EPIC Amazon PPC Ads Guide: 9 Minutes To 9X Sponsored Product Sales

For most Sellers, Amazon PPC is like having installed a GIANT MONEY-FLUSHING toilet that’s making your wallet slimmer hour after hour…

It’s really common to be disappointed with the performance of your Sponsored Product Ads.

They either don’t generate any traction, or cost too much that are simply not worth it.

But what if there was a way to consistently generate record-breaking levels of sales through PPC, without the fear of suffering a loss?

In order to get to that level, you need to do 2 simple yet important things.

You must:

1. Understand the fundamentals of Amazon PPC Sponsored Ads

It’s ridiculous to expect that you can do something well if you don’t know how to do it.

Remember the first time you tried to drive a car?

Unless someone taught you the fundamentals, you wouldn’t know what exactly you need to do.

You may had some intuitive idea, however you had to be taught the fundamentals so you can drive safely.

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It’s the same with Amazon PPC.

Not knowing the fundamentals is like trying to drive a car based on pure intuition, ignoring the basics and the rules.

This would put you and others in serious risk.

When you don’t know the basics and rules of Amazon Sponsored Ads, you put your business in risk the moment you set up your ad campaigns.

Hence why, a large part of this guide is going to take you through the fundamentals.

2. Use a reliable PPC strategy guaranteed to bring outstanding ROI

What are you going to do?

Just drop a few keywords from Merchantwords, set a bid and wait?

Are you actively going to be monitoring your ads? How often should you rotate keywords?

When is the right time to stop a campaign?

Should you run manual or automatic?

How high should you bid? What’s the best bid to guarantee placement without draining your wallet?

These are all justifiable concerns, and if you don’t have a strategy so that you know what you are doing, you are pretty much screwed.

Unless you can confidently answer all these questions, the odds say you don’t know what you are doing.

If that’s the case, you have turned your Amazon PPC Sponsored Ads to a giant money-flushing toilet, that’s making your wallet slimmer day after day.

Amazon PPC Ads Sell Your Products For You Even When You ZZZ, But Are You Using Them Correctly?

You must be a master of the fundamentals.

When Phil Jackson was Michael Jordan’s coach he used to put Michael and the rest of the team do basic footwork and passing exercises, as if they were some little junior high school team.

These were NBA pros, the best of the best and they were asked to practice basic exercises.

Can you imagine why, and how that relates to your Amazon Business?

Mastering the fundamentals is the key to succeeding in any field, and most people pay so little attention to mastering the basics.

This can be really costly.

So, the first thing you need to do before diving into advanced PPC Sponsored Product strategies is to master the basics.

Then, you can use Amazon PPC to make money while you ZZZ.

So, which are the fundamentals of Amazon Sponsored Ads?

Customer Search Term VS Keywords

These are very often confused.

Although they are pretty much a different name for the same thing, there is a small difference between them.

Search term: A word, or a series of words, searched by a customer on Amazon.

Keyword: A keyword is a word or series of words you bid on in the campaign manager, if you want your PPC ads to display against specific search terms.

Types of targeting: Manual and Automatic.

Amazon has two distinct ways to target your ads: Manual and Automatic.

It’s recommended that you start your first campaign with Automatic targeting.

This allows Amazon to display your ads in relevant customer searches automatically. It’s a really quick and easy way to discover the keywords people are using to find your ads.

What’s the difference?

So, which is better?

None.

The type of your campaign depends on your desired objectives as well as on convenience.

For instance, for manual campaigns you have to provide your own keywords. You can adjust the bid for each keyword which gives you greater flexibility.

For automatic campaigns, you must set a universal bid for ALL the keywords Amazon will find for you.

What’s the best practice?

We will talk about best practices shortly after explaining the fundamentals.

Just hang on a little bit.

Bid:

The bid is the maximum amount you are willing to pay for a click on your ad.

You only pay if your Ad is clicked.

You don’t always pay the maximum amount.

If you set a bid of $1.00 per click, this is just the maximum you are willing to pay. You might also get clicks for $0.70 or $0.55.

Category winning bid:

Each Amazon category has different recommended winning bids.

Just a word of caution: this data comes directly from Amazon. It was compiled years ago and Amazon hasn’t updated it, so it might be a little outdated in some occasions, with the actual winning bid being much higher.

You may also choose to be more aggressive and bid higher, or be more defensive and bid lower.

Buy Box PPC Limitaton:

If you are competing with other sellers on the buy box, your ads will NOT display unless you are winning the buy box.

If you are a private label seller and sole distributor of your product, this is not a concern.

When to review the results:

It’s important to review your advertising performance at least once or twice per week so you can evaluate your performance and measure success.

The longer the timeframe, the more data you have and the better you can evaluate performance.

The minimum recommended amount of running a campaign before judging its performance is 1 week.

ACoS (the most important metric of Amazon PPC):

Percent of attributed sales spent on advertising.

Divide your “Spend” by your “Sales” and you have ACoS.

(Spend/Sales = ACoS)

amazon ppc ads

In this example for instance we have 1,735.35 (spend) / 5,209.55 (sales) = approximately 0.33 or 33% ACoS.

The LOWER your ACoS is, the better.

ACoS is a very important metric because it helps you understand the return on your ads.

Very often, people want to know what’s the best ACoS to shoot for.

However, this question cannot be answered unless the answer is given based on the specific circumstances and goals of a Seller.

This means that MY ideal ACoS could be 40% and that number could generate me more sales, repeat customers and visibility, even though you have a phenomenally better ACoS of 25%.

It’s all measured in the relative context of your specific situation.

Here are some important variables to consider before judging your ACoS:

  1. What are your margins on the advertised products?
  2. What is your advertising budget?
  3. What are your sales goals?
  4. Do you want to generate demand?
  5. How important is it to boost visibility and brand awareness?
  6. Are you comfortable spending more to attract new customers and repeat purchases?

Your business objectives can help you determine your goal ACoS.

Don’t worry.

I am going to show you the exact way to determine the most profitable ACoS for your ads, that’s guarantee to ALWAYS make a profit.

Just keep on reading.

What MATCH TYPE Should You Use?

There are three keyword match types:

  1. Broad
  2. Phrase
  3. Exact

By default, the chosen match type is set to broad.

BROAD MATCH: It allows your keyword to reach the widest audience. It displays your ad for that keyword or a variation of it.

For instance, if a customer searches for “red women’s sunglasses”, your ad will be displayed if you’ve targeted these keywords:

  • sunglasses
  • women’s sunglasses
  • red sunglasses
  • sunglasses for women red
  • red women’s sunglasses

But it will NOT show up for these keywords:

  • men sunglasses
  • yellow sunglasses

PHRASE MATCH: It allows your ad to show up only when the customer searches the exact sequence of words you are targeting, but it may include additional words too.

For instance, if a customer searches for “red women’s sunglasses”, your ad will be displayed if you’ve targeted these keywords:

  • women’s sunglasses
  • women sunglasses
  • red women’s sunglasses
  • red women’s sunglasses cheap
  • high quality red women’s sunglasses

But it will NOT show up for these keywords:

  • red sunglasses
  • women’s sunglasses red

While phrase match is more restricted, its benefit is that it allows for more precise targeting.

EXACT MATCH: It allows your ad to show up only when the customer searches match to the exact keyword string  you are targeting.

Close variations may be included.

However, this is a very very narrow and specific type of targeting.

For instance, if a customer searches for “red women’s sunglasses”, your ad will be displayed if you’ve targeted these keywords:

  • red women’s sunglasses
  • red women sunglasses

But it will NOT show up for these keywords:

  • red sunglasses
  • sunglasses
  • women sunglasses
  • designer red sunglasses for women

Break Into The Top Ranks Of Successful Amazon Sellers, With These Million Dollar PPC Strategies

First and foremost, you must understand the following rule:

As long as you are breaking even or making a tiny profit, you should continue running your ads to infinity.

Why is that?

That’s because this rule serves ALL the objectives of the Amazon PPC Ads.

The 5 holy objectives of running Amazon Sponsored Ads are the following:

  1. Make profit
  2. Turn sales into reviews
  3. Turn sales into repeat customers (cross-selling other products after the sale)
  4. Generate brand buzz
  5. Increase your keyword rankings (each keyword click that converts to a sale reinforces your organic rankings for that keyword)

So, even in the case you are breaking even or making pennies, you are still hitting goals 2,3,4,5.

Doing so is MORE valuable over the long term, than making some profit right now.

It’s funny that people run Amazon PPC Ads thinking the goal is the sale and making profit.

There is so much more than that for the savvy Amazon Seller.

The profit you make for each PPC ad generated sale is just like the cherry on top of the pie.

If it happens, then awesome. If not, it doesn’t really matter!

Actually, the side effect of focusing on goals 2,3,4 and 5 is BOOSTING profit and reducing ad dollars spent!

Here is why:

When you turn sales into reviews, each review makes it more likely that a future PPC ad generated click is going to convert.

If you start your PPC ads with 10 reviews, and after a few months you end up having 250, then your conversion rate is going to increase dramatically.

When you used to convert 1 out of 10 clicks into a sale, now you are going to convert 4 out of 10.

And this will lead to even MORE reviews.

As you see, the more momentum you build with PPC, the more successful you are going to become.

Amazon PPC Ads are all about momentum.

Think now about Goal #3: turning PPC generated sales into repeat buyers.

If your customer is satisfied and you successfully cross-sell another product to them, you are making another sale without having paid anything for it.

It’s organic.

Or you may not have a 2nd product yet, but the customer might tell a friend of theirs about the wonderful experience they had with your product.

And then their friends buys your product too.

Perhaps both could happen (cross-selling and recommendation to friend!)

All because of a PPC generated sale!

Now, think about Goal #4: generating brand buzz.

As your ad shows up repeatedly in the search results, people start noticing you and become more and more familiar with your brand name.

The results of this do not manifest immediately, however they have immense positive impact on your business over the long term.

How do you think that brands like Anker have managed to make tens of millions of dollars a month on Amazon?

They created brand awareness. People are familiar with the brand, they trust them and feel safe buying from them.

Last but not least, think about Goal #5: increased keyword rankings.

This is perhaps the best indirect outcome of Amazon PPC Ads. Each sale you make “validates” your listing in the eyes of Amazon’s algorithms.

The more you sell, the more Amazon starts “trusting” you. Therefore, they start boosting your keyword rankings and giving you more and more free exposure.

As long as your products are not being returned and customers do not leave complaints, you keep ranking higher and higher for multiple keyword terms.

In the end, running Amazon PPC Ads results to you ranking high for several major keywords, and thus boosting your organic sales!

Which as a result boosts your reviews and repeat sales and brand awareness.

Everything works synergistically in a way that builds momentum for your brand.

Before you know it, you are the king of your industry and all because you had the right Amazon PPC strategy!

 Amazon Sponsored Ads Are The Hidden Treasure Of Explosive Long Term Profitability For Your Amazon Business

It’s really unfortunate that sellers misunderstand the true influence that Amazon PPC can have.

Instead of using it as a weapon to turn their business into a multi-million dollar enterprise, they are thinking about making $5000 more in sales next month.

Fortunately, you know better than them after having read half of this guide.

But what’s the next step? How do you pull this off?

Charlie Munger, the billionaire partner of Warren Buffet (2nd richest man alive) recommends that you use the principle of Inversion.

Instead of asking yourself “How can I make my Amazon PPC Sponsored ads work as successfully as it’s humanly possible” you should instead be wondering “What are the 1-2 things that are absolutely certain to ruin my PPC ad campaigns?”

If you eliminate what you shouldn’t do, you are pretty much left with what you should do.

There is absolutely NO possibility of failing when you think like that.

So, which are really the 1-2 things that might destroy your ads performance?

I will give you 2 serious blunders you should avoid making, that may cost you TENS of thousands in lost sales and misused PPC ad budget.

  1. Poor product presentation
  2. Not calculating your break-even ACoS

If you’ve read our master guide on how to take your business from $0 to $410k in sales and beyond, you should know how Product Presentation is one of the 3Ps of Amazon Business.

Think what’s the main function of Amazon PPC Ads.

They drive traffic to your product listing, right?

Therefore, you may be able to drive tons of traffic, get insane exposure through Amazon PPC, and then have terrible conversions.

So, no matter how effective your Amazon PPC ads plan is and how spot on your keyword targeting, everything will fail if your Product Presentation does not convert traffic into sales.

“But, I thought you said sales is not the main focus. There is brand awareness and …”

NOPE!

What I said is that instant profit is not your focus. Definitely your focus are increased product sales.

Without sales you get no reviews, no cross-selling or word of mouth marketing and no increased organic keyword rankings.

Here is where everybody goes wrong about Amazon PPC ads…

They are too focused on driving traffic and too sloppy when it comes to increasing their conversion rate.

What’s the point of paying for advertising and getting visitors if you cannot persuade them to buy?

Wasted money.

Everybody’s efforts are 90% on PPC and 10% on product listing.

Your efforts should be 25% on PPC and 75% on product listing!

Even if you did the CRAPPIEST advertising targeting and campaigns in history, but converted high enough, you would have done better than someone who drove massive traffic but zero conversions.

With PPC, you must focus on conversion, not traffic.

  • If you get 50 clicks a day, and convert 25 that’s fantastic.
  • If you get 500 clicks a day and convert 40, that sucks compared to the above example.

Twenty five out of fifty is a 50% conversion rate, whereas forty out of five hundred is an 8% conversion.

Let’s assume that both sellers sold a $10 product and paid exactly $1 per click for their Amazon PPC ads.

  • The first seller would have spent $50 and generated $250 in sales.
  • The second seller would have spent $500 and generated $400 in sales.

The first seller can scale it to $500 for $2500, or $5000 for $25000, supposing that the conversion rate is steady.

The second seller can’t scale it and they also spend money from their own pocket for every sale that’s made.

Not only they are selling $100 less than they spend on advertising, but they also have product cost, shipping and Amazon fees included in this $400 worth of sales.

Their daily loss is much more than $100. And that’s really how 9/10 sellers run their business!

Massive attention must be paid to your product listing, in order to convert as many PPC-generated clicks into sales as possible.

Imagine how much your Amazon Business would grow, if you shifted your focus from traffic generation to traffic conversion.

The good thing is that when you find the keys to conversion, all you have to do is scale your traffic game and see profits soaring.

This is an unconventional tactic, and most gurus would expect an Amazon PPC guide to talk about how to do PPC, set bids, the ideal targeting etc etc.

Listen, this is complete non-sense. 

Looking for the ideal targeting, secret bidding techniques and magical keywords is like looking for the ideal toothbrush to brush your teeth with.

Pretty much all toothbrushes perform the same function.

But it’s how you handle the toothbrush that makes the difference.

Furthermore, a toothbrush alone is not going to save you from plaque, periodontitis and gum disease.

Frequent teeth cleaning, consistent brushing, toothpaste and other prevention methods are going to keep your teeth strong.

It’s not just the toothbrush.

With Amazon PPC ads, it’s not just the bid or the keywords or the targeting.

It’s all the rest that goes on INSIDE your listing that matters the most.

How To Guarantee a Profitable Return From Your Amazon PPC Ads.

Here is how ridiculously simple it is.

You need to see what’s the “break-even ACoS”.

In order to figure out what that is, you need to know the Big 4 of Amazon PPC.

  1. Selling Price
  2. Cost Of Goods
  3. FBA Fees
  4. Other Expenses (shipping, packaging, logo printing etc)

Let’s take for example a product of one of our clients that’s currently on Amazon PPC:

These resistance bands by WODFitters are being sold at $19.99.

(Note: There are multiple size variations, but to keep this example simple we are going to use the $19.99 price tag we see on the ad)

For the rest of the Big 4, I am going to use fictitious numbers which are pretty close to the actual costs.

  1. Selling Price: $19.99
  2. Cost Of Goods: $4.99
  3. FBA Fees: $6
  4. Other Expenses: $2

So, based on that they should be making a net profit of $7 per sale.

This means that they can spend UP to $7 for generating a new sale and still be profitable.

Simply divide the net profit by the selling price and you have the “break-even ACoS”.

Which if you do the math is 35% for WODFitters.

They can spend an infinite amount of money on Amazon Ads, as long as their overall ACoS stays below 35%.

Most Amazon Sellers Are Terrified of Amazon PPC Because They Never Took 5 Minutes To Calculate Their “Break-Even ACoS”

Obviously these numbers are fictitious, but the example is pretty realistic. If this was a real client-customer PPC management consultation, we would advised them to shoot for a 30% ACoS.

This pushes them to be more conservative and minimize their losses.

If you went straight up to the break-even ACoS, you would face the risk of something going a little off and having to pay it from your pocket.

Shooting for an ACoS that’s about 5% less than the “break-even ACoS” is a smart way to secure your investment.

With that approach, you are going to be making a tiny bit of profit on every sale (don’t worry, remember all the other benefits you get) and in the worst case scenario you are going to break even.

Either way, there is this safety net of 5% that increases the likelihood of not spending more than you sell.

Alright, so far you’ve learned about the following:

  • Mastering the fundamentals
  • The 5 main goals of Amazon PPC Ads
  • Why profit should not be your main focus for each sale
  • Why your focus should be 25% on traffic and 75% on conversion
  • Break-even ACoS and how to calculate it
  • The 5% safety net

Now, how do you actually set up your Amazon PPC ads?

Knowing the theory is not enough, unless you take action, so here we go about this!

This Dangerously Effective Amazon PPC Actionable Formula Will Put Your Competitors Out Of Business

If you’ve followed all along, then all you need to do is this:

  1. Set up an automatic campaign
  2. Set up a manual campaign
  3. Let them run for 1 entire week
  4. Don’t touch them at all for the 1st week
  5. Remove keywords that have an ACoS higher than your break-even ACoS. Keep the rest.
  6. Rinse and repeat

It’s really so incredibly easy at this point, because you’ve done a heck of a great preparation.

Amazon Sellers make the mistake of starting at this point and many follow this 6 step formula. But they fail because they do not understand the strategies laid out so far in this article.

They simply take 2 minutes to follow the steps from 1 to 6 and that’s all they do, leaving their Amazon Ads success to be determined by pure luck.

(Hint: And it never works)

It certainly can be frustrating, having to know all these things and also acquire the experience to execute them properly.

Hence why we are offering Amazon Sponsored Ads set up and management services, to relieve you from this frustration.

(Yes, this is a shameless plug for our services which we are very glad to mention because they take a massive burden away from our clients lives. And we have had more than 5000 Amazon clients in the last 2 years.)

Anyway, if you decide to run your Amazon PPC ads on your own, here are some last things to keep in mind.

  • Amazon’s reports have a several day latency. It may take up to 72 hours for conversions to be reported. So, if you don’t see any sales coming immediately, don’t freak out.
  • If certain keywords have an ACoS much lower than your break-even ACoS, it makes sense to raise the daily bid on these keywords.
  • The most important metric after ACoS is not clicks, nor impressions but Orders.
  • Filter the keywords by “orders” and invest a bigger part of your budget on the high performing ones.
  • Take the 3-5 most high performing keywords and incorporate them in your title, search terms and bullet points, if they are not there already.
  • If there is a keyword you think has potential but generates a forbidden ACoS, you could lower the bid and let it run for another week to see what happens. Lowering the bid might still drive clicks and orders, but with a lower ACoS. Sometimes, you might have bid too high.
  • Don’t bother about negative keywords. These have been there since Amazon offered Broad as the only match type in order to narrow down your targeting. No need to worry about them.
  • Don’t run Amazon PPC unless you have a couple reviews.
  • The more reviews you have the higher your conversion is probably going to be.

And that’s it ladies and gentlemen.

You are now ready to blow your competitors listings off and run some really profitable Amazon PPC Ad campaigns!

amazon ppc sponsored products

 

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