One of the simplest and fastest ways to increase your sales on Amazon is by running PPC advertising campaigns. They produce faster results than SEO and can often result in more sales. The only drawback is that you have to pay for every click, and this means that a small portion of your sales go straight to Amazon.
But you should still by all means be running PPC ads, as they significantly boost sales, create more brand awareness, and even help your organic listings perform better.
Because of the cost directly associated with PPC you want to ensure that every campaign is fully optimized and performing at its highest potential, and to determine this you need to be measuring key metrics.
To determine which of your campaigns are performing well and which ones aren’t, you need to track these 5 metrics:
Sales
Impressions
Click-Through Rate
Conversion Rate
Return on Ad Spend
Advertising Cost of Sales
By tracking these metrics, you can pinpoint where your campaigns are underperforming and identify what you can do to improve them.
Sales
I guess this is obvious enough. The reason you run PPC ads is to generate sales.
With that being said, it is the most important metric that you will want to track and improve. You know your PPC campaigns are performing well when they bring in a huge amount of sales.
How to Generate More Sales
Increasing the amount of sales your PPC ads make is a combination of improving the other factors mentioned later in this blog post; Impressions, Click-Through Rate, and Conversion Rate. Once you have optimized each of these, your sales will increase.
Impressions
Impressions are simply just the amount of people that have seen your ad. Whenever your ad is displayed on a shoppers screen, it will count as an impression.
It is important that you have high impressions as it is how customers come into contact with your product. Without impressions, nothing else is possible. In order to have high sales, you need high impressions.
How to Generate More Impressions
The 2 most important factors in receiving impressions are what keywords you are bidding on, and how much you are bidding.
The way that Amazon Sponsored Products and Sponsored Brands advertising works is that you bid on specific keywords and appear in the search results when a shopper searches for these keywords, and pay every time they click on your ad. So here are some tips to drive impressions to your ads:
Bid on More Keywords
To maximize the amount of impressions your ads receive, you need to bid on a high amount of keywords that are relevant to your product. By bidding on more keywords you are expanding the amount of searches you can rank for.
There are several methods that Amazon allows you to adjust how you bid on keywords.
Close match: Amazon shows your ad to shoppers who search for keywords closely related to your products. If you are advertising “Doppler 400-count Cotton Sheets,” your ad will be shown when shoppers search for terms like “cotton sheets” and “400-count sheets.”
Loose match: Amazon shows your ad to shoppers who search for keywords loosely related to your product. If you are advertising “Doppler 400-count Cotton Sheets,” your ad will appear when shoppers search for terms like “bed sheets,” “bath sheets,” and “bath towels.”
Substitutes: Amazon shows your ad to shoppers who use detail pages of listings similar to yours. If you are advertising “Doppler 400-count Cotton Sheets,” your ad will be shown on detail pages that include “300-count Cotton sheets” and “queen 400-count Sheets.”
Complements: Amazon shows your ad to shoppers who view the detail pages of products that complement yours. If you advertise “Doppler 400-count Cotton sheets,” your ad will be shown on detail pages that include “queen comforter” and “feather pillows.”
Test with different styles and determine which strategy performs the best and brings in the best results. Analyze the data and optimize each of your PPC campaigns.
Adjust Your Bids
Another reason you may not be receiving enough impressions is that you are not winning the bid for your keywords. Increasing your bid amount may give you more impressions but you have to be careful as it can also have bad effects on your ACoS.
You can set up your Amazon PPC campaign bidding strategy with Fixed or Dynamic bids.
By using Dynamic bids you allow Amazon to automatically adjust your bids to give you a better chance of winning the spot or decreasing your bid when there is not a high chance of a sale.
Click-Through Rate
Your CTR (click-through rate) is measured by working out how many people click on your product out of the amount of people that have seen it. Clicks divided by impressions times by 100 gives you your CTR. If 100 people view your ad and 50 people click on it then your CTR is 50%.
Your ad may be receiving many impressions but if shoppers aren’t clicking into your listing, you aren’t going to make the sale. Your goal is to stop browsers mid scroll and entice them to click on your product listing. Here’s how:
Main Image
The number 1 factor in CTR is your main image. Your main image needs to stand out from the crowd and quickly communicate what your product is and what it does. There are tons of listings on an Amazon page and the shopper will click on the one that strikes them the most.
Title
Writing a perfect Amazon title is the next most important part of your CTR. Your title needs to contain your main keywords, as well as clearly state what your product is. It needs to contain all relevant information such as color, size etc.
If your product is made in the USA that can be a great addition to the title to improve the CTR.
Price
Shoppers are always on the lookout for a good deal. If your product is on sale, or is a better price than the competition, shoppers will be more drawn to click on your product than other listings.
In Seller Central you can set the “list price” higher than the price that you sell the product at and in the search engine results page the listing will display the list price with a line through it as if the product is on sale. This gives shoppers the idea that they are getting a good deal.
Shoppers are always on the lookout for a good deal. If your product is on sale, or is a better price than the competition, shoppers will be more drawn to click on your product than other listings.
In Seller Central you can set the “list price” higher than the price that you sell the product at and in the search engine results page the listing will display the list price with a line through it as if the product is on sale. This gives shoppers the idea that they are getting a good deal.
Other Factors
There are other minor factors that slightly influence your CTR such as:
Free shipping: Customers go crazy for free shipping. Nowadays we barely want to buy a product if it doesn’t come with free shipping. If your product is offered with free shipping shoppers are more likely to buy your product.
Prime eligible: Having the Prime badge on your listing can improve CTR as shoppers associate this with free and fast shipping.
Amazon Badges: Badges on your listing such as “Best Seller” and “Amazon’s Choice” can have a positive effect on your CTR.
Ratings: Would you want to buy from a product that has a 2 and a half star ratings? Probably not. Having a lot of positive ratings on your product can increase CTR as shoppers see that other customers are satisfied with this product.
Conversion Rate
Conversion Rate is the amount of people that end up buying your product after viewing your listing. If 100 people have clicked into your ad and only 4 buy, then your conversion rate is 4%. The average conversion rate for Amazon PPC is approximately just under 10%.
It is important that your conversion rate for your PPC advertising is good because you pay for every click, and if the shoppers clicking on your ad aren’t buying, then your PPC campaigns aren’t going to be profitable. Here’s what you can do to improve your PPC conversion rate:
High-Quality Images
The single most important factor in your conversion rate is images. Roughly 75% of online shoppers rely on images when deciding to purchase a product. So if your images suck? So will your conversion rate.
Images should show customers exactly what your product is, what it does and how it works. It should answer every question that your customer has about your product.
You should use as many images as you can plus one video. Here is a guide of what images to include:
Main image: As we mentioned earlier your main image is one of the most important factors of your CTR. It is the first point in which your customer comes into contact with your product, so make it stand out to them.
Infographics: Infographics should show detailed images of your product with a list of features, benefits or other important information that the customer needs to know.
Lifestyles: Lifestyle images show your product in a real life setting or in use. This shows the customer how to use your product and how it fits in with their everyday life. (Bonus tip - if you know your ideal customer's demographics, use a person that matches in your lifestyle images.)
Video: Add in a video that shows how the item works and tells any additional features and benefits.
A+ Content
A+ gives you an opportunity to include more well designed images in your product listing. By optimizing the text and images in your A+ you can showcase more of your product and increase the chances of a sale.
Description and Bullet Points
The main thing to optimize for customers is the images, but having a description and bullet points that clearly communicate what your product is, how to use it, what it does, and information like size, color etc. can help the customer in their decision to purchase as the text answers any questions they may have.
Return on Ad Spend
Return on ad spend, better known as ROAS, is how much money you make in return from your investment in PPC ads. If for every dollar you spend on PPC you make $4 in return, your ROAS is 4x. An approximate average ROAS for Amazon PPC is 3x.
Your goal is to increase your ROAS so that you are making the most amount of money from a small investment. ROAS is effectively just another way to look at ACoS.
Advertising Cost of Sale
ACoS determines how much cost is associated with your PPC sales. If you make $100 through your PPC ads, and $20 is the total cost for winning the clicks, then your ACoS is 20%. The average ACoS for Amazon PPC is around 30%.
Improving your ACoS allows you to take home more of the money that your PPC campaigns have earned, resulting in higher profitability. Here are two tips to improve your ACoS:
Bid on the Right Keywords
You need to bid on keywords relevant to your product. By bidding on unrelated keywords, shoppers may click on your listing but won’t purchase it because it is not the product they are looking for.
Test and find keywords that customers use to search for and end up buying your product. Run campaigns with these keywords and watch your ACoS improve as customers purchase more often from these searches.
Use Negative Search Terms
Identify keywords that receive many clicks that don’t result in sales, these keywords are costing you for the clicks but aren’t resulting in sales to turn that investment into profit.
By setting up these keywords as negative keywords, your ad will specifically not appear in search results containing these keywords. This allows you to only rank for the search terms that actually result in sales, not costing you unnecessary clicks.
Conclusion
Amazon PPC is essential to really skyrocket your Amazon sales and take brand awareness to the next level. By optimizing your PPC campaigns you increase sales, reduce expenses associated with PPC and overall find more success on Amazon.
If you are about to start running PPC campaigns for the first time, check out how to calculate a budget and also see why you need to bid on your own brand name.
Comments