But, PPC is a beast: there’s oh-so many terms to know, reports to read, and options as to how you create and run your campaigns, albeit some methods are more complicated than others.
Today I will show you how Amazon PPC works so that you can get your products in front of the right shoppers and move your Amazon FBA store to profitability.
What I will show you is an overview of one of the many PPC strategies we teach in our Amazon FBA Mastery membership in which we coach warriors like you how to build, launch, and grow their own Amazon FBA store.
Amazon Keywords and Keyword Targeting
PPC is most often used in the form of keyword targeting campaigns.
A what now?
Keywords are words or phrases shoppers use to search for what they want to buy. Keywords can be a singular word or product, such as “pool float”; they can also be a longer string of words, such as “inflatable pool float for large dogs”. You can actually stuff tons of keywords into a single keyword phrase.
Before you create your product listing and PPC campaigns, you will research and compile a laundry list of keywords related to your product. Note that different shoppers search for the same product dozens of different ways. You must know those ways. And those ways become keywords.
For instance, shopper Bobby McGee might search “dog pool float” on Amazon.com, whereas shopper Lucy Pickleberry might search for the same product with the keyphrase “pool float for big dogs”. Bobby and Lucy are shopping for the exact same product—unless Bobby’s buying for a chihuahua—and they’ll arrive at similar search results, but they shop by two distinct keyphrases.
To capture Bobby, Lucy, and the rest of the canine water relaxation market, you would create Keyword Targeting PPC campaigns for both keyphrases (you could also create product targeting campaigns).
Keyword Targeting PPC campaigns work like so:
Amazon Bidding and Ranking
You will pay Amazon for your product to appear in search results when customers search a related keyword. When it does, that product will appear as a sponsored ad.
When a shopper clicks on your sponsored listing, you pay Amazon for that click, regardless of if that click results in a sale.
How much do you pay per keyword?
Short answer: it depends.
You want your product to appear at the top of the first page of search results. You want to be here:
Where your product appears in search results is called rank.
In order to rank in that first spot, you must outbid the other sellers who are also paying for that keyword. The seller with the highest bid for a particular keyword ranks in the first spot, the seller with the second highest bid gets the second best spot, etc.
If you sell in a less competitive market, you likely won’t have to pay too much to be the highest bidder and thus achieve the coveted first spot on the top row of page one of search results ( say that five times fast 😅). This is ideal, so long as your product has shopper demand.
PPC is a must if you want to succeed on Amazon FBA. It’s also a complex, multi-faceted machine. Gain access to dozens of top-tier PPC strategies, step-by-step training to monitor and optimize your campaigns, and one-on-one coaching to troubleshoot particularly tricky aspects of Amazon's in-house advertising in our Amazon FBA Mastery membership. Our team will show you how to bring your own Amazon FBA store to life, start-to-finish. Join our team today.
ACOS stands for advertising cost of sale; it’s the relationship between how much you spend on advertising to achieve sales. Put another way, for each sale that you make, how much of your profits went to advertising to get that sale?
With ACOS, lower is better. For instance, let’s say you sell a product for $50 and your profit from that product is $20 (40% profit margin, excellent!). If you then spend $15 of that $20 on your PPC campaigns, your ACOS for that sale is 75% ([$15 ÷ $20] x 100 = 75%). Yikes 😨
This is in-part why we teach our students to find products with at least a 40% profit margin: you must have enough money to start up some expensive advertising campaigns, at least for a little while.
In the long run, you’d be much better off, and more successful, if your ACOS was 25%—if you were only spending $5 out of $20 on your campaigns.
But for the time being when you first launch your product and ppc campaigns, your ACOS will be, with 99% certainty, much higher than you would like it to be or is sustainable.
And that is ok. Because when you first set up your PPC campaigns, your goal is to collect intel on the ways in which Amazon customers shop and how your specific niche customers will discover your product. This data can only be gleaned from creating high ACOS PPC campaigns—bidding aggressively on keywords to get that coveted top ranked spot—and then analyzing your advertising reports.
Amazon Advertising Reports
After you’ve run your initial campaigns for about a month, it’s time to see how your keywords are doing and what kinds of views, clicks, and sales they’re bringing you. This will inform you of how shoppers in your niche shop and if your ad spend is being used effectively. Then you can adjust.
Regardless, you will get a wealth of data. For instance, if a keyword brings you high views, clicks, and conversions, that is a strong keyword. If a keyword brings you high views but few clicks, shoppers who search that keyword might not be looking for your product. You might also find that a keyword gets high views and few clicks, but as many conversions as views. In that case, that keyword is probably strong for your product, but your listing might need revamped. Specifically your main product photo may need a makeover 🖼️💄
Regardless, the amount you can learn from your advertising reports is incredible!
From that data, you can finally adjust your bids on the keywords you’ve assessed, then rinse and repeat. Each time you assess your findings and adjust your bids accordingly, you are progressively moving your product to greater profitability.
You see the final piece of the proverbial PPC puzzle is that as your sponsored listing gets more and more clicks that result in more and more conversions for a certain keyword, Amazon’s algorithm understands that your product is a strong match for that keyword. And overtime as your product is proven to be that successful match again and again, your organic—non-sponsored, non-ad—listing’s rank improves.
And as that organic listing’s rank grows, you can back off of your PPC ad spend for that keyword, thus lowering your ACOS and ensuring that more of your profits stay in your bank account 👍
You only need your sponsored listing to rank highly until your organic one does as well.
What I have just presented is an extremely quick overview of the intricate system that is PPC (get an in-depth how-to on our main strategy here). However you could fill dozens of full shipping containers with all the attributes and finesses you should know about PPC in order to be successful.
How do you ensure that you get all the info you need—in the order you need it, when you need it—and that that information is accurate?
You become a Just One Dime student. Our Amazon FBA Mastery membership is your comprehensive how-to in building and running your own Amazon FBA business. We will show you our insider PPC strategies that can put you miles ahead of your competitors, we will help you optimize your product listing, we will even show you how and where to expand your FBA store off of Amazon. And if you’ve already started your FBA journey, don’t worry: the bulk of our membership can and will still help you take your store to the next level.
If you want to achieve a life of financial freedom, we will help you. Sign up to speak with a member of our team today to get started at JOD.com/apply.
What’s your biggest hurdle when it comes to PPC? Let me know in the comments.