Amazon marketing falls into two main categories: Search Engine Optimization (SEO) and Cost-per-Click (CPC) ads (also called Pay-per-Click or PPC). Today, we’ll be diving into Amazon CPC campaigns. At etailz, we’ve seen Amazon CPC ads increase our partners’ sales up to 30%. They’re kind of a big deal.
How Amazon CPC Campaigns Work
CPC ads operate on a bidding system. Brands or marketing agencies choose keywords that relate to their product and then bid on it. When shoppers search a phrase that contains the keyword, Amazon weighs product relevance, or how well the product performs organically, with the bids. Of the products with high relevance to the search terms, the brand with the highest bid will win the ad placement on the Search Engine Results Page (SERP). No matter how large your bid is, if you win the placement and a shopper clicks on the ad, you will only be charged $0.01 more than the next highest bid.
We suggest updating your keywords and maximum bids at least weekly, ensuring your keywords are still relevant and adjusting your maximum bids to elicit the results you need. Pay extra attention to your keywords and bids during peak shopping seasons, like Prime Day and the Q4 holiday season.
Types of Amazon CPC Ads
Conversion rates are higher on Amazon than on search engines like Google because shoppers have a stronger intent to buy when they go to marketplaces. Amazon CPC campaigns allow you to capitalize on marketplace traffic by placing one of three types of ads in front of potential customers.
Amazon Sponsored Products Ads
Sponsored Product ads give you the most bang for your buck because they offer nine opportunities per page for your ad to get a placement. That means there’s a good chance your ads will be seen and draw in shoppers, helping build relevance quicker.
Amazon Sponsored Brand Ads (formerly called Headline Search Ads)
Sponsored Brand ads appear at the top of the SERP, making them the first thing shoppers see after entering their search terms. Headline Search Ads are a great way to grow brand recognition, but because they have only one placement per page, they’re very competitive, making it tough to get traction.
Amazon Product Display Ads
Product Display ads are good for building impressions, but they have a poor conversion rate because by the time shoppers see it, they’re already in a listing and inclined to buy the product they clicked on. Nevertheless, Product Display Ads help build brand recognition with a targeted audience, helping you compete against rivals over the long term.
Determining Your Amazon Strategy
Before you start, define your objectives so you can create a purposeful Amazon strategy. With CPC campaigns, that means asking yourself do you want to focus on increasing brand awareness or boosting conversion rates?
If you already have good brand recognition, your marketing efforts can be more specific and focused on building relevance. Identify very specific keywords, branded and non-branded, to bid on. We call this “refining your traffic.” Consumers already know what products or services you offer, so your Amazon marketing can focus on winning ground in your category. This strategy also tends to be less expensive than the alternative because more specific keywords have less competition than more general terms.
If your brand is relatively unknown, you want to spread the word to as many people as possible. Rather than refining your traffic to a targeted niche group to drive conversion rates up, this strategy’s goal is making impressions. Bid on more general keywords, especially non-branded keywords, so that you can place your ads in front of as many shoppers as possible. Initially, your return may not be as high and bidding on general terms becomes expensive, but you will develop brand recognition, helping you gain a foothold in the market for the long term.
The Big Picture
Running and optimizing Amazon CPC campaigns is a crucial part of successful marketing, but their impact is magnified through a holistic marketing strategy.
Think about it: CPC campaigns are the midpoint in a consumer’s journey. First, off-site marketing draws consumers to marketplaces, where they see CPC ads. They then click on the ads and enter listings, where compelling photography and copy make the final sell, convincing shoppers to buy.
If you invest in quality marketing at every stage, you can increase the traffic entering listings and drive conversion rates up, ultimately growing your total orders.