How to Be Successful with Amazon PPC Management

In 2021, 56 percent of total e-commerce sales nationwide in Germany were generated through the Amazon Marketplace. In 2015, Amazon's share of total e-commerce turnover in Germany was still 46 percent (Source). So the question is not whether sales are made on Amazon, but how they work best. How a sustainable long-term strategy for your Amazon business looks like, guest author Maximilian Schmitt explains here:

What is meant by Amazon PPC Management?

Amazon PPC management is understood as the control of all campaigns , which are integrated and created within the Amazon advertising console. To get your bearings in the topic, it is important to be familiar with some terms of Amazon PPC management.

CC (Pay-per-Click)

The advertising system of Amazon PPC management works according to the pay-per-click system. PPC thus means that per click is paidin plain language: costs are incurred only when the advertisement is played out and actually clicked on the marketplace (e.g. Amazon) clicked. So no fees or costs are incurred for pure impressions within the marketplace. Here, as the name suggests, the PPC is a central factor and plays a role in all processes. The correct determination and control is therefore a key activity in PPC management on Amazon.

Bidding

Within this pay-per-click system, there is a certain bidding system, the principle of Real-Time Bidding (RTB) is based. What exactly does this mean? It is a form of programmatic advertising that enables the buying and selling of digital ads in real time. When users visit a website or a mobile app, an auction is conducted in real time, where advertisers bid for and compete for an advertising space.

Amazon aims in this auction process to play out the product with the highest bid price and thus the highest relevance for a search query.

The higher the bid, the higher is also the chance of the best placement within the ads.  

The bid amount thus largely decides about a placement.

CPC (Cost-per-Click)

You now know that you can run PPC ads that are paid per click. How high the respective Cost-per-click (CPC) is, depends on your bids and the relation to the bids of the competitors. The system on Amazon works according to the so-called second price auction procedure. In the end, the highest bidder only pays 0.01 euro more than the second placed person.

Amazon PPC management therefore defines the control of different campaigns, which are each set up with different goals and filled with campaign-specific keywords. The main focus here is on determining the right CPC within the campaigns and defining this accordingly and correctly calculating. The simplest way to do this: A target-performance comparison .

Bid optimization

If an Amazon PPC campaign or ad is not running as desired, parameters need to be changed and optimized. It may happen that a previously set ROAS target (Return on Advertising Spend) cannot be achieved due to too few sales. So concrete changes need to be made, for example in the bid strategy.
If a corresponding keyword is below the desired target, the bid can be increased accordingly. If the keyword is above the target, the bid must be reduced accordingly .

TIP: Calculating the optimal CPC for a keyword can be particularly helpful with long-tail keywords, among other things.

ACOS (Amazon Advertising Cost of Sale)

The ACOS is one of the most important KPIs in Amazon PPC management. This parameter not only summarizes the ratio of advertising input to output, but also helps at a smaller level in campaign optimization.

A targeted click price (CPC) could be calculated after the following formula:

Conversion Rate X Shopping Cart Height X ACOS Target = CPC

Conversion Rate

Another important KPI for the overall performance on Amazon. In addition to optimisations of Amazon PPC campaigns, other organic factors also have an influence. The main focus here is on the perfection of SEO on the corresponding Amazon Listings.

The Amazon PPC management therefore helps you to find and define the perfect click prices (CPC) and adjust them to the optimal Amazon PPC strategy and their perfect Amazon PPC Optimisation . Furthermore, the management of Amazon PPC campaigns and the corresponding keyword and competitor optimisations help to define bids according to the individual ACOS targets of the sellers .

Why should Amazon PPC Management be carried out?

Within the marketplace, it is unavoidable to optimize the products through the given Search-Engine-Optimization (SEO) factors and Search-Engine-Advertising (SEA) factors down to the smallest detail, as the complexity within the marketplace has increased steadily and massively over the last years. With this growth, the competitive activity is also increasing and the dealers*in have to position themselves competitively .

What steps are necessary for Amazon-PPC-Management?

1. SEO-Setup

For a successful Amazon PPC management, a good foundation must be created. Here in the form of a perfect SEO setup. A part of it consists of filtering the relevant search terms (keywords) and placing them accordingly in the listing. The following positions are particularly important:

• Title
• Bullet Points
• Backend Keywords

Furthermore, product images, brand history and A+ content must be optimized to the last detail in order to thus achieve the best possible conversion of the customers*in on the own product. Here, the component of the organic turnover is an important parameter.

2. SEA-Setup

Here, the actual Amazon PPC management begins. Amazon gives sellers a comprehensive toolbox in Advertising (SEA) to make inorganicly visible on the relevant keywords at the top positions with their own products. This is crucial for generating additional sales in the long term that boost the ranking.

3. Understanding Ranking Formula

The ranking formula in the marketplace is important for the basic understanding of every seller. Through the two factors Visibility and Conversion a sale is created . When a sale is made at full price on a specific keyword, a boost in the ranking occurs. A good ranking is the overarching goal of every Amazon seller.

4. Optimizing Ranking

In order to increase and sustainably secure the ranking in the long run, it is essential to generate turnover on a keyword within a certain period of time. This is how a long-term and sustainable ranking on a keyword is created. This ranking must be created on a variety of relevant keywords, so that a product is positioned as broad as possible .

To also lead a financially healthy account and to position it sustainably, it is important that a healthy weighting between organic and inorganic sales is generated. Ideally, 60-70 percent organic are aimed for in relation to 30-40 percent inorganic sales .

Within a product launch, these objectives vary depending on the strategic orientation of the product. Advertising can help build a rank, steadily increase it, and thus take one of the most important positions in the distribution on the Amazon marketplace .

What tools support internal Amazon-PPC-Management?

The basis of the Amazon-PPC-Optimization is firstly the creation of campaigns with the correct alignments and contents. In keyword research as well as monitoring, there are among others two Amazon-PPC-Tools that make PPC management on Amazon easier and more efficient:

Helium 10

When finding the relevant keywords and identifying the essential and decisive competitors on the Amazon marketplace, Helium 10 is an indispensable Amazon Advertising Tool.

Cerebro

Another tool in Helium 10 is Cerebo. It is important to filter and identify the relevant keywords of competitors through the competitors and the use of keyword research tool Cerebo. For this purpose, the ten strongest ASINs in terms of revenue are inserted into the tool and filtered by Competitor Rank Average (e.g. 1-10). Thus, the keywords with the highest positioning of the competitors are selected, on which the highest number of sales takes place.

What is important here is the understanding that it is not primarily about the highest search volume, but about the Relevance of the Keywords for the respective product in the market. The customer on Amazon comes with a clear desire to buy a product on the marketplace. It is not about arousing interest through as broad a spread as possible.

Magnet

As a third extension of Helium10, Magnet is noteworthy. This tool extends a successful keyword research with the filtration of keywords, which in the market have the highest search volume. For this purpose, it is filtered by main keyword descending by search volume. This is followed by a manual evaluation of the keywords. The more accurate this is, the more specific and better the advertising campaigns will be and the higher the success of the corresponding advertising measures on the Amazon marketplace will be in the end. Helium10 thus supports the finding of the competitors and the definition of the relevant keywords.

X-Ray

With the help of the Chrome Extension X-Ray of the PPC-Tool the most relevant keywords and the Competition-ASIN with the highest turnover volume can be identified on the marketplace. These are a basis to advertise competitors*in targeted with the help of a Product-Targeting-Alignment and thus win buyers*in. A fitting comparison would be that EDEKA had received the chance to place targeted advertising on and in front of the REWE market. This can be one of the strongest and most important campaign strategies against competitors in the market.

Sellerboard

The monitoring of success on the Amazon marketplace also has to be measured through clearly defined KPI. The basis for this are Sales, Advertising Costs and Contribution Margin.

As a tool, Sellerboardis suitable for this, as it bundles all data available on Amazon in one place and prepares it in a user-friendly way. In addition, the cash flow can be calculated and the warehouse can be maintained via Sellerboard. This makes the important and essential success KPI for distribution on Amazon quickly and transparently visible at any time.

Should the Amazon-PPC-Management be outsourced?

The corresponding Amazon PPC management can be outsourced. The basis for this decision mainly lies in defining the focus. Here, understanding your own core competence is an important decision criterion. The activity of an Amazon PPC manager can either be done with a high degree of effort in your own direction or be given to service providers or tools. In the end, it all depends on how much expertise in the field of Amazon Advertising is available in-house and what effort the management of the campaigns, the shifting of keywords and the constant adjustment of bids for the entire product range entails.

Conclusion on Amazon PPC Management

Through the approaches and measures described in this article, it quickly becomes clear that advertising on the Amazon marketplace is becoming increasingly complex and associated with ever more challenges. Consequently, it is important to make daily optimizations and always be on the market in order to be visible in the long term and competitive . Amazon PPC and Amazon PPC management are thus the essential factors on the marketplace that contribute to securing lasting sales success.