A couple of weeks ago, Teikametrics CEO and former top Amazon seller, Alasdair McLean-Foreman, did a webinar focusing on best practices for Optimizing Amazon Sponsored Product Ads. There were several questions during the webinar that we weren’t able to get to, so we thought we would compile all of the questions and answer them for you in this blog post. We did our best to answer each of your questions, but if you would like us to go into more detail on a particular topic, please let us know in the comments section below.
Q: Do you know if Amazon is working on showing Sponsored Products for Apple devices, and others, such as Android phones and tablets?
A: This is a great question, but unfortunately Amazon has not released any information on upcoming changes for Sponsored Product Ad eligibility.
Q: What do you find the average conversion rate is for the Amazon Sponsored Ads? Also, do you have any data on the average cost per click for different categories?
A: Our goal for our customers is to have their advertising cost of sales (ACoS) between 10-15% (if you have higher than average margins, this percentage can be higher). This percentage can be calculated by dividing your total spend by total sales.
To answer your second question, the average cost per click depends on each product and how much competition there is rather than per category.
Q: If a customer searched for a keyword, clicked on a PPC ad and purchased, it should tell Amazon that the product is very relevant for the searched keyword. Does Amazon’s algorithm favor sales through campaigns more than organic non-PPC sales, when moving the listing closer to the first page of the search result for a given keyword?
A: If you generate sales through the PPC ad, then your ranking will naturally favor higher in Amazon’s algorithm.
Q: Our products have size and color variations. Currently we can only run our campaigns by each child ASIN. Is there any way we can run a campaign for a parent ASIN so all children are exposed?
A: The more child ASINs you have, the better chance you have to list on an ad. If you create an ad group and enter all child ASINs, Amazon will rotate the pictures.
Q: How do you know what the best bid is for keywords?
A: The best bid for keywords depends on your strategy. If you want to be on the first page, you will want to bid above Amazon’s “estimated page 1 bid.” If you want to rank somewhere within the first five pages, your bidding price can be a lot lower.
Q: How can I drive traffic from Amazon to my own website using Amazon Sponsored Product Ads?
A: Unfortunately, you aren’t able to do this through Sponsored Product Ads. Amazon has a program called “Amazon Product Ads” which allows this, but they are discontinuing this program as of October 31st of 2015.
Q: If sales data in a campaign isn’t accurate for up to 1 week, do you have to pause a campaign for 1 week before analyzing the results?
A: You can continue to run your campaign, but wait to analyze the results. According to Amazon, the sales data should be accurate within 48 hours.
Q: What’s the formula for the Gross Margin?
A: In order to find your Gross Margin, you would subtract your cost of goods sold from the total revenue.
Q: What is the difference between Broad, Phrase and Exact?
A: The table below does a great job of explaining the difference between broad, phrase, and exact:
Q: Is there a way to be notified when the daily budget has been reached?
A: Unfortunately, there is no email notification capability. Your campaign will say “ad out of budget,” and your ad will stop running.
Q: How do we determine an initial bid in auto and manual campaigns?
A: The initial bid is dependent on your budget and will be based off of how much you want to spend. You can try starting at 20 cents and go in and make adjustments for the first page bid. In addition, you would want to look at each individual keyword rather than giving all keywords the same bid price.
Q: If you have an ASIN that has multiple variation options, would you list just the main parent ASIN on Sponsored Product Ads or all of the ASINs?
A: You have to enter all of the child ASINs. You are not allowed to select a parent ASIN.
Q: Does adding more child ASINs in the campaign work for or against the targeted keywords?
A: It depends on the nature of the child. If it’s a completely different category then it would work against you, but if it’s similar then it would work for you.
Q: With products that have a lot of clicks but no sales, what is the strategy?
A: Try improving your product page and other factors that may help with conversion. Make sure you are using high quality photos, and are optimizing your description and bullet points. It’s also important to monitor your product reviews.
Find out some tips for building a more compelling product listing here.
Q: Can you please elaborate more on your statement: “No delivery conflict with bidding with the same SKUs?” Are you saying that I could run 2 different campaigns for the same SKU without costing extra ads fees? I was afraid of double ad cost for a duplicate keyword in 2 different campaigns.
A: This statement refers to the fact you can’t compete against yourself by running two different campaigns. You only pay per click, so you won’t necessarily be paying more.
Q: How can I publish Sponsored Ads on Amazon.ca?
A: You can sign up for Amazon Sponsored Product Ads here.
Q: Would you agree that there is a halo effect on advertising, almost like free brand exposure, in that the lift from advertising is greater than the spend..ie. If you spend $1k and generate $3k and run it for a while, once you stop you will drop more than the $3k in sales (i.e. lose the brand lift). If you agree, have you ever quantified this halo or lift?
A: In theory, Sponsored Product Ads get more people to buy your product, which in turn would boost your rankings. Once you stop running the ads, you will not necessarily see a drop in rankings. This is because a lift in conversions results in a lift in sales rank, and a better ranking in keywords.
You can definitely try this and monitor your sales rank, it would be an interesting experiment.
Q: What are the minimum recommended numbers to start using Teikametrics in terms of number of SKUs, minimum sales volume, or revenue?
A: We typically recommend at least 30 SKUs for brands that work with through our Brand Accelerator Program. For our Insite for FBA software, we recommend at least $50,000 per month in revenue.
Q: I understand that Amazon considers the bid amount and the keyword relevancy when deciding on the number of product impressions to give to that keyword. Does it also consider the historical keyword performance in terms of clicks (but not purchases)? Is the historical performance reset for a new campaign or does Amazon consider historical clicks from previous campaigns?
A: Amazon will consider the highest bidding price to determine if you will be shown on the first page. If you search for a keyword, and your campaign shows up on the side of the page, that’s an impression.
Q: I noticed that campaigns with a large number of keywords (100+) have less impressions than a campaign with a small number of keywords. Also, gradually adding keywords to a campaign rather than creating a large campaign right away seems to perform better. Are you aware of this behaviour?
A: Finding 100 relevant keywords for a product is difficult and this scattershot approach means a lot of wasted spend. It’s best to start out small to see which keywords work best for you, as you’ve noted!
Q: What’s the most efficient way to select the most relevant top key words for our campaign?
A: You can try using different keyword tools like the ones listed in this post. Or, try looking at similar products that are highly ranked and use some of the same keywords they are using in their product listing.
Another trick is to search for a particular keyword and look at what pops up in the search bar. These will be the most searched for terms related to that keyword. Here is an example:
Q: So what percentage of sales would you expect a good campaign to make in a one month period?
A: We recommend anywhere around 10-15% ACoS, but this depends on your margin. If you have a 50% margin, you might be willing to spend 30% on advertising.
Q: Does Amazon treat FBA Sponsored Products differently than merchant fulfilled? Should they be bidded on differently?
A: Amazon does not treat merchant fulfilled products differently than products fulfilled by Amazon, and this shouldn’t affect your bid.
Q: I run one campaign for a given keyword and it gives me 1000 impressions a day. If I start another campaign that has the same keyword, same product, and same bid amount, I may get a lot more impressions. Why would that happen?
A: There are a lot of factors that could play into this, and we would need more information to better answer this question. It could be that there is more competition when you are running that first campaign, or the seasonality of the product.
Q: What are the various tests and conversions to boost overall sales?
A: You can try testing out different keywords as well as different bids. Increased conversions will in turn boost your sales rank.
Q: Price of Amaze?
A: Amaze Analytics is available as an add-on to our Professional package. Click here to access our pricing sheet.
Q: I have a new brand of gluten free breads i want to promote- do you suggest i do both a manual and automatic Sponsored Product campaign? Also I have 4 different items under our own private brand. Should I do 1 Sponsored Ad for each 1/4 items? Should I do one item at a time? If I choose to make a Sponsored Ad for all 4 items should I do both auto and manual?
A: Starting out slow is best so that you can see which keywords or bids are getting you ad placement. It’s up to you whether to do an automatic or manual campaign, but you are able to run them both at the same time. An automatic campaign allows Amazon to pick keywords for you, so this can be a good way for you to experiment with different keywords and see what works for you.
Also, if they are all on the same listing, you can run one campaign including all of the child ASINs. Or if they are on different listings, make sure the keywords are very targeted.