How to optimize Amazon Ads

Basic terms: What is Amazon PPC?

Amazon Advertising is billed according to the PPC principle. PPC stands for “pay-per-click.” You only pay if the ad actually generates traffic, i.e. is clicked on. PPC campaigns aim to increase the visibility of products and Amazon stores in order to ultimately increase sales figures. PPC campaigns can be created in Amazon Seller Central or Vendor Central. For optimized management, you should get help from a professional Amazon PPC agency when creating and managing campaigns.

Optimizing Amazon Ads: The different formats

PPC campaigns can be run on Amazon in three formats.

Sponsored Products

Sponsored Product advertises individual products. The ads are shown in search results and are therefore shown to people who might be interested in your products. With Sponsored Product Campaigns, you increase the visibility of your products.

Sponsored Brands

Sponsored brands campaigns promote your brand and not just individual products. These ads are shown to potential customers in search results and are aimed at directing them to your Amazon Store. This advertising format can be displayed as a banner or video ad.

Sponsored Display

The third format for Amazon Ads is Sponsored Display. The ads are displayed not only on Amazon, but also on other websites to direct potential customers to your product pages. Sponsored Display ads can also be displayed on pages of similar articles. In this way, your products are presented to potential buyers who are currently or in the past looking for a similar product.

Amazon PPC costs

The costs for Amazon PPC campaigns cannot be calculated as a flat rate. This is because these are determined by how long the ads are placed and how large the target group is. In addition, ads are more expensive when there are many providers for similar products. The advertising spaces for the corresponding keywords are then highly competitive and the top rankings are awarded to the highest bid. However, cheap keywords start at around 30 cents per click.

You should always consider the costs of PPC campaigns as a long-term investment. Because a strategically well-designed advertising campaign can also improve your organic ranking and your sales figures develop positively beyond the end of the campaign.

However, the costs of PPC campaigns should of course be used efficiently: By optimizing your Amazon Ads, you can reduce costs and increase your sales success. Specialized Amazon agencies such as Faru offer you professional support.

Optimize Amazon Ads: The most important key figures

To optimize your Amazon Ad campaigns, you need to look at the key metrics for success on Amazon and put them into context. This is the only way you can optimize your Amazon Ads based on data.

impressions

The impressions show how many people saw the ad. The aim of every ad campaign is, of course, that the ads are shown to as many people as possible, but above all to the right people. To do this, the campaign must be specifically tailored to the target group. The following key figures illustrate that targeted targeting is more important than the mere number of impressions. Because when an ad is shown to the wrong people, it sticks to the first impression, but clicks don't make it.

clicks

It is only the clicks that provide information about how often the ad actually led to a product call. The goal of every ad campaign is therefore, of course, many clicks. If the ad is only rarely clicked even though the impressions are high, the targeting should be reviewed and, if necessary, specified. Perhaps the design of the ad should also be reconsidered.

Click-through rate (CTR)

The click-through rate (CTR) gives you information about how many impressions actually led to a click on the offer. The CTR should of course be as high as possible, because only then does displaying the ad actually ensure that potential customers land on your product page.

Conversion rate

The conversion rate indicates how many clicks on the offer ultimately generate sales. A low conversion rate indicates that your product listing isn't appealing enough. Then consider revising photos or the product description to convince more customers to buy. A low conversion rate is also annoying because the main goal of the PPC campaign, more sales, is not achieved.

Cost per click (CPC)

Cost per click (CPC) is another name for pay per click and indicates how much a click has cost. The advantage of Amazon's PPC campaigns is that you only have to pay when your ad actually results in a click on the offer. The prices per click vary. If a market is very competitive, one click is significantly more expensive than for products with only a few competitors. If there is a very high demand for top rankings for particularly popular search terms, the highest bids get the first places.

However, the aim is actually to have the lowest possible CPC as a seller or vendor. In addition to the number of competitors, the size of the target group can also influence the CPC. The more detailed the target group is selected, the more expensive the CPC usually becomes. In return, you can reach more precisely the people who are more likely to be interested in your product.

Advertising Cost of Sales (ACoS)

ACoS is the abbreviation for Advertising Cost of Sales, in German: attributed sales costs. This value is relevant to assess the profitability and thus the efficiency of your ad campaign. The ACOs indicate how many advertising costs you have invested in relation to sales.

The aim is for the share of advertising costs to be as low as possible, i.e. for ACoS to be as small as possible. Because ACoS reduce your margin. If you have a margin of 20 percent and ACoS that are also 20 percent, you won't make any profit from the ad. Of course, advertising costs shouldn't completely eat up the margin — at least not in the long run.

In the short term, however, it may make sense to even operate in a slightly loss-making manner. This is because by selling a lot of brand attention through ad campaigns, you will secure good organic rankings, which will result in your products achieving strong sales in the future even without ad campaigns. For example, high ACoS for a short time can be a very worthwhile investment in the long term. This ratio of advertising costs to total revenue (advertising revenue + organic turnover) is then referred to as the total advertising cost of sales (TACoS).

Return on Investment (ROI)/Return on Ad Spend (ROAS)

The return on investment (ROI) (or, in the case of PPC campaigns, more precisely: return on ad spend) indicates how much revenue you generate from the advertising costs you use. The aim is, of course, that for every euro spent on advertising, a multiple of the turnover generated by the advertised products. ROI is therefore a key factor for measuring the success of ad campaigns.

Optimizing Amazon Ads — Requirements

The aim of every ad campaign is the highest possible return on investment. To do that, you need to optimize your Amazon Ads. Before you can start, however, there are a few requirements that must be met. Because it is not just the design and control of the ad that determines your success.

Optimize product data

When you choose a product to promote, the product data should be optimized. This means that your product is attractively presented with good images and a meaningful product description. Because it is only worthwhile to invest money for clicks if the offer is also convincing. Otherwise, there is a risk of a low conversion rate and the ad will come to nothing.

Data availability

Before you can optimize an ad campaign, you need enough data. To do this, you should wait at least two weeks before drawing an initial conclusion about your Amazon PPC campaign. Based on data, conclusions for optimizations can then be drawn.

Optimize Amazon Ads with SEO

Amazon SEO is an important lever for success on Amazon. SEO stands for search engine optimization, and at Amazon is based primarily on the selection of the right keywords. The use of relevant keywords is not only decisive when managing ad campaigns, but the ranking is also influenced by keywords. To do this, the relevant keywords for the product to be advertised should be identified using an appropriate tool. A specialized Amazon agency like Faru can help you with this.

The most important keywords should be included in the title and bullet points of the offer. In addition, backend keywords can be added that are not visible to customers but have an influence on the ranking. For example, translations of relevant keywords, rare synonyms and obvious spelling mistakes can be used here. Singular/plural forms of search terms do not have to be stored, as Amazon automatically takes them into account.

Optimize Amazon Ads — Options

Optimize Amazon Ads — Options

Targeting

Targeting is about the orientation of the ad campaign. There are basically three options for this:

• Keyword targeting: The ads are targeted at specific keywords and appear when people search for them on Amazon.
• Product targeting: Here, ads are placed directly on product pages and thus shown to people who could very likely be interested in your product. This allows you to place yourself directly on competitors' products, i.e. also promote your own alternative products (e.g. another model).
• Category Targeting: Amazon places ads in categories.

Targeting can be done both manually and automatically. With manual targeting, you can choose for yourself which keywords, products, and categories are selected to serve ads. However, a detailed analysis is required here in order to actually efficiently manage the ad campaign. It is best to get help from a specialized Amazon agency such as Faru to create an exact manual campaign. Alternatively, you can have the ads automatically controlled via Amazon. However, this is usually not as specific to the target group as exact manual targeting by an agency.

Choose the right keyword types

When it comes to keyword targeting, choosing the right keyword types is crucial. Amazon differentiates in terms of exact, phrase and breadth.

Exact means that the ads are played out exactly for the keywords that were specified. Only plural, uppercase and lowercase letters and umlauts are automatically included.

Keyword phrases consist of at least two words, but they must always be used in exactly the same order. “Women's sunhat” can therefore lead to different results than “women's sunhat.”

To work around this issue, select the Wide match type. Here, the ad is also played out for different combinations of the keyword. The downside is that the ad is less specific. If the keyword “sun hat” is broadly applied, the ad will be played equally on the search queries “sun hat women” and “sun hat men.” As a result, the ad will also be shown to people for whom it is less relevant.

Which keyword type is the right choice depends on your product. To optimize your Amazon Ads, we'll take a close look at which option is best for your goals. As a rule, a combination of several keyword types is suitable for a campaign.

Exclude negative keywords

To optimize ad campaigns, it is also important to identify and exclude negative keywords. You can exclude exact terms or phrases. For example, if you sell a sunhat for women and find that your ad campaign is being targeted at the keyword “sunhat men,” you can add “sunhat men” as a negative keyword. People who search for that keyword won't see your ad anymore. This increases the accuracy of your campaign and lowers costs.

Let Faru optimize your Amazon Ads!

If you too want to run more successful PPC campaigns, let Faru help you optimize your Amazon Ads. Simply ask for our individual Amazon service!