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Amazon PPC – The Pros and Cons

The rise of Amazon advertising is arguably the biggest factor in running a successful Amazon business right now. Amazon offers a wide range of advertising benefits for your business, but Amazon advertising can be a confusing space to navigate, especially for a newcomer.

One of the most common advertising platforms Amazon offers is Amazon PPC (or Sponsored Products), a platform that helps sellers increase their online sales. PPC is a method where the advertiser (you) pays only for the advertisements that potential customers click. While it may sound simple enough, it’s not without its downsides, but exploring the pros and cons of Amazon PPC can help you decide if it’s the best option for your business.

A couple of things to note before delving into Amazon PPC: First, it’s not as advanced a platform as some other PPC options out there, but it’s the simplicity that makes it ideal for new users and those just learning how to leverage PPC to make sales. Second, PPC will require some investment, so you run the risk of dinging your profits if you don’t do it right (and there is a learning curve).

The positive side to Amazon PPC is that you have the potential to get a great return on your investment if you leverage the right skills. It’s not enough to run ads on Amazon. You’ll have to work your ads so that your ads work for you, and like all advertising marketplaces, competition and price for keywords will increase with popularity! If you’re only average at playing the PPC game, you’ll be beaten out by competitors who: are better at finding keyword opportunities, know how to bid smarter, manage their budgets better, or outsource their advertising to experts.

Are you ready to learn the basics? Let’s get started …

An Overview of Amazon PPC

The Amazon PPC framework involves three basic components:

  1. Campaigns
  2. Ad Groups
  3. Keywords

You also need to know what Advertising Cost of Sale (“ACOS”) means. This is an important metric to be aware of as you build your campaigns as it will tell you how much financial value you are getting out of your campaigns.

For now, let’s look at each of the three main facets of Amazon PPC:

  1. Campaigns
    There are 2 types of campaigns: automatic and manual. Automatic offers an automated approach to a campaign, whereas manual lets you customize a campaign to your needs.
  2. Ad Groups
    Ad groups are the subcategory below the all-encompassing category of campaigns. You’ll use ad groups to dial in on details of a product using different approaches to keywords. Tweaking campaigns and monitoring data at this level will let you know how your overall campaigns are performing.
  3. Keywords
    “Keyword” refers to a word or short phrase that helps people search for products. For example, someone looking for new shoes might search for “running shoes” or “open toe flats.” Your chosen keywords work like guideposts inside your ad groups and campaigns to direct potential customers to your products. Forgetting an important keyword can result in the loss of money because your ideal customers will not be able to find you via search.In general, the more popular your keyword the more it will “cost per click” in your PPC campaign. That is why it’s so important to balance the value of a keyword against its cost.In addition,, some “big player” sellers might use hundreds of keywords at a time. There are some tips and tricks for choosing keywords, but in general you want to start your campaign with 50 or fewer keywords. This allows you to get used to analysing data, tweaking campaigns and gauging performance.

Keyword Match Types: Broad, Phrase or Exact

Amazon PPC uses your keywords to “match” your ad with a user/consumer, using one of three different approaches: broad, phrase or exact. Each of these approaches has its own benefits, so you need to experiment with each match type to see what works best for a specific campaign and budget.

A Breakdown of Match Types

  1. Broad Match
    This wide-ranging match type can potentially pull in the most Amazon shoppers, but it doesn’t allow you to dial in on your ideal customer. This type of match is a good option if you’re launching a new brand or product that doesn’t have a specific niche yet, or if you don’t know what your most relevant keywords are yet. For example if you were launching a new “platform” sneaker campaign under the brand name “Zoom,” customers who search Amazon for “sneakers” might not be familiar with your brand name yet, or what kind of sneakers you sell. This is a great opportunity for you to use a broad approach with your keywords to cast a wide net to get more traffic and in turn, more data on which keywords are relevant to your product. .
  2. Phrase Match
    You should use this match type when you want to start honing in on the specifics of your product. Phrase Match is the middle ground between Broad and Exact, both in terms of cost and specificity.
  3. Exact Match
    Exact Match is the most specific approach. Keywords in this match type are generally less expensive. This approach is also great for helping you define your ideal customer (and customers already looking for your product). The biggest downside of this match type is that you will get far fewer impressions, so it’s great for brands with name recognition, brands that are in an established space, or brands that are so niche they have a very specific customer base.

How Each Match Type Works

Match Type Keyword Respond To Doesn’t Respond To Includes
Broad Platform
Sneakers
Platform Trainers, Platform Shoes High Fashion Shoes Abbreviation or acronyms, synonyms, stems(ing) and plurals
Phrase Platform
Sneakers
Fashion platform sneakers, designer platform sneakers Platform designer sneakers, platform designer shoes Abbreviation or acronyms, synonyms, stems(ing) and plurals
Exact Platform
Sneakers
Platform sneakers, Platform sneakers, Platform sneakers High-rise sneakers, Marant platform sneakers, tall sneakers Plural or singulars, and common misspellings

Looking at this example, you can see each match type category gives you a different advantage, so understanding each match type thoroughly will help you extract optimal value from them. Amazon PPC Campaigns are no longer “nice added extras” they’re a necessity for success in today’s ultra competitive landscape of Amazon sales. It’s also not enough to simply run Amazon Sponsored Ads, you need to be able to do it better than your competition and that takes education, practice and experience.

If you’d like to learn more, send us a note and we’ll take a look at your account with you!

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