How To Optimize Amazon PPC Campaigns: 8 Profitable Strategies

  • #Scale Insights Team
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Amazon PPC (Pay-Per-Click) is an impactful marketing instrument enabling sellers to spotlight their offerings on Amazon via keyword bidding. By harnessing the power of PPC campaigns, sellers can escalate product exposure, funnel more traffic to their listings, and in turn, amplify sales.

However, tapping into the true potential of this tool requires one to understand how to optimize Amazon PPC campaigns. This encompasses leveraging data analytics to pinpoint crucial metrics, selecting appropriate targeting choices, crafting strategic bids and diversified ad versions, and persistently steering the campaign based on data-centric insights to enhance performance. By doing so, sellers can truly unlock the transformative power of Amazon PPC.

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1. Conducting Keyword Research

Keyword research is crucial in optimizing Amazon PPC campaigns. Identifying high-performing keywords can help improve campaign performance and increase sales. 

  1. Brainstorm: Start by brainstorming a list of relevant keywords related to your product. Use tools like Google Keyword Planner, MerchantWords, or Helium 10 to find relevant keywords.

  2. Analyze competitor keywords: Check what keywords your competitors are targeting. You can use Amazon analytics tools like Jungle Scout or Viral Launch to see the keywords they are ranking for.

  3. Evaluate search volume and relevance: Use tools like Google Keyword Planner to evaluate each keyword's search volume and relevance. Look for keywords with high search volume and highly relevant to your product.

  4. Check for relevance to customer search terms: Make sure the keywords you select are relevant to your customers' search terms. You can use search term reports to identify customers' search terms to find your product.

  5. Refine your keyword list: Refine your keyword list by eliminating irrelevant or low-performing keywords. Focus on high-performing keywords with a good search volume and highly relevant to your product.

In addition to manual research, several keyword research tools are available for sellers to use. These tools can help identify high-performing keywords and provide insights into search volume, competition, and related keywords.

Some popular keyword research tools for Amazon PPC campaigns include Jungle Scout, Helium 10, and Sellics. These tools can help sellers save time and effort in keyword research and optimize their campaigns for better performance.

Discover Amazon PPC Tools through these articles:  Amazon Seller Analytics Software, Best Amazon Analytics Tools, and Amazon Advertising Software. Elevate your advertising strategy now!

2. Creating A Targeted PPC Ad Campaign

Choosing the right campaign type is crucial for optimizing Amazon PPC campaigns. The two main campaign types are Sponsored Products and Sponsored Brands. Sponsored Product ads are best for promoting individual products, while Sponsored Brands ads are better suited for promoting a brand or product line.

Choose the most ideal campaign type. This ensures your ads target the right audience and are displayed correctly. This entire process effectively leads to higher click-through rates, better conversions, and more sales. 

Setting Up Targeting Options

Setting up targeting options is a critical step in optimizing Amazon PPC campaigns. 

  1. Determine your campaign type: Decide whether you want to run Sponsored Product, Brands, or Display campaigns. Each campaign type has different targeting options. Scale Insights features Fully Managed Campaigns which automatically creates customizable campaigns to your needs. Leverage this to take the legwork out of processes that can be automated.

  2. Choose your targeting method: You can choose between automatic targeting, where Amazon selects the relevant keywords and products for your ad, or manual targeting, where you choose the keywords and products yourself.

  3. Select your targeting options: For manual targeting, you can select keywords, ASINs, categories, and brands to target. You can choose between close matches, loose matches, complement matches, and substitutes for automatic targeting.

  4. Refine your targeting options: Once your campaign runs, you can use the search term report to see which search terms trigger your ads. Use this information to refine your targeting options by adding or removing keywords and adjusting bids.

Compelling Ad Copies And Setting Competitive Bids

Crafting effective ad copies attracts potential customers, persuading them to click on your ad. Make your ad copies clear, concise, and relevant to your target market. It must also clearly highlight your product’s USP (Unique Selling Point). Add a high-converting Call-to-Action as well.

Adding competitive bids is equally important. They enable your ad to appear at the top of the search results page. If you set your bid way too low, there’s a high chance the ad might not display (or may appear on later pages). This reduces visibility and the chances of getting clicks and conversions. A bid that is too high is not optimal either, as it can result in wasted ad spend.

Take advantage of Amazon’s suggested bid feature. Suggested Bidding estimates the bid you need to place in order for your ad to appear in the top, prominent position. However, it’s highly suggested to monitor and adjust bids based on campaign performance. This will ultimately help optimize results.

Let Scale Insights take the guesswork out of setting bids. Its Dynamic Bidding Algorithm dynamically adjusts bids towards your target ACoS based on your keyword or product target's performance.

Effective ad copy is essential because it attracts the attention of potential customers and persuades them to click on the ad. It should be clear, concise, and relevant to the target audience. It should also highlight the product's unique selling points and include a call to action.

3. Refining Campaigns With Negative Keywords

One of the most effective strategies in optimizing your PPC campaigns is using negative keywords. Here's an in-depth look at how negative keywords can fine-tune your PPC campaigns.

What Are Negative Keywords and Why They Work

Negative keywords are words or phrases that you specify in your PPC campaigns to prevent your ads from being triggered by certain search terms. They filter against irrelevant traffic, ensuring your ads are displayed only to those genuinely interested in your product or service.

The use of negative keywords enhances campaign relevancy and improves budget efficiency. By filtering out unwanted traffic, advertisers can reduce wasted spend on clicks that are unlikely to convert, increase click-through rates (CTR) by targeting more qualified leads, and improve overall campaign performance.

Using Phrase and Exact Match Keywords

Negative keywords can be used in two match types:

Phrase Match Negative Keywords: These prevent your ad from showing if the search query includes the exact phrase in the order you specify. For example, if you add "free delivery" as a negative phrase match, your ad won't show for queries like "shoes with free delivery."

Exact Match Negative Keywords: This ensures your ad doesn't show if the search query contains the exact negative keyword without any additional words. If "free shoes" is an exact match negative keyword, your ad won't show for that exact query but could still show for "shoes free delivery."

Negative Keywords In Action

If you're selling premium kitchenware, you'd want to avoid searching for budget options or unrelated categories. Examples of negative keywords could be:

  • Free

  • Cheap

  • Discounted

  • Used

  • Plastic (if you only sell metal or wooden items)

Consider you're running a PPC campaign for a high-end watch retailer. You don't want your ads to appear when someone searches for "cheap watches" or "watch repair." In this case, "cheap" and "repair" would be added as negative keywords to ensure your ads target users interested in purchasing new luxury watches.

Finally, it's important to regularly refine your negative keyword list. Analyze search term reports to identify irrelevant queries triggering your ads and add them as negative keywords. Continually updating this list helps target your campaigns and optimize your ad spend.

4. Monitoring Campaign Performance

Monitoring campaign performance is essential for optimizing Amazon PPC campaigns. Sellers should track key metrics, such as:

  1. Impressions: the number of times your ad was displayed to shoppers

  2. Clicks: the number of times shoppers clicked on your ad

  3. Click-through rate (CTR): the percentage of shoppers who clicked on your ad after seeing it

  4. Cost per click (CPC): the amount you pay each time someone clicks on your ad

  5. Spend: the total amount spent on your campaign.

  6. Conversions: the number of times a shopper purchased your product after clicking on your ad

  7. Conversion rate: the percentage of shoppers who purchased your product after clicking on your ad

  8. Advertising cost of sale (ACoS): the ratio of advertising spend to sales generated by your ads, expressed as a percentage

  9. Return on advertising spend (ROAS): the ratio of sales generated by your ads to advertising spend.

  10. Total sales: the total amount of sales generated by your ads.

Amazon Advertising Console provides a wealth of data and reports to help sellers monitor their campaign performance. Sellers can use the console to track their advertising spend, identify high-performing keywords, ensure profitable campaigns, and optimize their bids. Additionally, sellers can use third-party Amazon analytics tools, such as Google Analytics, to gain additional campaign insights.

To monitor campaign performance effectively, sellers should regularly review their performance data and make necessary adjustments to optimize their campaigns for better results.

They should also set up automatic campaign optimization rules within the Amazon Advertising Console to streamline the optimization process.

Take the guesswork out of manually analyzing your campaign through Scale Insights’ Ads Insights module. It monitors the performance of portfolios, ASINs, campaigns, ad groups, and keywords.

5. Making Data-Driven Decisions

Data analysis helps you make data-driven decisions which is ultimately crucial in optimizing your Amazon PPC campaigns. Sellers are able to pinpoint trends, patterns, and areas requiring improvement in terms of campaign performance. All of these allow sellers to decide on key aspects of their campaigns and make changes that lead to favorable results.

Sellers often need to gather and analyze data based on the following (but not limited to) key metrics:

Click-Through Rate (CTR)

CTR is a fundamental metric representing the ratio of users who click on a specific link to the number of total users who view an ad, webpage, or email. It is calculated by taking the number of clicks an ad receives, dividing it by the number of times the ad is shown (impressions), and converting that figure into a percentage.

Suppose an ad has been displayed 20,000 times and has received 200 clicks; the CTR would be calculated as follows: 

CTR = (200 / 20,000) x 100

CTR = 0.01 x 100

CTR = 1%

So the CTR in this scenario would be 1%.

CTR serves as a direct indicator of how relevant and compelling your ad content is to the target audience. A high CTR suggests that the ad is effective at capturing interest, which can contribute to higher ad quality scores and lower costs over time. 

If your CTR is low, this may prompt a review of your ad creative or the need to refine your targeting to ensure your ads are being shown to a more relevant audience.

Conversion Rate

The conversion rate is the percentage of clicks that result in a conversion—this conversion could be a sale, a lead generation form submission, or any other action deemed valuable.

The formula is: 

Conversion Rate  = (Number of Conversions/Number of Clicks)*100

The conversion rate reflects the effectiveness of not only the ad but also the landing page and the offer itself. Analyzing conversion rates can highlight issues or opportunities in the customer journey. 

For instance, a high conversion rate may indicate an optimal alignment between the ad message and the landing page, while a low conversion rate could signal a need to reassess the user experience or the offer's value proposition.

Let's say you're running an Amazon PPC campaign for your product, and your ad received 500 clicks in a week. Out of these 500 clicks, 50 resulted in sales.

To find the conversion rate, you would calculate:

Conversion Rate  = (50/500)*100 = 10%

Cost-Per-Click (CPC)

CPC measures the average cost for each click on an ad. It's calculated by dividing the total cost of the clicks by the number of clicks received. The total cost is derived from the bidding strategy employed, whether it's a cost-per-click model or conversions have been assigned a value in a cost-per-acquisition model.

CPC = Total Cost of Clicks/Total Number of Clicks

If a campaign incurs a total cost of $500 and garners 1,250 clicks, the CPC would simply be:

 CPC = $500/1,250 = $0.40 per click.

CPC is a direct measure of the financial efficiency of your campaign and is especially important when working within a budget. Analyzing CPC in conjunction with other metrics like CTR and conversion rate allows you to gauge whether you're spending too much for too little return. 

For example, if your CPC is high but your conversion rate is low, you may be paying too much for traffic that does not convert, indicating a need to revise your bidding strategy or reassess the profitability of targeting certain keywords.

Select A Target ACoS And Optimize To Hit It

When managing Amazon PPC campaigns, one of the primary goals is to achieve a target Advertising Cost of Sale (ACoS). This metric reflects the ratio of ad spend to targeted sales, and is crucial for ensuring that your advertising efforts are profitable.

Setting Your Target ACoS

The first step is to determine your break-even ACoS, which is the point where your advertising cost is equal to your profit margin. Any ACoS below this number means you're making a profit, while an ACoS above it means you're losing money on your ads. 

Your target ACoS should ideally be below your break-even point, but it can also be set higher if you're focusing on market penetration or brand awareness.

Gathering data based on these metrics is possible through the use of tools like Amazon Advertising, Advertising Console, Google Analytics, and other third-party analytics tools. Sellers can then utilize data to identify both low and high-performing ads and keywords.

Data analysis is also instrumental in bidding strategies and audience targeting. For instance, if a seller notices their ad isn’t performing well, they can make a couple of changes, like adjusting their targeting options to exclude the unintended audience, or refining their ad copies to better appeal to the right market.

Ultimately, data-driven decision-making is vital in achieving success on your Amazon PPC campaigns. Better if you use a data-driven Amazon analytics software to make performance monitoring seamless and less cumbersome. 

6. A/B Testing Ad Variations

A/B testing is a scientific approach to improving PPC campaigns. By systematically comparing different versions of an ad, marketers can understand what resonates best with their audience. 

Setting Clear Goals

Establishing clear, measurable objectives is the foundation of successful A/B testing. Your goals should align with broader business objectives and PPC campaign targets. 

Whether it's enhancing the CTR, conversion rate, or decreasing the cost-per-acquisition (CPA), having a clear metric of success will dictate the structure of your test and clarity in interpreting results.

Suppose your primary goal is to increase the conversion rate for a high-value product. You could A/B test two different call-to-action (CTA) phrases: "Buy Now and Save" versus "Limited Offer – Shop Today" to determine which one drives more purchases.

Testing One Variable At A Time

For A/B testing to yield clear insights, only one ad element should differ between the two variations. This could be a visual component, the ad copy, or even the landing page the ad directs to. Isolating the variable allows you to attribute any changes in campaign performance directly to that specific change.

If testing ad headlines, you might have these ad variations:

  • Ad Variation A: "Transform Your Sleep with Our Award-Winning Mattresses"

  • Ad Variation B: "Save Now on Luxury Mattresses - Limited Time Offer!"

In this example:

  • Variation A focuses on the quality and the transformative aspect of the product, which may appeal to customers looking for a premium sleep experience.

  • Variation B emphasizes a time-sensitive discount, which may appeal more to bargain hunters or those motivated by the opportunity to save money.

These distinct angles can help determine if potential customers are more driven by product quality or price savings, providing valuable insights into consumer behavior.

Testing A Large Enough Sample Size

The reliability of A/B testing hinges on having a statistically significant sample size. The number of impressions and clicks each ad variation receives must be large enough to confidently assert that the results are not due to random chance.

For a product targeting a niche market, you might need to run the A/B test for several weeks or months to accumulate enough clicks for statistical significance. 

However, if you're targeting a broad market, you may gather enough data in a shorter time frame. In both cases, tools like statistical significance calculators can be used to determine when you've reached an adequate sample size.

Monitoring Results Over Time

A/B tests should be conducted over a period that accounts for fluctuations in user behavior, such as weekends versus weekdays or seasonal changes. This ensures the data reflects consistent trends rather than temporary spikes or dips.

If you launch an A/B test for a seasonal product right before the high season begins, the increased traffic could skew the results. Monitoring the results over a complete sales cycle is better to understand how the ads perform over time.

Use Data To Inform Future Tests

The insights from A/B testing should guide future marketing decisions and test designs. Analyze the data to understand why one variation outperformed another and apply these learnings to subsequent tests. This creates a cycle of continuous improvement in your PPC campaigns.

If Ad Variation B's CTA "Limited Offer!" increased conversions by 15% compared to Ad Variation A, you might infer that urgency is an effective motivator for your audience. 

Future tests could explore different ways to convey urgency, perhaps through limited-time discounts or exclusive product releases.

7. Maximize The Use Of Alternative Keywords

Alternative keywords are not just about finding different ways people might search for the same item; they are about understanding the nuances of language and the customer's intent. These can be broader or more specific phrases that reflect various user search behaviors and preferences. 

They can also tap into niche markets and address specific needs that are not as apparent.

Strategic Impact On Campaigns 

Employing alternative keywords effectively widens your funnel to capture traffic that might otherwise be overlooked. It allows for a more diversified approach, protecting your campaigns against the volatility of single high-competition keywords. 

Additionally, they can often have a lower cost-per-click due to less competition, allowing for more efficient use of your advertising budget.

Take the example of "running shoes"; alternative keywords could encompass a range of related interests or specifics like “trail running shoes for rainy weather” or “eco-friendly women’s running shoes.” 

Someone searching for “lightweight running trainers for competitions” may find your product if you've anticipated this need. 

This approach not only captures more traffic but also targets users with specific intents, which can lead to higher conversion rates as the product matches their precise needs.

8. Highlight The Right Products

Choosing high-sales products for your PPC campaigns can capitalize on proven demand. These products often have more reviews and a history of customer satisfaction, which can lead to a higher quality score in PPC algorithms, potentially lowering your cost-per-click. 

It's also beneficial to showcase any unique selling points (USPs) that these products have in the ad copy to drive clicks and conversions further.

Use Case

Let's use the example of a fictional company, "EcoFit," that specializes in eco-friendly fitness gear to illustrate.

EcoFit's best-selling product is the "EcoMat," a yoga mat made from sustainable materials with a high grip surface, which has been a market leader for the past year. In their PPC campaigns, they highlight EcoMat's popularity and its environmentally friendly USP. 

The ad copy emphasizes customer satisfaction, referencing the thousands of five-star reviews and the mat's ranking as the "#1 Sustainable Yoga Mat" in its category.

Leveraging High Conversion Rate Products 

Products with high conversion rates are indicative of effective market fit or attractive pricing strategies. These products, while they may not have the highest sales volume, convert browsers into buyers efficiently and can provide a better ROAS.

When optimizing PPC campaigns, it's important to analyze why these products have high conversion rates — is it the product features, price point, or perhaps the seasonality? Understanding these factors can help in crafting more compelling ad campaigns.

Use Case

Despite lower overall sales volume, EcoFit's "EcoBand," a set of resistance bands made from recycled materials, has an exceptionally high conversion rate. They've become a favorite among environmentally-conscious fitness enthusiasts.

The PPC campaigns for EcoBand target consumers looking for home workout solutions with high-intent keywords such as "sustainable home workout equipment," and the ads stress the product's durability and contribution to a greener planet, tapping into the eco-friendly values of the target demographic.

Launching And Promoting New Products

Introducing new products through PPC can be an excellent way to gather initial exposure. The key is to create anticipation and intrigue. 

Exclusive offers or limited-time promotions can encourage users to take advantage of the new offering. This strategy can also be coupled with influencer marketing to drive additional interest and traffic. 

For the PPC campaign, use high-quality images and persuasive ad copy that highlights the novelty and benefits of the new product. It’s also essential to closely monitor the campaign performance and quickly iterate based on customer response and engagement data.

Use Case

EcoFit is launching a new product, "EcoBottle," a reusable water bottle with a built-in filtration system, made from recycled plastics. 

To generate interest, they initiated a PPC campaign offering an introductory 20% discount. The promotion is highlighted in the ad copy with phrases like "Launch Special" and "Hydrate sustainably for less."

The ads are scheduled to run in the lead-up to Earth Day, capitalizing on increased environmental awareness, and they are targeted to environmentally conscious consumers who may be interested in their existing popular and high-conversion rate products.

In all three cases, EcoFit utilizes its PPC campaigns to showcase different product strengths to the same target audience: eco-conscious fitness enthusiasts. 

The EcoMat leverages its established market presence, the EcoBand emphasizes its niche appeal and high conversion efficiency, and the EcoBottle uses a strategic promotion to encourage initial sales and market penetration.

Conclusion: How To Optimize Amazon PPC

Optimizing your Amazon PPC campaigns is crucial for success as a platform seller. With these techniques, you can continuously improve your campaign performance and increase your chances of success.

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Ready to enhance your grasp of Amazon PPC? Delve into these informative articles: How Much is Amazon PPC, Best Amazon Analytics Tools, and Advanced PPC Strategies. Explore and expand your knowledge!

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Frequently Asked Questions: How To Optimize Amazon PPC Campaigns

How Do I Set A Budget For My Amazon PPC Campaign?

Start by determining your overall monthly ad spend, then divide it by the number of campaigns you plan to run. Consider your target ACoS, product margins, and sales goals to allocate your budget effectively.

How Can I Improve My Keyword Targeting?

Improve your keyword targeting by conducting thorough keyword research using tools like Amazon's own auto-suggest feature and third-party platforms. Analyze your competitors' keywords and refine your list by testing various match types (broad, phrase, and exact) to identify top-performing terms.

How Do I Identify High-Performing Keywords For My Amazon PPC Campaign?

Conduct thorough keyword research using tools such as the Amazon keyword tool, Google Keyword Planner, and third-party tools. Analyze keyword performance metrics such as search volume,

What Are Negative Keywords, And How Do I Use Them In My Amazon PPC Campaign?

Negative keywords are those you don't want your ad to appear for. Use negative keywords to refine your targeting and avoid irrelevant clicks. 

What Is PPC Optimization On Amazon?

PPC optimization on Amazon involves refining advertising campaigns to improve performance and ROI. This includes adjusting bids, selecting relevant keywords, structuring campaigns effectively, and improving product listings to enhance ad relevance and conversion rates.

How Often To Optimize Amazon PPC? 

Amazon PPC should be optimized regularly, with a thorough review and adjustments made at least once a week. During peak seasons or promotional periods, more frequent optimization may be necessary to maintain competitive ad placements.

What Is PPC Optimization? 

PPC optimization is the process of adjusting and testing various components of pay-per-click advertising campaigns to achieve specific goals, such as maximizing click-through rates, conversions, and overall return on investment, while minimizing costs.

How Do I Optimize My Amazon Ad? 

To optimize your Amazon ad, conduct regular performance analysis to identify successful elements, adjust bids and budgets based on data insights, refine your keyword strategy, and continually test different ad creatives and landing pages for the best results.