Do you feel that, after exploring an ocean of information about Amazon PPC ads, you’ve reached a dead end? Do you feel that too much information on the topic has messed up your advertising strategy and that you’ve strayed away from your goal?
If your answer is yes, then it’s the right time to take a break and “press reset.” In this article, we’ll answer the 6 most important questions related to Amazon PPC ads to help you get your Amazon advertising strategy back on the right track.
I’m using Google Ads. Do I really need Amazon PPC ads?
For starters, let’s clarify something. Regardless of how big and powerful Google is, we should never underestimate the size and the power of Amazon. Also, you shouldn’t forget that when it comes to Amazon advertising, Amazon’s own ads have a major “home-court” advantage. If you have ever doubted the power of Amazon ads, you should check out the information below.
Recently, there was a study that compared Amazon PPC ads with Google ads. The results of the study showed that the cost per click on Amazon was significantly lower than Google’s cost per click. The difference in the cost was 38%, which is not an insignificant amount.
Apart from savings that you can make by using Amazon PPC ads, there is another advantage. People clicking on Amazon PPC ads are usually more determined to buy. They have already searched for what they need on Google and ended up on Amazon — where they expect to find and buy what they are after. Therefore, you want to make sure they are able to find your product when they arrive to Amazon.
Based on the points mentioned above, we can conclude that you should be using Amazon PPC ads even though you already pay for Google Ads. With Amazon’s advertising, you’ll get higher click-through rates, lower cost-per-click, and increased profitability.
What should my Amazon ad budget be?
This is one of the most common dilemmas when it comes to people new to Amazon PPC ads. However, the advice we’ll give here can do good even to those with rich sales experience on Amazon. Maybe it’s time for a budget rebalance.
When it comes to the advertising budget, there is a golden “¼ rule." The rule is simple and straightforward — you should spend 25% percent of what you earn on advertising. This means that for every $100 in revenue, you should spend $25 on Amazon advertising.
However, we all know that when there’s a rule, there’s an exception too. This is applicable to Amazon PPC ads as well, so make sure you don’t stick blindly to this ratio. You will need to adjust your advertising budget to your specific situation and goals.
You might be selling a product that is in high demand. If this is the case, you might not have to spend ¼ of your revenue on advertising to get to your buyers. However, don’t be too quick to cut your Amazon PPC ads budget. If you determine that you can get the return on investment quickly and that the ROI of your advertising investment is high, don’t hesitate to scale your investment. There are many examples of sellers investing up to 1/3 of their revenue into advertising.
The key is to keep a close eye on the performance of your ads and experiment. If you do so, you’ll find the sweet spot of your advertising strategy quickly. The correct budget for you will depend on multiple factors, but it comes down to the question of how much you are prepared to “risk” to “get rich.”
What is the recommended bidding strategy when it comes to Amazon PPC ads?
Choosing the right bidding strategy depends on multiple factors. You should know what you want to achieve with your campaign. Are you new to the market? Do you have a limited advertising budget? Is the niche you chose famous for a fast return on investment? Do you know your competitors and their advertising activities?
If you’ve determined that your products are in high demand and that you just need to get in front of your buyer’s eyes more frequently than your competition, don’t be afraid to bid high. However, try to predict the actions of your competitors and make sure you know how much you’re willing to spend to beat them. You can even consider using the Bid+ feature if you want to get fast results. However, keep in mind that if you’re spending more than you’re earning, then you should reconsider your bidding strategy. Remember, your margin must stay positive, and advertising cost of sales must have a limitation. Unless, of course, you have unlimited money.
On the other hand, if your idea is new and yet to be proven, and if you are ready to invest time to build strong relations with your potential clients and your position on the market, you should opt for a lower, but continuous investment. As your sales grow, you should increase your advertising investments. It’s always good to test different types of campaigns so that you learn which campaigns work best for different advertising goals. Be patient, consistent, and keep a close eye on what your competition is doing.
What Amazon PPC ad format is the best?
Let’s start by clarifying that every ad format works, but none of them works for every advertising goal. So how to choose between Branded Products (formerly Headline Search Ads), Sponsored Products and Product Display Ads?
You should choose one of these ad types depending on what you would like to achieve. Let’s look at how they differ and what the main advantages of each are.
Sponsored Brands (formerly Headline Search Ads) are keyword-targeted, cost-per-click ads that allow brands to promote custom headlines, their brand's logo, and featured ASIN images and drive traffic to their Store or a curated page that showcases their brand and products on Amazon. Sponsored Brand Ads give you an opportunity to get users to know your complete offer vs. seeing only one product.
Sponsored Products is the ad type that will show among top research results. This ad format will get you the most clicks and conversions given that you did everything needed before launching your campaign (tested your prices against competition, did a great product presentation, etc.). If your goal is to position yourself high for specific keywords, you should opt for this ad type.
Product Display Ads are for those that can allocate a higher budget for Amazon advertising. Product Display Ads are cost-per-click product or interest targeted display ads that drive traffic to a product's detail page.If your products are intended for a specific niche, you can target other products that target the same niche and start generating lots of clicks. Your ads can appear on the product detail page, on the right rail of search results, at the bottom of search results, on the customer reviews page, on the read all reviews page, at the top of the offer listing page and in Amazon-generated marketing emails such as follow ups and recommendations. Product Display Ads run across desktop, mobile web and mobile app.
What is Amazon Bid+ and should I use it?
We already mentioned Bid+ feature when we were discussing bidding strategy. The use of this feature is optional. It tracks the biddings of your competition, and when they start to outbid you, the tool raises your own bids by 50%.
If you are eager to get ahead of your competition, then you should try this tool. However, be careful to track your campaigns closely. If you don’t, you might end up spending much more than you can afford. You can’t easily track your CPC with Bid+, so you should make sure you keep a close eye on your campaigns when using the Bid+ feature.