Amazon PPC For Beginners (Optimization Strategy 2021)

Amazon PPC made easy
Seth Kniep
Jan 7, 2021
Launch your Amazon product
PPC ads are essential in order to get your Amazon customers to see your product listing. But how do you make sure you're making money with ads rather than losing money?

Today, I will show you how to build and scale an optimized PPC campaign by answering the 20 most important PPC questions:

What is PPC?

PPC stands for "Pay Per Click." As a seller, you pay Amazon every time a customer clicks on your advertised sponsored listing.

You pay Amazon whether or not that customer buys from you.

What is a sponsored listing?

A sponsored listing is a paid advertisement in Amazon search results.

Sponsored listings look like regular listing results except that they can be identified by a "sponsored" badge.

For example, the following sponsored listings appear on Amazon search results at the top of page 1 when you search the keyword "taco holder."

Amazon Sponsored Listings

The sellers pay Amazon for this increased visibility every time a customer clicks on the sponsored listing.

With many sponsored listings on a page, who gets what position?

The amount you pay Amazon for each click is based on your bid for that keyword. There will be many sellers bidding on the same keyword as they too want the extra visibility and sales.

Amazon Sponsored Listing Positions

PPC works on a bidding system like an auction. The seller who bids the most (offers the most money for a potential click) on a keyword will get position 1 at the top of the first page of search results.

The seller who bids the second most will get position 2 and so on.

The seller sets their bids at a certain amount for each keyword separately.

It's important to be able to distinguish sponsored listings from organic listings.

What is an organic listing?

An organic listing is the default listing. It's the listing you create when you add a product to Amazon.

If a customer clicks on your organic listing preview in the search results page, you are not charged for that click, and you enjoy sales at full profit.

Sponsored vs Organic Listings

What is ranking?

Ranking is short for keyword ranking and is another way of saying, "how high up on results pages your listing shows for a keyword."

The highlighted option here is organically ranking the highest for “taco holder”:

Amazon Organic Ranking

The more sales you make, no matter how you make them, the higher up in search results your organic listing will rank for each keyword you index for.

You can improve your sponsored listing’s ranking for a keyword by bidding more on that keyword (assuming the keywords in your ad campaign are also in your listing).

Why can PPC be the difference between success and failure of your Amazon store?

1) PPC can get your product selling immediately.

You want to begin making money and earn back the cash you've invested in the product.

When you start out on Amazon, your listing has no ranking. Zero. So, to get sales, you need to push your listing artificially to the top of search results so that shoppers can find and buy your product.

If your product surpasses the promise of your listing (FBA Mastery will train you how to do this), you should start garnering your first reviews. 

2) PPC can give you immediate customer behavior feedback.

Use this data to improve your listing and PPC campaigns.

For example, if you are getting more sales when shoppers search “taco holder with taco grabber” then you might switch out your main photo with a picture showing both the taco holder and the taco grabber.

When specific keywords are bringing you more sales, you know that it is worth bidding higher on those keywords.

3) PPC can raise your organic ranking with ad sales.

Every time you make a sale via your sponsored listing, your organic listing will move up the results pages for the keyword the buyer searched.

Your goal is to organically rank at the top of page 1 so that your full-profit, organic listing is visible and making sales.

Why PPC Can be the Difference Between Success or Failure of Your Amazon Store

How do you make sure you're using the right keywords for your PPC campaign?

This answer is keyword targeting. Before you can run your campaigns, you need to know which keywords you want to target.

You can find the best keywords by looking at your competitors’ titles in their listings and by using tools like Niche Hunter.

Focus on the quality of your keywords rather than quantity. You should not have more than 100 keywords.

How do you prioritize the best keywords?

Prioritize the best keywords using two criteria: volume and relevance.

Let me show you how:

Step 1: Put all your keywords into a Google Sheet, Excel, or Numbers document.

Step 2: Sort them by search volume, high to low.

Sort Keywords by Search Volume

Step 3: Remove totally irrelevant keywords.

If someone types in an irrelevant keyword, they likely would not purchase your product.

Let’s say your product is a set of 6 taco stands.

You remove “loch ness monster ladle” because your product is not a ladle...or a loch ness monster. 

Remove Irrelevant Keywords
Pro-tip! Test whether your keywords are relevant with one question: If a shopper searches Amazon using this keyword, how likely is it that they are looking for the product you're selling?

Step 4: Highlight your most relevant keywords green.

Step 5: Highlight your less relevant keywords yellow.

For example, you would yellow highlight “taco kit” because your product is not really a taco kit. And you would yellow highlight “taco stand set of 4” because your product is a set of 6 taco stands. You may convert buyers typing this in, but it is not exactly your product.

Organize Your Keywords

Step 6: Make a copy of this full list (yellow and green) and name it “Product Name, Broad Match.”

Step 7: Copy all the green keywords to a new document and call it “Product Name, Exact Match.”

All of your keywords will go in broad match and only your highly relevant keywords go in exact match.

Exact Match Keywords

How do you create your PPC exact match campaign?

There are actually three campaigns you are going to create:

  • Manual - Exact Match
  • Manual - Broad Match
  • Automatic

You initiate all campaigns like this:

  • Hover over Advertising.
  • Select Campaign Manager.
Amazon Campaign Manager
  • Click Create campaign.
Create PPC Campaign
  • Choose Sponsored Products.
Choose Sponsored Products Campaign Type

Amazon is changing. Soon you will need to access this area from the Amazon Advertising Console, but the procedure will be the same.

Use the following settings for your exact match campaign:

  • Campaign name: [Product] - EXACT - [Date]
  • Dates: Start today with no end date.
  • Daily budget: between $30-$100
  • Targeting: Manual targeting
Exact Match Campaign Settings

Use Dynamic bids - down only.

This allows you to:

  • Have absolute control over ad spend
  • Adjust your bid if you need to spend more for better ranking
  • Bid aggressively
  • Pay less if you overbid
PPC Exact Match Campaign Bidding Strategy

Copy and paste the Campaign name you entered earlier into the Ad group name area.

PPC Ad Group Name

Select the product you wish to advertise.

Select the Product

Select Keyword targeting in the Targeting section.

Select Keyword Targeting

Under Keyword targeting:

  • Select Enter list.
  • Choose Exact as the Match type.
  • Drop in the green keywords from your exact match document.
  • Click Add keywords.
Exact Match Keyword Targeting

Default bids are set at $0.75 but that is often not enough to rank at the top of the first page. This differs based on market competitiveness but bidding at $1.51 or $2.01 is ideal for most. Once chosen, click Add keywords.  

Choose a Bid and Add Keywords

Once added, click Launch campaign.

Click Launch Campaign
Amazon PPC Exact Match Settings

How do you create your PPC broad match campaign?

Use the following settings:

  • Campaign name: [Product] - BROAD - [Date]
  • Dates: Start today with no end date.
  • Daily budget: between $15-$50
  • Targeting: Manual targeting
Amazon Broad Match PPC Settings

Select Dynamic bids - down only.

Dynamic Bids Down Only

Copy and paste the Campaign name you created earlier into the Ad group name area.

Broad Match Ad Group Name

Select the product you want to advertise.

Select Your Product

Select Keyword targeting in the Targeting section.

Keyword Targeting

Under Keyword targeting:

  • Select Enter list.
  • Choose Broad as the Match type.
  • Drop in the green and yellow keywords from your broad match document.
  • Click Add keywords
Broad Match Keyword Targeting

Depending on market competitiveness, bidding at $1.51 should be sufficient. Broad match targeting is less expensive than exact match. Once chosen, click Add keywords.

Once added, scroll down and expand the section called Negative keyword targeting.

Negative Keyword Targeting

Select Negative exact as the Match type.

Drop in all the keywords you used in the exact match campaign. This ensures you avoid keyword cannibalization.

Click Add keywords.

Negative Exact Match

Click Launch campaign.

Click Launch Campaign
Amazon PPC Broad Match Settings

How do you create your PPC automatic campaign?

Use the following settings:

  • Campaign name: [Product] - AUTO - [Date]
  • Dates: Start today with no end date.
  • Daily budget: $15-$50
  • Targeting: Automatic targeting
Amazon PPC Automatic Campaign Settings

Select Dynamic bids - down only.

Dynamic Bids Down Only

Copy and paste the Campaign name into the Ad group name area.

Enter Your Ad Group Name

Select the product you wish to advertise.

Select Your Product

Set your default bid to $1.01.

Most sellers choose even numbers. By choosing $1.01, you set yourself up to outbid other sellers by one cent.

Set the Automatic Campaign Bid

Open Negative targeting and select Negative exact as the Match type.

Drop in all the keywords you used in the broad and exact match campaigns.

Click Add keywords. This ensures you avoid keyword cannibalization.

Negative Exact Match

Click Launch campaign.

Launch Your Auto Campaign
Amazon PPC Automatic Campaign Settings

How do you make sure you're bidding enough?

Once your campaigns are launched, go back into the Campaign Manager. Ensure that your keyword bids are 10% above Amazon’s suggested range for both your exact and broad campaigns.

  • Click the Campaign name.
  • Click the blue number under Total Targets.
Total Targets
  • Make sure you are bidding at least 10% above the highest suggested bid.
Adjust Your Bid

How do you make sure your PPC ads are running properly?

First, make sure your ads are running at least 70% of the day.

Monitor when your budget runs out for each campaign. This is indicated by:

  • Ads disappearing
  • An "Out of Budget" message in Campaign Manager

Raise your budget if necessary.

Second, check your ad placement.

Type in your keywords into Amazon search to find out where your ad lands on the result pages.

Ensure your ads are running at the top of page 1. Increase your bid as necessary in order to raise your sponsored ranking.

Check Your Ad Placement

What are realistic expectations for your PPC ad performance?

First, it takes at least 14 days to get enough data to optimize. Make sure your campaigns run for at least 14 days. Amazon takes 48 hours to collect accurate keyword data in ad reports, so you now have a usable 10 to 12 days of data at minimum.

Second, understand that you probably don’t have many reviews at this point. That means the amount of clicks and sales you are going to get at this point will be far lower than you'll get in the future.

For example, a keyword might have received a lot of clicks, but no sales. That may be because of a lack of social proof. People don’t trust your listing yet and would rather de-risk by going with a more ‘proven’ product. The key is that those clicks may well turn into sales once you have more reviews in the future.

How do you download your PPC ad report so you can check your ad performance?

  • Go into Campaign Manager.
  • Click on Advertising reports.
Advertising Reports
  • Click Create report.
Create Report
  • Choose Sponsored Products as the Campaign type.
  • Select Search term for your Report type in the drop-down.
  • Select Summary as the Time unit.
  • Select the Report period manually while leaving out the last 2 days (48 hours).
Amazon PPC Report Configuration
  • Name your report: [Product] - Search terms report - [Date]
Name Your Report
  • Choose Now for the Scheduled Time.
Delivery Settings
  • Click Run report at the top left.
Click Run Report

It may take a few minutes. Refresh the window to check when it becomes downloadable.

Click the download icon at the top right when it is ready. Save this document on your computer.

Download Your PPC Ad Report

What do all the columns mean on your PPC ad report?

Keyword: This is the keyword you have targeted as the seller.

It's the keyword you put into your campaign.

Customer search term: The keyword the customer actually typed that your ad displayed for.

For example, you put the keyword "taco stand" in a broad match campaign. But what the shopper typed in was "taco stand set of 4." That is where the discrepancy comes into play between Keyword and Customer search term. This discrepancy is good because it gives you precious data.

Impressions: Every time a customer sees your ad, this counts as one impression—regardless of whether they clicked or not.

Every time your ad shows up or "impresses" itself upon a shopper, that is an impression.

Clicks: When a customer clicks on your ad, it counts as one click.

This is when you pay Amazon for every click.

Click-through rate (CTR): The percentage of shoppers who clicked on your ad after seeing it.

CTR = clicks divided by impressions. Multiply by 100 to express CTR as a percentage. If 20 shoppers out of 100 click on your ad, then you have a 20% CTR.

Cost per Click (CPC): How much each click actually ended up costing you.

This may differ from your bid.

Advertising Cost of Sale (ACOS): Shows, on average, the percentage of the sell price you are spending to get a sale from the ad.

ACOS = Ad spend divided by sales. Multiply by 100 to express ACOS as a percentage. If you make $100 in taco stand sales, but you spend $10 in ads to get that $100, then your ACOS is 10%.

Amazon PPC Ad Report Terms

Which PPC metrics in your ad report should you be analyzing?

Your goal at this point is to work out:

  • Which keywords are performing well. You will keep these keywords running in your PPC campaigns.
  • Which keywords are performing poorly. You will pause these weak keywords in your PPC campaigns.

The report has many columns but you will focus on the most critical. In particular, two metrics indicate keyword strength:

1) Sales

Sales for a keyword are the strongest sign that this is a good keyword.

2) Clicks

Clicks show interest. When a keyword has a lot of clicks, this means customers who searched for a product using that keyword found your product interesting. Evaluate your CTR:

  • 0%-5% is poor
  • 5-10% is decent
  • 10%-15% is good
  • 15%+ is excellent
Clicks and Sales Metrics

What if your PPC ads are not yielding much data?

It's been 14 days. You're sure your data is accurate. But you don't have sales, clicks, or impressions. If you don't have enough data, that means you have one of two errors:

1) Your bids were not high enough, which results in your ads not being visible enough. This is often indicated by low impressions.

2) Your daily budget is too low. Raise your budget.

Make sure your keywords are relevant. Sometimes an ad—even if you're bidding high on a large budget—will not show up if your listing is not relevant to that keyword.

Once you have raised your bid and your budget (10% higher than Amazon's highest suggested bid, and your ad is running for at least 70% of the day), you need to run your ads for another 14 days in order to collect the data you need.

How do you use your PPC report to optimize your ads for peak performance?

If you have plenty of data, then you need to optimize. Let’s analyze the report and begin evaluating keyword performance.

Highlight your exact match keywords in green.

Highlight your automatic campaign keywords in orange. When there is a * star in the Keyword column, that denotes the automatic campaign. In automatic campaigns, Amazon chooses keywords based off your listing rather than a list of keywords you provide.

Highlight your broad match keywords in yellow.

Amazon PPC Ad Report Example

As you go through your keywords, highlight your better performing keywords green and your poor performing keywords yellow.

Let's follow the taco holder example starting with broad match:

There are no sales from the broad match keywords. When this happens, you can only evaluate keywords based on clicks.

The keyword "taco holders set" has a 15% CTR, which is excellent. Therefore, you would highlight that keyword green.

Amazon PPC Broad Match Campaign Report

The next keyword "taco holder stand 6" has a borderline 6% CTR, but the keyword matches the product exactly. In cases like this, you should keep the keyword.

You would also highlight "taco stands set of 6" green.

The "steel taco holders set of 6" has a 50% CTR but only two impressions. Because it has such a low search volume, you would highlight it yellow.

Next, "taco maker kit" has a huge number of impressions but hardly any clicks. That makes sense because the product is not a taco maker kit. You would highlight this keyword yellow.

Apply the same techniques to your PPC campaign report. Look at sales first and then clicks.

Amazon PPC Broad Match Report Analysis

Moving on to the automatic campaign:

The keyword "taco shell bar" is a poor performer because it has no sales and few clicks.

Next, "taco rack steel" has sales, so it's definitely a green keyword.

The keyword "taco holder set 6" also has sales, so you would highlight it green. And so on...

Amazon PPC Auto Match Report Analysis

For the exact match campaign, you would highlight "taco stand" green because it made sales.

Next, you would highlight "taco bar" yellow because it has zero sales and a poor CTR.

As you can see from the results, most of the exact match keywords made sales because only the most relevant, best keywords go in that campaign.

Amazon PPC Exact Match Report Analysis

Now you have your best performers in your automatic campaign, broad campaign, and exact campaign.

How do you optimize the PPC campaigns themselves?

Step 1: In Campaign Manager, pause your automatic campaign and your broad campaign.

There are two reasons you pause rather than delete:

  1. You may want to run these campaigns again in the future.
  2. Keeping these campaigns improves the retention of keyword ranking gained from the campaign.

Step 2: Pause the keywords performing poorly on your exact match campaign.

This way, you are getting rid of everything costing you money that you don't need.

Step 3: Add your best performing keywords from your broad and automatic campaigns to your exact campaign.

Step 4: Check the suggested bid range and bid at least 10% higher than the top end of Amazon's suggested range.

Bid Above Amazon Suggestions

Step 5: Run this for another 14 days, ensuring page 1 ad placement for all your exact campaign keywords.

Remember your initial goal is to organically rank on page 1 for your best keywords. You know these are your best, most relevant keywords. Now ensure visibility with page 1 ad placement for each. As you gain sales, your organic ranking will rise.

How to Use Your First 14 Day Amazon PPC Report to Optimize Your Listing

Step 6: After 14 days, download your ad report to further optimize the specific keywords.

Keep on doing this as needed. The better you set up your PPC in the beginning, the less work you will have to do in the future. That gives you time and financial freedom.

One Just One Dime student spends five minutes a day checking PPC and that is it. He makes over $20,000 profit per month. Five minutes a day. What other job in the world has that kind of payoff? Of course it took upfront work. But because he followed the steps, he got to that point.

Free

product listing creation & optimization

worksheet

Create Amazon listings that rank and convert!

We sent it! Please check your email to download the worksheet.
Oops! Something went wrong while submitting the form
Seth Kniep

Married a pearl. Fathered 4 miracles. Fired his boss. Turned a single dime into $104,857. Today, a self-made millionaire, Seth and his team of 8 badass coaches teach entrepreneurs how to build passive income on Amazon.

Dead serious about building income on Amazon with eight successful coaches in a community of badass Amazon sellers? Join the Amazon FBA Mastery membership.

Show me →

You might also like...

More