Amazon PPC Ads: A Beginner’s Guide to Amazon FBA Ads

A few years ago when I first started using Amazon PPC ads, I had little understanding about what I was doing, how the system worked, or how to maximize my returns.

Sound familiar?

I knew if I didn’t learn more about this process, I’d be losing out on sales and spending my hard-earned dollars ineffectively.

I don’t want you to be in that situation.

Hence, I’ve put together everything you need to know about Amazon PPC (aka Amazon Sponsored Products Ads).

What Is Amazon FBA PPC?

It’s quite simple.

An Amazon PPC ad is an advertising method where you, the seller, only pay fees when a potential buyer clicks on your Amazon advertisement.

And, it’s not new.

Although Amazon introduced this method in 2012, PPC (pay-per-click) has been around for a long time.

It’s generally agreed that it was started by goto.com in 1998. But, it was the introduction of the now legendary Google Adwords in 2000 (now known as Google Ads) that made PPC the successful beast it is today.

This system is different to CPI (cost per impression) advertising—used by sites such as Facebook. This is where the vendor pays for the number of times that an ad is seen, not clicked.

Do you see an important difference?

With Amazon PPC ad campaigns, you’re only spending your advertising budget when someone is genuinely interested—i.e. they “click.”

Listen up.

The potential is massive. Amazon is the largest retail website in the US—with over 197 million users.

What’s more, using FBA (fulfillment by Amazon) reduces your workload. Amazon stores your products at their depots and dispatches them whenever you make a sale.

Leaving you more time to look after your valuable business.

What Type of Adverts Does Amazon PPC Display?

When you begin your very first Amazon Advertising PPC campaign, you have the option to choose from three different types of advertisement. They are: headline search, product display, and sponsored products ads.

Let me take you quickly through them.

Headline Search Ads

When viewing SERPs (Amazon’s search engine results pages), these adverts appear at the very top, above the listings—therefore immediately grabbing the customer’s attention (as, naturally, you read from the top down!).

Finding commercial search terms is essential in getting the best results for your headline search ads campaign. Try using exact match terms in your headline along with other term variations. Exact match terms could be very expensive at times but as long as you’re driving sales it is definitely worth targeting these search terms.

In addition to images of your products and a star rating, they also allow you to write a little copy to promote them even further.

Product Display Ads

What I like to call, the “cheeky” ads.

These appear on individual product detail pages—that are similar to your own goods. They aim to either a) lure the customer away from their selected product page and choose yours instead, or b) tempt them to buy a related item (yours) in addition to their selected one.

Sponsored Product Ads

The “everywhere” ads.

These adverts appear in numerous locations, including Amazon search results pages, beneath headline ads, on single product pages, and to the right-hand-side of organic listings.

Here’s the kicker.

These adverts are not just confined to Amazon pages.

Have you ever been on a website and seen a product being advertised—either identical, similar, or related to something you’ve recently been searching for? These can be the Amazon sponsored product ads.

How Much Does Amazon PPC Cost?

An important question.

Advertising can either break or make a business.

The key factor to remember is that Amazon PPC ads are not a one-size-fits-all process. This isn’t like paying for a half-page spread in a newspaper—where the cost is the same to all advertisers and depends on the size of the advert.

Instead, you “bid” on specific words—i.e. those that potential buyers will use to locate your product. This bid is the maximum amount that you’re willing to pay every single time someone clicks through to your item.

Let me explain how it works.

Say you bid $4.00 on a particular keyword. Just because this is your bid, it doesn’t automatically mean that you’ll pay this exact price—it depends on what other vendors are willing to pay.

If other competitors bid less money than you on the same keyword, you pay $0.01 more than the next highest bid. So, if the closest price to you was $0.90, your clicks would only cost $0.91. If it was $3.90, you would pay $3.91.

Simple, right?

Therefore, the more popular the keyword—the more likely you are to pay more.

However, if you’re not the highest bidder, that doesn’t automatically mean your product will not be shown. But, it’s less likely to be visible, and when it does appear, the lower in listings it will be—even a few pages deep.

For a start, having a small daily budget ad spent is a good idea and scale as you go. You can manually set your daily budget in both manual and automated Amazon Ads campaign. We will discuss further manual and automated ways of advertising below.

In brief:

• Enter a too high bid—your product is more likely to be advertised, but the greater your costs—eating into your profits.
• Enter a too low bid—reduces your advertising cost of sale (ACoS) but can damage your visibility and sales.

Starting Your Amazon Advertising Campaign

Let me bring it down to the basics.

Products are found on Amazon, and resulting adverts, through searches. These are triggered by keywords (hopefully) related to your product. How these keywords are selected, depends on your chosen Amazon campaign.

I will get into more detail about keywords in a second, but first, let me explain the two types of Amazon PPC ads campaigns—and bring you their pros and cons.

Automatic Campaign

Sometimes known simply as an auto campaign—this is the simplest method of advertising on Amazon and most often used by absolute beginners.

In short, in the auto campaign, you select your total budget and allow Amazon to choose the keywords relative to your product.

Pros of an Automatic Campaign

• It’s perfect for beginners—quick and easy to set up and commence advertising.
• There’s little effort required on the vendor’s part.
• You avoid the extensive time taken entering in your own chosen keywords.
• Amazon collects data on the campaign—allowing you to see spends and clicks, and enabling you to fine-tune future auto or manual campaigns.
• It assists with long tail keywords selection (more on that soon).

Cons of an Automatic Campaign

• There’s a chance of having your advert displayed for unrelated searches—the auto process isn’t flawless.
• Amazon will bid on relevant keywords, but this doesn’t mean it’s suitable for your specific product.
• It can equally bid on irrelevant keywords—costing you money that’s simply wasted

Manual Campaign

This method is ideal for those who really understand the keyword process—and want to max their advertising returns and conversion rate.

It involves the vendor personally choosing what keywords to bid on—answering searches most specific to their product and hopefully providing more profitability.

Pros of a Manual Campaign

• Quick and simple to reduce bids and remove keywords that aren’t yielding results.
• You can try out novel keyword ideas that competitors haven’t thought of—giving your products the edge.
• Amazon will still suggest the level of your keyword bids—despite being manual.
• Total control of Ad Spend.

Cons of a Manual Campaign

• It’s very time intensive—selecting a multitude of keywords for numerous products isn’t a quick process.
• Over-bidding or lazy keyword selection can cost a lot of money—with little return.

Just one more thing.

There are third-party smart engines that assist with your Amazon PPC advertising campaigns, enabling you to enhance conversions and increase revenues.

You can also check our recent blog post: 7 Reasons Your Business Needs Amazon PPC Automation Software

What Keywords to Choose for Your Amazon PPC Ads

Without the correct keywords, your ads will not appear. Hence, some keyword research will be required to ensure your advert has the maximum chance of exposure.

When creating your campaign, you have three types to select from, shown below.

Broad Match

This is the least competitive to bid on and hence the cheapest type—with Amazon including your ad with related products.

So, if your keyword was “beach towel,” not only may Amazon show your advert when this search term is entered, but it also may appear if someone looks for “large towel” or “beach wear.”

Phrase Match

A little like broad match, but with the difference that all the words in the phrase are included and expanded to include results with additional words before and after (without changing the order of the keywords).

Hence your “beach towel” phrase may result in your ad appearing if someone searches for “cotton beach towel” or “beach towel for kids.”

This is more expensive than the broad search.

Exact Phrase

The most expensive type when bidding. Your ad will only appear if the words “beach towel” are typed exactly into the search query.

Long-Tail Keyword Theory

When using Amazon Advertising PPC ads, there’s a belief that while brief popular keywords (short-head), such as “beach towel,” will yield a lot of results on searches, they aren’t as profitable as longer and more specific phrases (long-tail).

This is because a) exact long-tail phrases are less in demand and therefore cheaper and b) conversion rates are high as they answer the buyer’s exact query.

An example in this scenario would be using “100 percent cotton beach towel machine washable.”

Summary

When beginning your journey into the world of Amazon Advertising, it can at first be a little daunting.

It doesn’t have to be.

As you have seen, the process is actually very simple. My advice is to always start with an automatic campaign—in order to get the feel of the process. You can then refine and switch to manual when you feel more confident.

Here’s to happy and profitable Amazon selling!

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Also published on Medium.