Over the last decade, Amazon has become the world’s largest eCommerce platform. It’s safe to say Amazon has become pivotal in the eCommerce space. Amazon has a claim to over 50% of eCommerce market share and it’s only going up from here. Let’s explore our Amazon advertising guide for small businesses.
Overview
- Why Advertising On Amazon Is Important
- Introduction To Amazon Advertising
- How To Set Up Manual Campaigns
- Amazon Ads vs. Google Ads
- Amazon Advertising Keyword Bidding
- Amazon Advertising Match Types
- Conclusion
Why Advertising On Amazon Is Important
You would be hard-pressed to find someone that’s never used Amazon before. The convenience and simplicity can’t be beaten. Naturally, this created a great market opportunity for third-party sellers to advertise in.
To sum it up nicely, think of Amazon PPC as having a “fast pass” at a theme park. You pay to skip to the front of the line. That’s a very simplified version of how pay-per-click (PPC) advertising works.
Organic listings don’t cost money to show up but they can take a long time to become effective. It’s notoriously difficult to get your Amazon listing to page one of the search results without paid advertising in some way. For instance, other products likely have:
- more reviews than yours
- a lower price
- established performance history
- better listing copy and images
Now you’re probably starting to understand why advertising on Amazon is important. Why would anyone want to buy your product without a lot of reviews? How often do you search page 5+ on Amazon for a product?
Introduction To Amazon Advertising
When it comes to Amazon advertising there are two general routes you can take.
- Manual campaigns
- Automatic campaigns
Automatic (auto) campaigns utilize the power of Amazon’s AI to pair search terms it finds relevant with your ASINs. These campaigns are very useful for keyword farming and can be used alongside manual campaigns if they have a good ACoS or are meeting your business goals.
Manual campaigns let you pick your own keywords. You’re in way more control of how your money gets spent and who sees your ads. However, it’s usually more time-intensive and takes some experience to get right.
Manual Campaigns
- add your own keywords
- more easily adjust budgets/bids
- have more control
Automatic Campaigns
- easy to set up
- less time required to manage
- good for farming keywords
Now you might see why PPC experts use manual campaigns. They know how to manipulate their campaigns to maximize profitability/sales volume or whatever KPI their goal is.
How To Set Up Manual Campaigns
Now that you have a better understanding of how the different types of campaigns, let’s dive into how you might want to set up your manual campaign structure.
After a lot of experimentation, we’ve figured out a method that has worked well for our clients.
Auto: We use an auto campaign from the start. As previously stated, they are very useful for farming keywords for other campaigns. When you find keywords that are converting well from your auto campaigns, we like to add them as exact match negatives to our auto campaigns and then add them to our other manual campaigns depending on search volume.
Trailblazer: If a keyword is converting well from our auto campaign and has less than 2,000 monthly searches, we add it to our trailblazer campaigns. This way, it prevents the higher searched keywords from taking all of the impression share.
Discovery: We use discovery campaigns for the highest searched/converting keywords. This is usually the campaign our clients get most of their sales from. Because highly searched keywords are often competitive, the ACoS tends to be a little higher.
Tip: Running a higher ACoS isn’t always a bad thing. Sales velocity is extremely important for Amazon PPC. Don’t use it as your only KPI.
(Optional) Branded: Sometimes we use to our client’s brand keywords as a defensive campaign. We bid the branded keywords in both exact match and phrase to prevent competitors from stealing sales from our clients. Amazon gives a more favorable CPC to your own brand.
Amazon Ads vs. Google Ads
If you have any experience with Google Ads, Amazon should seem pretty simple compared to it. Amazon is comparable to Google Ads from a few years ago in sophistication. Don’t confuse simple with easy, though. Here are some key differences:
Amazon:
- your ads take you to a product page
- sponsored ads conversion rates fall around 5-10% on average
- PPC plays a big part in organic ranking
Google:
- ads typically take you to your own website/landing page
- text ads converion rates fall around 1-3% on average
- PPC has little effect on organic rankings
Both:
- PPC (pay-per-click)
- ads trigger by keywords
- organized by campaigns/ad groups
There are more differences between the two, but this would be a good starting point. Amazon shoppers are ready to purchase as soon as they get to the website. Hence, they tend to be more near the bottom of the funnel and convert higher.
Amazon Advertising Keyword Bidding
Understanding bidding is probably the hardest aspect of PPC in general. It’s impossible to tell what’s going to happen when you increase or lower a bid but I have some general guidelines that should steer you in the right direction.
When you first start advertising on Amazin it’s okay to start slow. You can always increase your bids and budgets as you go and learn.
Tip: a good CPC to start off is $1. You should get some results and can scale up or down from here.
- Bid highest on exact matches, medium on phrase and lowest on broad
- Usually, lowering your bids will lower your ACoS. This isn’t always true, though! You may end up lowering your placement when affects conversion rates dramatically. But, if you stay in the same placement category, lower bids = lower ACoS
- Your max bid isn’t the same thing as the CPC. CPCs are what you end up paying per click
- Not all keywords are created equally. Some markets have keywords as high as $30 per click or more!
- Short-tail, competitive keywords are going to cost more. Think “men’s shoes” instead of “men’s running shoes size 10.5”
Understanding these main starting points will allow you to play around and get familiar with Amazon PPC and how keyword bidding works.
Amazon Advertising Match Types
There are three main keyword types in Amazon advertising. They are exact, phrase and broad.
Broad keywords contain synonyms, close variants, acronyms, abbreviations and more. Broad keywords get the the most impressions but usually convert the least.
Phrase match keywords show when someone searches for the phrase. If your keyword is “men’s shoes”, the keyword would show if someone searched for “red men’s shoes” or “running men’s shoes” but not for “men’s sneakers”
Exact match keywords are pretty much what they sound like. Customers have to search exactly what your keyword is for it to appear. Your ad will only show if they search “men’s shoes.” Exact match keywords typically have the highest conversion rates and highest costs.
Conclusion
Ecommerce is an increasingly important aspect of modern business and is only growing year-over-year. Amazon is a great opportunity for small businesses to grow their business. This guide should give you a general understanding of Amazon advertising and serve as a starting point for your new venture.
We hope you enjoyed our ultimate Amazon advertising guide for small businesses. Let us know in the comments below what you think.
You might also be interested in our Ultimate Google Ads Beginner’s Guide.