Amazon PPC Meaning: A Complete Guide for Beginners

By Cepy 8/31/2023 Post a Comment

Hi Online Friends,

If you are an Amazon seller or a brand owner, you might have heard of Amazon PPC, or pay-per-click advertising. But do you know what it means, how it works, and how it can help you grow your online business? If not, don't worry. In this article, we will explain everything you need to know about Amazon PPC, from its definition and benefits to its types and best practices.

By the end of this article, you will have a clear understanding of Amazon PPC meaning and how to use it effectively to boost your product visibility, traffic, and sales on the world's largest e-commerce platform. So, let's get started!

What is Amazon PPC?

Amazon PPC is a marketing strategy that allows sellers and brands to promote their products on Amazon by bidding on relevant keywords and displaying their ads on Amazon's search results pages, product detail pages, or other websites. When a potential customer clicks on an ad, the advertiser pays a small fee to Amazon. This is why it is called pay-per-click advertising.

Amazon PPC is one of the most popular and effective ways to advertise products on Amazon, as it helps sellers and brands reach more customers who are ready to buy. According to a report by Jungle Scout[^1^], 75% of Amazon sellers use Amazon PPC to increase their sales and profits.

How does Amazon PPC work?

Amazon PPC works on a bidding system, where advertisers compete for ad space on Amazon based on the keywords they choose. The keywords are the words or phrases that customers use to search for products on Amazon. For example, if you sell coffee makers, you might want to bid on keywords like "coffee maker", "espresso machine", or "French press".

Amazon runs an auction to determine which ads to show and in what order, based on the bid amount and the ad quality score. The bid amount is the maximum amount that an advertiser is willing to pay for each click. The ad quality score is influenced by factors such as the relevance of the ad to the search query, the click-through rate, the conversion rate, and the customer reviews.

How much does Amazon PPC cost?

The cost of Amazon PPC depends on several factors, such as the product category, the competition level, the seasonality, and the demand and supply of keywords. The average cost per click (CPC) on Amazon is around $0.77[^2^], but it can vary widely depending on these factors.

To find out the actual CPC for a specific keyword or product, advertisers can use tools like Amazon's keyword planner tool or SellerApp's keyword research tool[^3^]. These tools can provide insights into the search volume, competition level, suggested bid range, and estimated sales for each keyword.

What are the benefits of Amazon PPC?

Amazon PPC offers many benefits for sellers and brands who want to grow their online business. Some of the main benefits are:

Increased product visibility: Amazon PPC helps sellers and brands get their products in front of more customers who are searching for them. This can increase brand awareness, customer loyalty, and repeat purchases.
Higher organic ranking: Amazon PPC can also improve the organic ranking of products on Amazon's search results pages. This is because Amazon's algorithm considers sales velocity as one of the factors that determine product ranking. By driving more traffic and sales through PPC ads, sellers and brands can boost their sales velocity and rank higher organically.
Better control over budget and performance: Amazon PPC allows sellers and brands to set their own budget and bids for each campaign and keyword. They can also monitor and analyze their campaign performance using various metrics such as impressions, clicks, conversions, sales, advertising cost of sales (ACoS), return on ad spend (ROAS), etc. Based on these metrics, they can make adjustments to optimize their campaign efficiency and profitability.
Faster results: Compared to other marketing strategies such as SEO or social media marketing, Amazon PPC can deliver faster results. This is because PPC ads can start showing up as soon as they are launched, while SEO or social media marketing may take weeks or months to build up traffic and sales.

What types of ads are available on Amazon PPC?

Amazon PPC offers three types of ads for sellers and brands: Sponsored Products, Sponsored Brands, and Sponsored Display. Each type of ad has its own features, benefits, and limitations.

How to create an Amazon PPC campaign?

To create an Amazon PPC campaign, advertisers need to follow these steps:

Log in to Seller Central or Advertising Console (formerly known as Amazon Marketing Services) depending on whether they are sellers or vendors.
Choose the type of ad they want to create: Sponsored Products, Sponsored Brands, or Sponsored Display.
Name the campaign and set a daily budget and a start and end date.
Choose a targeting method: manual or automatic. Manual targeting allows advertisers to select their own keywords and bids, while automatic targeting lets Amazon choose keywords based on the product information.
If manual targeting is selected, enter the keywords and bids for each ad group. Advertisers can use broad match, phrase match, or exact match to control how closely the keywords match the search queries.
If automatic targeting is selected, choose a default bid for each ad group. Amazon will adjust the bids based on the likelihood of conversion.
Review and launch the campaign.

How to optimize an Amazon PPC campaign?

To optimize an Amazon PPC campaign, advertisers need to monitor and analyze their campaign performance regularly using various metrics such as impressions, clicks, CPCs,conversions, sales, ACoS, ROAS, etc. Based on these metrics, advertisers can make adjustments to improve their campaign efficiency and profitability.

Some of the common optimization strategies include:

Adding negative keywords to exclude irrelevant or unprofitable search terms
Adjusting bids based on the keyword performance and the target ACoS or ROAS
Testing different ad creatives, headlines, and images to improve the click-through rate and conversion rate
Expanding the keyword list to capture more traffic and sales opportunities
Segmenting the ad groups by product category, price range, or customer intent to increase the relevance and quality score of the ads
Using Amazon's dynamic bidding feature to automatically adjust the bids based on the likelihood of conversion

A detailed table breakdown related to amazon ppc meaning

Type of ad	Description	Benefits	Limitations
Sponsored Products	Ads that promote a single product and appear on the search results pages or product detail pages	Increase product visibility, drive traffic, and boost sales	Require keyword research and bid management, may have lower click-through rate and conversion rate than other types of ads
Sponsored Brands	Ads that showcase a brand logo, a headline message, and up to three products. They appear on the top or bottom of the search results pages or on other placements across Amazon	Build brand awareness, generate loyalty, and attract new customers	Only available for vendors or sellers enrolled in Amazon Brand Registry, may have higher CPCs than Sponsored Products, require creative design and copywriting skills
Sponsored Display	Ads that target customers based on their shopping behavior or interests. They appear on product detail pages, customer reviews pages, or other websites outside of Amazon	Retarget customers who have viewed or purchased similar products or reach new customers who have shown interest in related categories	Have limited control over the ad placements and targeting options, may have lower conversion rate than other types of ads, require compliance with third-party websites' policies and regulations

FAQs about amazon ppc meaning

What is ACoS and ROAS?

ACoS and ROAS are two important metrics that measure the profitability of Amazon PPC campaigns. ACoS stands for advertising cost of sales, which is the percentage of sales that is spent on advertising. ROAS stands for return on ad spend, which is the ratio of sales to advertising spend. ACoS and ROAS are inversely related, meaning that a lower ACoS means a higher ROAS, and vice versa.

How to calculate ACoS and ROAS?

To calculate ACoS, divide the total ad spend by the total sales generated by the ads. For example, if you spend $100 on ads and generate $500 in sales, your ACoS is ($100 / $500) x 100% = 20%. To calculate ROAS, divide the total sales generated by the ads by the total ad spend. For example, if you spend $100 on ads and generate $500 in sales, your ROAS is ($500 / $100) x 100% = 500%.

What is a good ACoS and ROAS?

There is no definitive answer to what is a good ACoS and ROAS, as it depends on various factors such as the product category, the profit margin, the campaign objective, and the competition level. However, a general rule of thumb is that a lower ACoS and a higher ROAS indicate a more profitable campaign. A good way to determine your target ACoS and ROAS is to compare them with your break-even point, which is the point where your ad spend equals your sales. To calculate your break-even point, divide your profit margin by 100%. For example, if your profit margin is 30%, your break-even point is (30 / 100) x 100% = 30%. This means that any ACoS below 30% and any ROAS above 333% will result in a positive return on investment.

How to lower ACoS and increase ROAS?

To lower ACoS and increase ROAS, you need to optimize your Amazon PPC campaigns by following some of the strategies mentioned above, such as adding negative keywords, adjusting bids, testing different ad creatives, expanding the keyword list, segmenting the ad groups, and using dynamic bidding. You can also use tools like SellerApp's PPC Analyzer to get actionable insights and recommendations on how to improve your campaign performance and profitability.

What is the difference between Amazon PPC and SEO?

Amazon PPC and SEO are two different ways to increase the visibility and ranking of products on Amazon's search results pages. PPC stands for pay-per-click, which means that advertisers pay a fee to Amazon each time a customer clicks on their ad. SEO stands for search engine optimization, which means that sellers optimize their product listings to match the search queries and preferences of customers. PPC and SEO have different advantages and disadvantages, and they can complement each other to achieve the best results.

What are the advantages and disadvantages of Amazon PPC?

Some of the advantages of Amazon PPC are:

It can increase product visibility, traffic, and sales quickly and effectively
It can improve the organic ranking of products by boosting sales velocity
It can help sellers and brands build brand awareness, loyalty, and reputation
It can help sellers and brands reach more customers who are ready to buy
It can help sellers and brands test different products, keywords, and markets

Some of the disadvantages of Amazon PPC are:

It can be costly and competitive, especially for popular keywords and categories
It can require constant monitoring and optimization to maintain profitability
It can be affected by external factors such as seasonality, demand, and supply
It can be complex and confusing for beginners who are not familiar with the terms and tools
It can be risky if not done properly or ethically

What are the advantages and disadvantages of Amazon SEO?

Some of the advantages of Amazon SEO are:

It can increase product visibility, traffic, and sales organically and sustainably
It can help sellers and brands save money on advertising costs
It can help sellers and brands establish trust and credibility with customers
It can help sellers and brands differentiate themselves from competitors
It can help sellers and brands improve their product quality and customer satisfaction

Some of the disadvantages of Amazon SEO are:

It can take a long time to see results and rank higher on Amazon's search results pages
It can be challenging and tedious to optimize product listings for hundreds or thousands of keywords
It can be influenced by Amazon's algorithm changes and updates
It can be difficult to measure and track the performance and impact of SEO efforts
It can be hard to keep up with the changing customer behavior and preferences

How to do Amazon SEO?

To do Amazon SEO, sellers need to optimize their product listings for both customers and Amazon's algorithm. This means that they need to include relevant keywords, high-quality images, compelling titles, bullet points, descriptions, backend search terms, etc. They also need to ensure that their products have positive reviews, ratings, feedbacks, etc. To do Amazon SEO effectively, sellers can use tools like SellerApp's Listing Quality Check to analyze their product listings and get suggestions on how to improve them.

How to combine Amazon PPC and SEO?

To combine Amazon PPC and SEO, sellers need to use both strategies in a synergistic way. This means that they need to use PPC to boost their sales velocity, brand awareness, and organic ranking, while using SEO to maintain their product visibility, customer loyalty, and profitability. To combine Amazon PPC and SEO effectively, sellers need to do keyword research, competitor analysis, product listing optimization, campaign creation and optimization, performance measurement and analysis, etc. They also need to use tools like SellerApp's All-in-One Platform to manage their PPC and SEO efforts in one place.

What are some best practices for Amazon PPC?

Some of the best practices for Amazon PPC are:

Do keyword research to find relevant and profitable keywords for your products
Create separate campaigns for each product category or goal
Create ad groups based on keyword match types or customer intents
Use negative keywords to exclude irrelevant or unprofitable search terms
Set realistic budgets andbids for each campaign and keyword
Test different ad creatives, headlines, and images to improve the click-through rate and conversion rate
Monitor and analyze your campaign performance using various metrics such as impressions, clicks, conversions, sales, ACoS, ROAS, etc.
Optimize your campaigns regularly by adding or removing keywords, adjusting bids, pausing or deleting underperforming campaigns or ad groups, etc.
Use tools like SellerApp's PPC Analyzer to get actionable insights and recommendations on how to improve your campaign performance and profitability

Conclusion

We hope this article has helped you understand the meaning of Amazon PPC and how to use it effectively to grow your online business. Amazon PPC is a powerful marketing strategy that can help you increase your product visibility, traffic, and sales on the world's largest e-commerce platform. However, it can also be complex and challenging, especially for beginners who are not familiar with the terms and tools. That's why we recommend using SellerApp's All-in-One Platform to manage your Amazon PPC and SEO efforts in one place. SellerApp is a comprehensive solution that helps you do keyword research, competitor analysis, product listing optimization, campaign creation and optimization, performance measurement and analysis, etc. It also provides you with various features and tools such as Listing Quality Check, PPC Analyzer, Keyword Research Tool, Product Research Tool, etc. to help you succeed on Amazon.

If you want to learn more about Amazon PPC and SEO, check out our other articles on our blog. You can also sign up for a free trial of SellerApp and get access to all the features and tools that we offer. Thank you for reading and happy selling!

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