Amazon Pay Per Click (PPC) Advertising

This Post is part of the “FREE Wholesale Training Course”. You can view the entire course listing and introduction to the course here.

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Module 3: Value Propositions

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You’ve been doing your research on some wholesale products. You’ve found a product that has has decent margin and minimal competition. It’s a good product, and it seems like people should be buying it. But, where’s the sales? Why aren’t people buying it?

Thee are typically three reasons a listing isn’t selling:

There aren’t enough people looking at the listing.
The price is too high.
The listing has poor information on it (image, description, bullet points, etc).

You look back at the listing, and it seems like the price is right. The listing looks OK. It’s not amazing, but it’s good enough where people should be buying it. How in the world can we get this item selling?

Sometimes everything on the listing is perfect, and it’s still not selling. This means you need to look at one thing:

The traffic. There aren’t enough eyeballs on the listing.

There is one quick and easy way to immediately drive traffic to a listing:

Pay Per Click Advertising (PPC).

In this section of module three, we will introduce when to use PPC, and basic instructions to get your first PPC campaign going. There are a lot of advanced PPC things you can do, which won’t be covered in this module. Why? This is honestly a topic I don’t feel 100% comfortable saying I’m an expert in. I’ve done a decent amount of Google Adwords campaigns over the years, and a lot of the same concepts apply with Amazon PPC. But, I wouldn’t call myself an expert at Amazon PPC. I recently took a PPC course by Brian Johnson at the Sponsored Products Academy, which goes through the ins and outs of PPC advertising. He goes through it more thoroughly than I could, because he knows the subject matter much better than I do.

That being said, I will go over how to setup your first PPC campaign, which should give you a nice head start.

What is PPC Advertising?

Right now, you might not have a clue what PPC advertising is. Let’s change that right now!

PPC advertising is an advertising method where you pay to put your Amazon listings in higher search rankings. You only pay when someone actually clicks on your listing. This means your listing could show 1,000 times, and if only 3 people click on the listing, you only pay for the three times people clicked on your listing. The amount you pay per click is dependent on more Amazon “black box” factors. Here’s some known factors on how much you pay:

The number of sellers competing on the keywords you are targeting.
The amount of money other sellers are willing to spend on the keywords you are targeting.
The relevancy of your product to the keyword being searched.
The click through rate (number of times customers actually click on your listing when they see it).

You’ll have the ability to set budgets and other limits to how much you want to spend. In general, the more you spend, the more traffic you’ll get to your listings.

Your PPC advertisements only have the ability to show when you control the Buy Box for a product. In a case where you are the only seller, you want to make sure you keep the price steady, so Amazon doesn’t suppress the Buy Box on your listing. When you are competing with other sellers on a listing, you want to ensure you are priced competitively enough to be able to control the Buy Box. When someone else controls the buy box, your advertisement won’t show.

The bottom line is, you pay for PPC advertising on products in your catalog by targeting specific keywords people are searching for. That payment makes your product appear in the sponsored listing areas of searches:

Which in turn drives more people to your listing, which can turn into more sales.

When should I use PPC Advertising?

On every product! No, seriously, it really depends on a few things in relation to your products. Here’s the situations I would recommend doing PPC advertising:

You are bringing a new product to market. PPC advertising will bring more traffic to your listings, which in turn can give you more sales on the product. More sales you have, Amazon rewards you by making your listing show higher in search results and more free organic traffic.
You have products that haven’t been selling, and you feel they need more traffic. Sometimes you make a bad purchase. The item may have looked good at one point, but now you just need to liquidate the product as quickly as possible. Running PPC advertising may give you the boost you need to sell through the product.
Long Term Storage Fees (LTSF’s) are coming up. If you overstocked on a product, and are subject to pretty hefty LTSF’s, running PPC advertising can help move through some of the product. The way I look at it is – take the amount you would have spent on LTSF’s and invest it in PPC. It may hurt your margins. But, if you didn’t sell through the product, you would have had to either remove the product from Amazon’s warehouses (which means you can’t send it back in for a period of time), or pay the fees. It’s best to use that money for PPC instead of LTSF’s, and free up the working capital.
Your margins are high enough on the product to consistently support PPC advertising. If you can just break even on optimized PPC listings, it’s a win. PPC gives you more exposure, which potentially gives you more sales. When you have more sales, your listing rises in the search rankings. Higher search rankings give you more free organic sales. This of course only works with products you can consistently buy over and over again like wholesale.
You are using it as a competitive advantage / value proposition. There are two sides of this. When attempting to land a wholesale account, you may notice no one is using PPC advertising on any of the products. You can offer this as something you can do to improve sales on Amazon. If you already have a wholesale account and you are competing against other sellers, you can use this to potentially land an exclusive deal with them. If no other sellers are running PPC advertising on a listing, you can mention to the brand owner that they are losing traffic and sales when other sellers have the buy box. Remember, PPC only runs when you control the buy box. If you are doing PPC and none of the other sellers are, when those other sellers have the buy box, traffic is being lost to the listing.

Overall, you should use PPC whenever there is an advantage for you to do so. It makes sense to run PPC advertising on most products that have healthy margins when purchasing directly from brand owners.

Amazon Campaign Manager

Now that you have an idea of when to use PPC advertisements, lets dive into how to setup your first campaign. Let’s introduce you to the central place all PPC advertising is housed: Campaign Manager.

To visit the Campaign Manager, click on “Campaign Manager” under “Advertising” in Amazon Seller Central.

On this page, it will show all of the PPC campaigns you’ve created. Once you have some going, it will look like this:

Below, we will break down what each area of the page entails:

Campaign. A campaign is a set of ad groups under a common advertising budget. Campaigns are used to organize your products (ads) so that you can accomplish your desired business goals
Campaign Status. A campaign can be in one of the following states: running, paused, ended, archived, scheduled, incomplete, out of budget, or payment failure.
Campaign Targeting. This is broken up into Manual and Automatic targeting. Manual targeting: Your ads are targeted based on the keywords you choose. Automatic targeting: Amazon targets your ads to all relevant customer searches based on your product information. You can download a report of the customer search keywords that resulted in clicks on your ads.
Start date. This is when you start the campaign
End date. This is when you want the campaign to end.
Daily Budget. The amount you are willing to spend on a campaign in one day.
Spend. The total click charges for a campaign.
Sales. The total product sales generated within one week of clicks on your ads. You can view the individual sales totals for advertised products and other products in the Campaign Performance report. Sales data can take up to 48 hours to populate. As a result, sales data is not available in the “Today” date range and may be delayed in the “Yesterday” date range.
ACoS. ACoS is the percentage of sales that you spent on advertising. This is calculated by dividing total ad spend by total sales. ACoS = total spend ÷ total sales x 100. For example, if you spent $2 on advertising with total sales of $20, your ACoS is 10%. A lower ACoS means you’re spending a lower percentage of sales on advertising. Your sales data can take up to 48 hours to populate. As a result, ACoS is not available in the “Today” date range and may be delayed in the “Yesterday” date range.

ACoS is a pretty big number to keep an eye on. In order to break even on PPC advertising, ACoS needs to be lower than the margin for your product.

Starting Your First Campaign

Amazon has two different methods of targeting: Automatic and Manual. The standard recommended path is to start with Automatic targeting. Once you have some data from Automatic targeting, it’s wise to start manual campaigns. In this example, we will only cover how to start an Automatic campaign.

To start your new campaign, click on “create campaign”:

Next, enter a campaign name, which should describe the products you are advertising. Set a daily budget for this particular campaign. Don’t short yourself too much – spend at least $5 per day. Put a start date in, and an end date if you need one. Finally, choose Automatic targeting.

You can add multiple Ad groups to a campaign. Say you want to run two different Mother’s Day bundles, and want to use different bids for each one. You would create a different ad group for each bundle.

Make a name for your ad group, and put in either a product name, or an ASIN. This will allow the item(s) you want to advertise to show up in the list in the middle of the page. Next, put in a default bid. This is the highest number you are willing to pay per click on your listing. If you want the most traffic possible, put in $1 – $2. if you want to go on the budget side, choose less. Now, you can Save and finish – and you have your first PPC ad running!

More on PPC Advertising

There is a lot more on PPC Advertising I haven’t covered here. Here’s some of the things I didn’t cover:

How to setup a manual campaign.
Different match types in a manual campaign.
Reports in Campaign Manager like the search term report and Campaign Performance report.
How to manage reports in excel.
Audience Targeting.
Targeting other competitors and spying on their keywords.
Amazon Marketing Services (AMS), which is an advanced way to display additional paid ads.
Troubleshooting PPC ads.

If you are interested in any of this, I would strongly recommend the Sponsored Products Academy course. They cover all of these topics and more. I personally don’t take very many courses, so when I do, I vet the courses heavily. This is one I would recommend to anyone wanting to do PPC advertising.

Now that we’ve covered PPC advertising, lets move on to other value proposition ideas.