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Amazon PPC for Beginners: Step-By-Step Guide

Amazon PPC (Pay-Per-Click) is a highly-effective and affordable way to enhance product visibility, generate more traffic to your listings, and increase sales.

This advertising approach allows you to create ads using specific keywords displayed in Amazon’s search results. That way, sponsored products appear prominently at the top of search results or relevant product pages when shoppers search for items using those keywords.

You can set up your Amazon PPC campaigns to boost sales using Helium 10’s Adtomic, SellerApp’s PPC audit tool.

Key Takeaways

  • There are three main types of Amazon advertising: Sponsored Products, Sponsored Brands, and Product Display ads.
  • A solid Amazon PPC strategy can help you beat the competition and win those first spots on the Amazon product listing page.
  • How much you spend on Amazon ads depends on your budget and campaign objectives.

What Is Amazon PPC?

Amazon pay-per-click (PPC), or Amazon sponsored ads, is an advertising strategy that enables third-party sellers and brands on Amazon to run product ads for specific keywords. When their keywords are triggered, these ads appear as sponsored products at the top of Amazon’s search results.

With Amazon PPC, you’re only charged for clicks on your ads rather than for each time your ad is displayed. This means that even if an ad appears multiple times, you’ll only pay for the clicks it receives.

This strategy enables you to distinguish yourself from competitors while managing costs effectively. It’s particularly beneficial when launching a new product and you lack a history of sales or reviews, as it can jumpstart your progress.

How Does Amazon PPC Work?

Amazon PPC auction works the same way as the bidding system on Google PPC.

For example, if you search “mug” on Amazon, the Amazon PPC tool gathers every relevant ad for the keyword. You then bid on the keyword against other sellers, and the highest bidder wins the auction.

From there, Amazon displays the winning bid as a Sponsored Product ad in search results for that keyword alongside the product pages. And whenever a shopper clicks on the ad, you pay a small fee to Amazon based on the keyword’s auction bid.

Benefits of Amazon PPC to Sellers

Amazon PPC offers sellers the following benefits:

Increases Product Sales

Amazon ads can effectively increase your product’s visibility and attract potential buyers. You can get more impressions, clicks, and sales by selecting relevant keywords and optimizing your campaign settings.

Boosts Your Organic Rankings

When more people visit your product page and make purchases, it improves the product’s ranking in the organic search results. In other words, sponsored ads will drive more traffic to your page, helping it rank faster and become more visible in Amazon’s search system.

Reduces Competition

Achieving organic rankings can be challenging, but with Amazon PPC, you can easily present your product to potential customers. That helps you secure top positions ahead of your competitors.

Creates Brand Awareness

If you’re in the early stages of launching your product or trying to expand your brand into new markets, Amazon PPC can help connect with a larger audience and increase brand recognition.

Gives You Real-Time Feedback

Amazon product ads give you valuable customer feedback and real-time data, which can help you optimize your campaigns and adjust your product page.

Helps You Get the Amazon Buy Box

The Buy Box is a crucial component of Amazon that influences sales directly.

amazon pricing changing effects
Amazon PPC ads are a far better strategy than a poor repricing plan

This box allows customers to purchase your product quickly. By securing the Buy Box, you can increase clicks and sales since it’s the most visible section of the page.

What Are the Amazon PPC Starting Requirements?

Here are the things you need to get started with Amazon PPC:

Valid Amazon Seller Central Account and Approved Products

Amazon Seller Central will typically approve you within 24 hours, so you won’t have to wait too long to begin advertising.

Product Description and Appealing Product Images

An enticing, detailed, keyword-rich product description written according to Amazon SEO best practices and precise, high-quality, and appealing product images will help your Amazon PPC campaigns stand out.

optimize amazon product listing images
Optimize your images and listing to boost Amazon PPC potential

You can use Helium 10’s Listing Analyzer to get your product description right, prevent rejections from Amazon, and increase your chances of visibility.

Keywords to Bid On

Use Helium 10’s keyword research tools to find a list of keywords to bid on that are most relevant to your product and needs. I recommend Cerebro or Magnet to uncover product keywords, see what your competitor is already ranking for and pick the best performers for your PPC campaign.

Understanding Amazon PPC Key Terms

amazon ppc dashboard

Here are some key terms you should be familiar with to make the best decision for your Amazon PPC strategy.

Impressions

An ad impression is the number of times an Amazon user sees your product ad on a screen (smartphone, PC, etc). Therefore, if an ad has 1,000 impressions, it has been viewed 1,000 times by people meeting the campaign specifications.

Clicks

Clicks indicate the total number of times shoppers have clicked your Amazon ad

For instance, Amazon may display your ad to 1,000 people when they search for a product, but only 100 will click on your ad.

Key Performance Indicators (KPIs)

Amazon’s key performance indicators (KPIs) help gauge the effectiveness of an advertising campaign on the platform.

These metrics enable you to assess if your Amazon PPC campaigns are achieving their intended goals. That way, you can quickly make necessary modifications to avoid potential wastage of investments.

Advertising Cost of Sales (ACOS)

advertising cost of sales

The advertising cost of sales (ACOS) is a core KPI that compares the amount of money spent on ads versus the revenue generated.

This KPI shows you whether you’re making losses by running ads, barely breaking even, or making profits on top of the ad spend.

Cost-Per-Click (CPC)

This is the amount you pay to Amazon when a potential buyer clicks on your ad

The CPC can vary depending on various factors, such as your competitors’ bids, the specific keyword you’re targeting, excluding negative keywords, seasonal fluctuations, and other variables.

Click-Through Rate (CTR)

The click-through rate is an ad’s ratio of clicks to impressions. So, if Amazon displays your ad to 1,000 people and only 100 click it, your CTR is 10%.

You can manually calculate/verify your CTR using the formula below:

CTR = [(Clicks/Impressions) × 100%]

Conversion Rate

This is the rate at which your ad successfully converts clicks into purchases

This can help you determine whether your product pages are convincing enough. 

After all, the Amazon PPC ads did their job to bring the customer in, so your product listing page should do the rest of the work.

Here’s a simple formula to calculate your conversion rate:

C.R = [(Clicks/Purchases) × 100%]

Attributed Sales

This is the overall sales revenue your advertisements generate from clicks within a specified time frame. The sales data may take up to 48 days to reflect in the report.

Negative Keywords

These are keywords that exclude specific search terms irrelevant to your ad’s content or target audience.

For example, if your ad is for men’s shoes, you’d want to put “women” as a negative keyword to prevent your product ad from displaying when someone searches for women’s shoes. 

That way, you don’t waste valuable clicks and impressions, which may skew your product performance data otherwise.

How Much Will Amazon PPC Cost?

The costs for Amazon PPC will differ for every seller based on the number of ad campaigns they’re running, targeted keywords, and the competitiveness of the product category. 

Typically, you should expect to pay between $0.15 and $6 per click.

amazon ppc spend strategy
Justify your Amazon PPC spend with efficient strategies that print the money back!

The amount you spend on Amazon advertisements depends on your budget and campaign goals. However, as a general rule, only spend 10-15% of your revenue.

Note:

The most effective way to ensure you get the best value for your money is to start with a smaller budget and modify it based on the results.

How to Set the Right Amazon PPC Campaign Goals?

amazon ppc strategy

Establishing appropriate goals for your Amazon PPC campaign to achieve success and effectively utilize your advertising budget is crucial. Here are a few tips on how to set the right goals for your campaign:

  • Understand your business goals: Clarify your overall business goals. Whether you’re looking to increase sales, improve brand visibility, or boost a new product, knowing your larger objectives will help you establish your PPC campaign goals.
  • Experiment: Try each type of PPC advertising campaign and explore automatic and manual keyword targeting to determine the most effective strategy for your brand.
  • Research: Conduct in-depth keyword research to discover your products’ most relevant and high-converting keywords. This will help you optimize your PPC campaign and achieve the best possible results.
  • Allocate a budget: Since different campaigns have different objectives, determine your budget for the PPC campaign and allocate it wisely.
  • Analyze your competitor: Pay attention to your competitor’s strategies and how well they’re performing to gain valuable insights.
  • Review and adjust regularly: Review your campaign’s performance frequently and change your strategies based on current data.

Types of Amazon PPC Ads to Know

There are three main types of Amazon PPC ads:

Amazon Sponsored Products

Sponsored Products ads, which can closely resemble organic listings, appear in search results and product listing pages. 66% of third-party sellers use this type of Amazon PPC ad, making it the most popular.

It can be particularly beneficial for the following types of sellers:

  • New sellers
  • Sellers whose products have low organic visibility
  • Sellers with seasonal products
  • Sellers launching a new product on Amazon
amazon sponsored product

There are two types of keyword targeting strategies for sellers targeting Sponsored Products’ ads:

  • Automatic targeting: Amazon uses automatic targeting to determine which keywords to focus on based on the keywords in your listing. By analyzing shopper behavior, Amazon continuously adjusts and optimizes your bids to improve targeting and increase conversion rates.
  • Manual targeting: This option gives you more control over your ad campaigns. You can choose keywords from automatic campaigns or use Cerebro or Magnet to find high-volume relevant keywords to focus on. Additionally, you can set custom bids for each keyword.

Amazon Sponsored Brands

Sponsored Brand ads are advanced Amazon ads reserved for sellers and vendors registered under a specific brand.

They’re usually at the Amazon search result’s top, side, and bottom. These ad types feature the brand’s logo, tagline, and selected products.

amazon sponsored brand

Sponsored Brand ads can be in the form of images or videos, though video ads are generally more appealing and effective in capturing the viewers’ attention.

This type of PPC ad is best for these sellers:

  • Brand owners and manufacturers
  • Amazon storefront owners
  • Sellers with a diverse product catalog or product lines
  • Data-driven sellers

Amazon Sponsored Display ads allow you to target specific demographics or re-engage with customers who have visited your product. These ads usually display on Amazon and external websites like Facebook, giving you a wider reach and improving your overall Amazon PPC strategy.

What Are the Best Amazon PPC Optimization Tools?

Figuring out Amazon PPC can be a bit challenging if you don’t have any help. 

While you can rely on your Seller dashboard alone, you’ll miss out on specific optimization tips, improved data collection, robust keyword research, and advanced analytics/reporting.

That’s where my top tools for Amazon PPC research come into the mix:

Helium 10

helium 10 adtomic

Helium 10 offers Adtomic, a tool specifically designed to handle Amazon advertising campaigns.

This AI-powered PPC solution gives you a clear view of your PPC data to help you strategize your ad campaigns successfully and maximize your Amazon Advertising ROI.

Adtomic eliminates guesswork and headaches in PPC optimization by providing accurate keyword bidding suggestions. It lets you find, organize, and evaluate new potential keywords and negative targets in seconds.

You can combine Adtomic with Cerebro for keyword research and Listing Analyzer to improve your conversion rate on product pages.

SellerApp

sellerapp web home

SellerApp is a collection of tools designed for Amazon sellers and includes an Amazon PPC optimization tool.

The best part is that SellerApp’s Amazon PPC optimization tool utilizes advanced machine learning technology to streamline your Amazon PPC strategy and maximize profits.

Likewise, you get total control over all aspects of your advertising campaigns, ensuring long-term profitability. This includes automation of Amazon ads, optimizing negative keywords, efficiently harvesting keywords with just one click, and access to in-depth analytics.

Like Helium 10, SellerApp also features product research, keyword optimization, sales tracking, and competitor analysis tools to boost other aspects of your Amazon selling process.

Perpetua

perpetua web home

Perpetua offers optimization and intelligence software for eCommerce advertising. 

The software is designed to help businesses scale their growth on marketplaces such as Amazon and Instacart.

So, streamline your advertising efforts and save time and money with Perpetua’s automated campaign creation, execution, and optimization. You can input your strategic objectives, such as growth or profitability, and rely on Perpetua’s ad engine to handle the tactical execution.

More Guides from RevenueGeeks

Frequently Asked Questions

Launching your Amazon PPC strategy and campaigns right after creating a new listing is advisable. In addition to increasing visibility for your new product, launching your Amazon PPC advertising campaign early will also enable you to gather essential ad insights on the product. Consequently, this helps you refine and optimize your campaign accordingly.

It’s best to let an Amazon PPC campaign run for about 2-3 weeks to gather enough data to make informed decisions regarding any necessary changes to your PPC campaign.

Start Your Amazon PPC Journey

Starting Amazon PPC is simple and affordable. With the benefits of running Amazon advertising and the potential for generating substantial revenue, it’s no wonder Amazon PPC is a popular choice among e-commerce sellers worldwide.

If you want to expand your Amazon business successfully, let Helium 10 handle your PPC needs, and you’ll enjoy significant sales improvements in no time.

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