:
- Campaign type to analyze each type separately
- ASIN to see how each product performs within Amazon PPC campaigns
- Keyword match type to reveal the most effective match type per campaign
- Ad placement to determine the most profitable placement
Conclusion
Monitoring and optimizing your campaigns is more than understanding your Amazon PPC metrics. It’s about creating a clear advertising strategy and knowing the tools you need in your arsenal to execute it. Making data-driven decisions is crucial to creating an effective Amazon PPC strategy. This is why My Real Profit PPC insights tool is invaluable for sellers wanting to create profitable campaigns.
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FAQs
Where to monitor Amazon ads?
You can use Amazon Advertising console tools or, better yet, My Real Profit advertising analytics to clearly see your Amazon PPC campaigns’ performance.
Why is it important to monitor Amazon PPC campaigns?
Sellers must improve strategies, maximize ROI, and stay competitive on the Amazon platform. This can only be achieved by consistently monitoring and optimizing your campaigns.
What are the key metrics to focus on when analyzing Amazon PPC analysis data?
The most critical Amazon metrics are Click-Through Rate (CTR), Conversion Rate, Cost-per-Click (CPC), Advertising Cost of Sales (ACOS), ROI, and ROAS.
What should I do to optimize my Amazon PPC campaigns?
Explore tips and techniques for leveraging your data to make informed decisions, refine keyword targeting, and enhance overall campaign performance. You can also check the advertising via the A/B testing and competitor analysis.
How often should I look at my Amazon PPC reports?
It’s better to do it regularly. However, the frequency also depends on various factors, such as your campaign objectives, budget, and the competitive landscape.
