Yes, You’re Overpaying on Amazon PPC Ads. But Do You Know How to Fix It?

Posted by Jimi Patel | April 2, 2024

Amazon is a super profitable but hyper-competitive marketplace. Being a seller in this marketplace ensures not just getting your product in front of a prospective buyer but also making sure that it stands the best possible chance of being chosen. Amazon advertising (Pay Per Click or PPC) can be of great help in this regard. It allows you to bid on keywords related to your products so that if a customer searches those keywords, your ads will be exposed to them. Therefore, ensuring proper execution of those campaigns for the guaranteed positive addition to the overall sales strategy would be, for example, the ROAS. For example, $1 on ads would give you $10 in direct sales on Amazon from this $1. And this very figure can help indicate the state of affairs with your advertising campaign.

A well managed PPC campaign can bring:

  • Better sales
  • Higher product and brand visibility
  • Lesser Advertising Cost of Sales (ACoS) over time
  • Higher brand loyalty
  • Greater brand awareness
  • Improved organic ranking

Without a systematic approach, your PPC ad spends may just as well be exhausted much before any of these benefits come into the picture. Although Amazon and advertising are synonymous, doing it right means you need experience, skill, and knowledge to enable you to get the most impact out of it without loss.

#1: Don’t start PPC without getting your listings retain ready

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Before you start running PPC campaigns, it’s crucial to make sure your product listings are fully prepared for the upcoming traffic. Firstly, invest in Amazon listing optimization to ensure that your product titles, descriptions, and Amazon infographic images are clear, compelling, and accurately represent what you’re selling. Additionally, make sure your product pricing is competitive. Conduct research to understand the pricing landscape for similar products, and adjust your prices accordingly. Competitive pricing can help attract more customers and improve your ad performance.

Finally, ensure that your product listings are fully stocked and ready to fulfill orders. There’s nothing worse than driving traffic to your listings only to find out that you’re out of stock. By keeping your inventory levels healthy, you can capitalize on the traffic generated by your PPC campaigns and maximize your sales potential.

Getting your listings retail-ready sets the foundation for effective advertising campaigns and ensures that you’re ready to capitalize on the increased visibility that PPC can bring.

#2: Advertise the right product

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Focus on items with high demand and profitability, as well as those that align with your target audience’s interests and needs. Conduct thorough research to identify which products have the potential to generate the most sales and attract the attention of your desired customers. Additionally, consider the seasonality of your products and the current trends in your niche market. By advertising the right products, you can ensure that your PPC campaigns are more effective in driving traffic, increasing sales, and ultimately growing your business on Amazon.

#3: Religiously update keywords

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Conducting expert keyword research is crucial for the success of your Amazon PPC campaigns. Keywords are the terms that shoppers use to search for products on Amazon, so it’s essential to ensure that your campaigns are targeting relevant and high-performing keywords. 

Regularly reviewing and updating your keyword lists allows you to stay ahead of changes in customer behavior, competition, and market trends. By identifying new keywords that are driving traffic and sales, as well as eliminating underperforming ones, you can optimize your campaigns for maximum effectiveness.

This ongoing process of keyword management helps you reach the right audience, improve ad performance, and ultimately achieve better results from your Amazon PPC advertising efforts.

#4: Leverage negative keywords

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Negative keywords are terms or phrases for which you do not want your ads to appear. By adding negative keywords to your campaigns, you can prevent your ads from being triggered by irrelevant search queries, ultimately saving your ad budget and improving the efficiency of your advertising spend.

For example, if you’re selling premium pet food, but you don’t offer free samples, you might add “free” as a negative keyword to prevent your ads from showing to users searching for “free pet food.” Similarly, if you offer high-end products, you might add “cheap” or “discount” as negative keywords to avoid attracting users looking for budget options.

Regularly reviewing your search term reports and identifying irrelevant or non-converting search queries can help you identify potential negative keywords to add to your campaigns. By strategically leveraging negative keywords, you can ensure that your ads are only shown to users who are likely to be interested in your products, resulting in higher click-through rates, better conversion rates, and a more cost-effective advertising strategy on Amazon.

#5: Bid on keywords with low CPC

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When managing your PPC campaigns, it’s essential to bid strategically on keywords with low CPC (Cost Per Click) to maximize your advertising budget and achieve optimal results. CPC refers to the amount you pay each time a user clicks on your ad, and bidding on keywords with low CPC can help you minimize costs while still driving valuable traffic to your listings.

By targeting keywords with low CPC, you can stretch your advertising budget further and potentially generate a higher return on investment (ROI). These keywords often represent less competitive or niche search terms that may still attract relevant and high-intent shoppers to your products.

To identify keywords with low CPC, conduct thorough keyword research using Amazon’s advertising platform or third-party keyword research tools. Look for keywords that are relevant to your products but have relatively low competition, as indicated by their CPC metrics.

Once you’ve identified these keywords, consider bidding strategically to ensure your ads appear prominently in search results while maintaining a low CPC. Start by setting conservative bids and monitor performance closely. You can adjust your bids over time based on the performance data gathered, optimizing for the keywords that drive the best results at the lowest cost.

#6: Set a budget

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By establishing a budget upfront, you can control your costs, prevent overspending, and optimize your campaign performance for maximum efficiency. To set a budget for your Amazon PPC campaigns, start by evaluating your overall advertising goals and financial resources. Determine how much you’re willing to spend on advertising each month or during a specific period, taking into account your business objectives and revenue targets.

Once you have a clear budget in mind, allocate a portion of it to your PPC campaigns based on their importance and potential for driving results. Consider factors such as the competitiveness of your niche, the seasonality of your products, and the expected return on investment (ROI) from your advertising efforts.

When setting your budget, it’s essential to strike a balance between investing enough to achieve your advertising goals and avoiding overspending. Monitor your campaign performance regularly and adjust your budget allocation as needed to optimize your ROI and maintain profitability.

#7: Experiment with different bid amounts to find the sweet spot

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By testing various bid levels, you can identify the bid amount that generates the best results for your advertising goals while maximizing your return on investment (ROI).

Start by conducting A/B tests, where you run multiple ad groups or campaigns with different bid amounts to compare their performance. Monitor key metrics such as click-through rate (CTR), conversion rate, and cost per acquisition (CPA) to evaluate the effectiveness of each bid level.

During your experiments, gradually adjust your bid amounts up or down to gauge their impact on campaign performance. Keep in mind that higher bids may increase your ad visibility and click volume but could also lead to higher costs. Conversely, lower bids may result in lower ad placement and visibility but could offer better cost efficiency.

Pay close attention to the ad placement and position metrics provided by Amazon Advertising to assess the correlation between bid amounts and ad placement. Aim to achieve a balance where your ads appear prominently enough to attract clicks and conversions while maintaining a cost-effective bidding strategy.

Conclusion

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Remember, your goal with Amazon PPC ads is to maximize the visibility of the product and actualize sales, but this shall only be possible if your campaigns are well managed. That means starting by preparing your listings and selecting the right products before even launching your first campaign. But the real work starts rolling once your campaigns are live: you need to continuously optimize your negative keywords and always target low CPC keywords, adjust your budget, experiment with your bids, and finally discuss with experienced Amazon PPC consultants to make sure you get the best bang for your advertising buck.

These best practices can help ensure your Amazon ads stand out from the crowd and competition but also hit the mark time and time again. After all, the road to PPC success is not a sprint, but really an ongoing marathon of constant analysis, adaptation, and optimization in the highly competitive Amazon marketplace.

Published by Jimi Patel

Jimi Patel, is a Co-founder and CEO at eStore Factory, an Amazon SPN certified agency that serves as a one-stop solution for all your Amazon business needs. Having helped countless brands increase sales and grow their footprint on Amazon, Jimi provides the most practical and effective solutions for your business. He is highly skilled in developing and executing plans that align with your specific business goals and objectives. When not working, Jimi enjoys practicing yoga and traveling to new places. He is an avid reader and enjoys staying up-to-date on the latest trends and developments in the e-commerce industry.

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