Sponsored Products: 10 Tips for Amazon PPC Optimization

When structuring an Amazon Sponsored Products campaign (or conducting Amazon PPC optimization in general), sellers are faced with the question of how to organize their campaigns and ad groups.

The right structure is dependent on the size and homogeneity of the seller’s selection, the seller’s strategic targets, and other points of consideration. However, there are guidelines that you should follow when structuring your campaigns—we’ve listed our suggestions below:

1. Structure your campaigns consistently

Your PPC campaigns provide a rough structure for your ad activities. This can be both good and bad news. Typically, a campaign structure will provide you with a set of characteristics that follow one or more of the patterns below:

• By product category (for example: men’s shoes, keyboards, cameras, etc.)

• By brand (for example: Nike, Adidas, Puma, etc.)

• By top sellers (products that pull in the most sales, e.g. top 10)

It’s important to be consistent with whichever organizational method you use for your campaigns. If you change your organizational structure, it could lead to repeat ads. For example, when you create one campaign by brand and another by category, you could have the same products appearing in multiple campaigns.

2. Group similar products in the same ad group

A set of products and a set of keywords are made for each ad group. Because all products should appear for that keyword set, it’s important to keep in mind that you should choose a set of products that contextually fit those keywords. So, you should put all products into an ad group that are suitable (to be found via search) for those keywords.

Note: If you use this method, be careful when analyzing profitability of your Amazon ads. Even though the products in the same ad group have similar keywords, they might have very different profit margins – which in turn would impact the profitability of your ads. That’s why you should always know what a good ACoS for your Amazon ads would be before you start any Amazon PPC optimization.

3. Create different ad groups for keywords with different levels of generality

The larger your selection of products is, the larger your number of keywords with varying levels of specificity will be.

Example: A seller has a selection of shoes

• For all shoes, the keyword “shoe” is relevant

• For some of the shoes, the keyword “men’s shoes” is relevant

• For some men’s shoes the keyword “men’s sneakers” is relevant

Now if the keyword ‘men’s shoes’ were placed in all ad groups for men’s sneakers, boots, loafers, etc. then you’d easily lose track of which ads are shown for which keyword bids. 

A simple optimization step is therefore to place more general similar keywords in separate ad groups (for example: ‘men’s shoes’, ‘shoes for men’). The top-selling products, for example, can then be included in these ad groups:

Campaign 1: Men’s shoes for Product Category 1

• Ad Group 1 (“men’s shoes”) for general keywords of that product category (“shoes for men,” “men’s shoes,” etc.) and top sellers;

• Ad Group 2 (“men’s sneakers”) for specific keywords (“sneakers for men,” “men’s tennis shoes,” “men’s joggers,” etc.) and corresponding products;

• Ad Group 3 (“men’s boots”) for specific keywords (“men’s boots,” “hiking boots for men”) and corresponding products.

4. Let Amazon identify relevant keywords for you in an automatic campaign

Run an automatic campaign as well as a manual campaign with the same exact products. Let the automatic campaign run for a couple of days/weeks and then evaluate which search terms have generated the most sales. Then transfer these search terms into your manual campaigns.

Our recommendations: 

1. 1 automatic campaign with 1 automatic ad group

2. 1 manual campaign with 3 ad groups: broad (keyword), exact match (keyword), and ASIN targeting

3. 1 manual campaign with 1 ad group for category targeting.

The purpose of each of these campaigns and ad groups is as follows: 

1. The automatic campaign performs target research;

2. Then those targets can be harvested andrefined through manual campaigns and ad groups (broad match keyword or category targeting);

3. Only the top targets are added to the ad groups with the highest degree of control: an exact match keyword or ASIN ad group.

5. Optimize listings to ensure ads are shown for all relevant search queries

Amazon likes to be sure that the ads being shown on their site are relevant for the customer. This is why generally ads can be shown only for keywords that are also contained in the product listing text (title, attributes, description, search terms). 

Check whether keywords that don’t have any impressions are contained in your product listing text. If that’s not the case, then you should add those keywords to the listing text to make sure that ads will be able to be run for them. This will help you reach a broader potential customer base.

6. Eliminate unwanted search queries to reduce costs

Amazon ads aren’t always shown for only those exact search terms that you’ve bid on as a seller. Search queries can vary from the keywords you’ve entered according to match type. In order to prevent unnecessary costs from occurring, there are two options:

• Set keyword match types

• Set negative keywords

For Sponsored Products ads, Amazon gives you three match types to choose from:

Broad Match: The Sponsored Product ad can be displayed if the query includes all words that are part of the  a keyword. The order of words doesn’t matter. In addition, the formula considers spelling variations, misspellings and synonyms as matches.

Phrase Match: The ad can appear when a search query includes the keyword(s) entered (i.e. one or more words) in exactly the order given. Close variations (e.g. singular/plural) are considered matches.

Exact Match: The ad can only appear when a search query matches exactly the keyword given. Plural and singular forms are considered exact matches here as well.

Negative keywords

Amazon also makes it possible to define negative keywords. Your ad will not appear for user queries that contain these keywords. For negative matches, the types are slightly different from those available for positive keyword matches, with no negative equivalent of the Broad Match option:

• Negative Exact: Your Sponsored Product ad will only be excluded if the search query exactly matches the negative keyword you’ve entered, or with a minor variation (for example, singular plural). This is the negative equivalent of Exact Match.

• Negative Phrases: Ads will be excluded if the search query contains the negative keyword as a part of the phrase or in whole. This is the negative equivalent of Phrase Match.

7. Track your PPC spend based on product performance

In most cases, there are many different products in one ad group that share the same keywords. As you run your campaigns, it will become clear over time which products sell best within any given ad group. 

A key goal of your Amazon PPC optimization should be targeting the maximum number of sales with that ad group by slowly removing products with poor performance from the ad group. This way, you’re concentrating impressions and clicks on those products which will more effectively convert clicks into purchases, and avoiding spending money on products with low conversion rates.

8. Define your target Advertising Cost of Sales (ACoS)

Your target advertising cost of sales (calculated as ad spend divided by ad sales) should at least be generally laid out. It can differ according to the purpose of your campaign. If you’re primarily targeting profit, then your target figure will be based upon your profit margin.

Target figures for advertising cost of sale are typically between 5% and 15%. In contrast, if your goal is to advertise a new product and improve its organic visibility, then you might want to pay more for your sales or even take a loss in the short term in order to secure profit over the long term. Your target cost of sale in such cases would be up to 100%.

9. Track and optimize your bids (CPC)

The optimal target bid differs according to keyword. That’s why every bid can be controlled separately for every keyword in manual campaigns. Keep in mind that a solid amount of data is needed as a basis for evaluating bids. That’s why you should wait at least one week between adjusting bid prices. There are a few general principles for CPC bid optimization:

• If the average cost of sale (ACoS) for a keyword is above the target value, you should lower the bid in order to test whether ad spend and sales can be brought to a more desirable ratio.

• If the ACoS is below the target value, then test whether the ad’s reach—and sales along with it—can be expanded by raising the bid price.

• If keywords aren’t generating any sales or are getting too few impressions, test whether a higher bid can make them active. A higher bid can result in a more attractive (higher) placement, leading to more impressions and clicks.

• Keywords that only generate costs and no conversions—or that can’t be adjusted into a profitable bid price range—should be stopped.

Campaigns should be updated regularly in this way in order to reach the sweet spot where ad spend and sales reach a desirable ratio.

10. Start bidding on new keywords with a higher price

If you’re adding a new keyword, then you should set a higher bid price at first (usually at least $0.75, depending on the category). New keywords don’t yet have any click history for Amazon to take into consideration when controlling ad display. In order to get the keyword started and have it generate some impressions and clicks, a higher bid price must be assigned to it. As soon as some click history has been built up, this bid price can often be lowered in order to successively find an optimal bid price.

Bonus Tip – Amazon PPC Optimization Podcast

Check out our podcast together with Brand Builder University where Thomas Ropel, Perpetua CMO, shares his best tips for Amazon PPC optimization.