This guest post was written by Franz Jordan, the CEO of Sellics.
Amazon Sponsored Products (‘PPC’) is a very useful tool for sellers looking to increase their sales on Amazon. However, with both sellers and brands leveraging the sales potential offered by Amazon ads, the Amazon PPC landscape is getting increasingly crowded (and costly).
With this increased competition driving the average Cost-Per-Click (‘CPC’) up across all Amazon product categories, sellers need to optimize their PPC campaigns to maximize their ad visibility and keep a tighter reign on their advertising costs.
Below are our 3 tips to help improve the performance of your Amazon PPC campaigns, and ultimately help increase your sales on Amazon.
Tip 1: Use Sonar to find PPC keywords
Product ads can only appear on Amazon when your keyword matches the customer’s search term. To maximize the reach of your PPC ads, you need to perform thorough keyword research to ensure you are bidding on all relevant keywords for each product.
Sonar, a free Amazon keyword tool, let’s you pick the top 20-50 keywords for your PPC Manual Campaign. Importantly, Sonar allows you to sort keywords by search volume, allowing you to prioritize the relevant keywords for each product.
With Sonar, you eliminate the risk of bidding on irrelevant keywords, as they only display keywords pulled from real search queries used by Amazon customers. Conversely, if you relied on Google AdWords for your keyword research, you risk bidding on keywords that are simply not relevant to the (usually product centric) search queries of Amazon customers.
Research long tail keywords
In the first half of 2016, the average CPC for winning bids increased by approximately 20% ($0.28 to $0.34). According to Strategy, “the biggest takeaway is that CPC’s went up in all categories (with the exception of music & sports memorabilia).” In short, competition for short tail keywords is getting fierce.
Long tail keywords are phrases that usually contain three or more keywords, and highlight a more specific search intent by the customer. Essentially, you are targeting customers further down the conversion funnel. Usually there is less competition for long tail keywords, so your CPC should also be lower.
Use the search volume estimator in Sonar to help you quickly identify the most relevant long tail keywords. You can also copy and paste the long tail keywords you’ve identified in the Search Term Report, which will generate a list of similar relevant keywords. You can then export the similar keywords via Excel and add to your PPC campaign.
Tip 2: Remove negative keywords (quickly)
Sellers need to be proactive. Remove negative keywords quickly and on a regular basis. You risk spending advertising dollars on unprofitable keywords.
Regularly monitor under-performing keywords that generate clicks, but no purchases. Add those words to your negative keyword list to avoid spending ad dollars on phrases that aren’t convert for your business. Remove the keywords with a high click-through-rate (‘CTR’), but low conversion rate (‘CR’), because these are the keywords that are costing you clicks, but not generating any sales.
However, keep in mind that the more negative keywords you use, the more you will restrict your ad reach for a particular product.
Tip 3: Optimize your keyword bids
Once you’ve set up a new ad campaign for your product, learn how to optimize your CPC bids in order to control your PPC costs. First, you will need to calculate your target ACoS (Average Cost of Sale). By comparing your actual ACoS to your target ACoS, you can measure how well the ads are performing against your profit margin goal.
Guideline for CPC bid optimization:
- If your actual ACoS is more than your target ACoS, lower your bid to test whether you can lower ad spend without affecting your sales.
- If your actual ACoS is less than your target ACoS, it means you have more budget to spend on ads. Consider raising the bid to test whether you can expand your ad reach (and therefore your sales).
- If your keywords are not receiving any impressions, check if you selected the correct Product Category and that you have the keyword included in your ad listing or Seller Central backend search fields (i.e. your backend keywords not included in your product listing page). If your product category is correct and the keyword is included in the listing, then you will need to increase your bid to test whether a higher bid can make the keyword ‘active’.
- Keywords that do not generate any sales over a longer period of time, even after the keyword bid is lowered, should be removed from your Manual campaign and added to your negative keyword list.
Franz Jordan is the CEO of Sellics, a powerful All-in-One tool that combines everything sellers need to be successful on Amazon. Whether you’re looking to increase sales or lower your ACoS, you can manage your Sponsored Product campaigns entirely in our PPC Manager. Other features include our profit dashboard, keyword ranking optimizer, competitor monitoring, and more. We offer a 14 day free trial for new users.