If you are looking for a way to drive traffic to your Amazon listing and increase sales, you might want to consider Amazon’s pay-per-click (PPC) advertising program, Sponsored Products. In 2015, Sponsored Products ads were responsible for over $1.5 billion of sales on Amazon.
Sponsored Products is a targeted advertising program within Amazon Seller Central that gives sellers the opportunity to market their products in order to reach more users.
Setting Up Your Campaign
Setting a Bid
Amazon Sponsored Products uses an auction system to determine which ads to display. A bid is the maximum amount you want to pay for a click on your ad. Amazon takes this into account in addition to keywords relevance, when determining the “auction winner.”
Keep in mind, you will not be charged a bid unless a customer clicks on your ad.
You will notice that Amazon includes their “suggested bid.” This should just be used as a benchmark to gauge the performance of the market, as it is not updated in real time.
If a bid is at a set amount that Amazon is estimating, it’s important to take into consideration that there could be hundreds of other sellers bidding against that keyword. With that in mind, it’s crucial to make necessary adjustments based on the specific category, as well as your competition, in order to either increase or lower your bid based on Amazon’s page one estimate.
Amazon sellers have two types of campaigns to choose from with Sponsored Products: automatic and manual.
This is the most popular campaign type, and it’s great for beginners who aren’t too familiar with the intricacies of PPC campaigns yet.
Automatic campaigns are broad in nature and they don’t use keywords. Unlike manual campaigns, automatic campaigns are fueled from the product listing itself. This means that the quality of your product page will determine the success of the PPC campaigns.
There can be a downside to automatic campaigns. If you have a poorly optimized product page, you may not reach sales goals that you are trying to achieve.
Lastly, it’s important to consider the use of negative keywords. The use of negative keywords will allow you to negate certain customer terms that you do not want your product to be sponsoring for.
For example, let’s say you are selling winter boots and you want to avoid sponsoring for search terms that include ‘Sorel.’ You should be using “Sorel” as a negative search term, so that when the customer searches for that specific brand your product will not be sponsored.
Negative search terms can be used for manual campaigns as well, but they’re especially crucial to automatic given the limited specificity that automatic campaigns offer.
With manual campaigns, you’ll want to target specific keywords. This includes broad match types, phrase match types, or exact keyword match types.
- Broad Match: This match type offers the most broad traffic exposure (hence the name), and will be matched with similar customer search terms. The terms can appear in any order.
- Example keyword: Yoga pants
- Example customer search term: Women’s exercise pants, Yoga clothes
- Phrase Match: This match type will match with search terms that include the exact phrase or close variations that add on 1-2 additional keywords. These keywords must appear in the same sequence.
- Example keyword: Yoga pants
- Example customer search term: Black yoga pants, Yoga pants size 2
- Exact Match: With this match type, the customer’s search term must include the exact phrase or close variations of the exact phrase, such as a pluralization or adding punctuation. While this match type is the most narrowly defined, it will also be the most relevant to a customer’s search.
- Example keyword: Yoga pants
- Example customer search term: Yoga pants, Yoga pant
For each individual manual campaign, you are allowed up to 1,000 keywords per ad group. These keywords can be added one by one or by using Bulk Uploads.
Strategy: How to Structure Your Campaigns
There are various ways that you can manage Sponsored Products in order to help build your brand’s identity and reach more customers on Amazon’s platform.
Most Amazon sellers choose to have one type of campaign running at a time. However, we recommend using an equal balance of both automatic and manual campaigns.
A lot of Amazon sellers will group their products into one general automatic campaign, or one general manual campaign. These campaigns often experience very high Advertising Cost of Sales (ACoS) and a low amount of sales, because Amazon is pairing your products with irrelevant keywords.
Within the campaigns themselves, we recommend that you split out ad groups by product-specific attributes. For example, if you sell mattresses, you would have one automatic campaign and one manual. Within those two campaigns, break up the ad groups by a more specific product attribute such as size or material type.
This will allow for greater keyword relevancy toward customer search terms.
Use Your Campaign Results to Optimize Your Product Listings
Use your automatic campaigns to drill down and see what customers are actually searching based on your product listings.
You’re also able to see if your products are converting in automatic campaigns, and use that information to optimize your listings with content catered to your findings.
Manual campaigns are ongoing campaigns that allow you to continually add new keywords based on relevant customer search terms. You can find these relevant search terms from the search term reports generated from the manual campaigns or the search term reports generated from the automatic campaigns.
Advertising Cost of Sales (ACoS) Targets
ACoS is the percent of attributed sales spent on advertising. ACoS can help you measure the effectiveness of your Sponsored Products campaigns relative to your advertising goals. This is calculated by dividing total spend by total sales.
At Teikametrics, we believe that are two ways to view ACoS.
1.) Customer Acquisition Strategy
Think less about having a low ACoS, and worry more about driving as much traffic to your pages as possible.
2.) Return on Investment (ROI)
Strive for an ACoS that’s below the adjusted gross margins of your products after FBA fees. This way, you can make sure you’re not affecting your bottom line with additional marketing spend for these campaigns.
Results: Impact on Ranking
Along with running Sponsored Products campaigns comes a natural cycle that has a beneficial effect on your ranking.
Sponsored Products will naturally drive more sales, which will increase your conversion rate, which in turn will increase your search ranking.
Even if your product is consistently ranking at the top of search results, it’s important to keep running Sponsored Products. Amazon is an extremely competitive marketplace and what’s ranking high one day may not rank well the next.
Whether you’re selling a new product that you want to sell more of, or you jus want to get more exposure for your brand, consider using this important marketing tool for products.