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How to Increase your Amazon Sales using Amazon Sponsored Ads

Want more sales on Amazon?

Today, I’m going to share what I’ve learned generating over £1,000,000 in sales using Amazon Sponsored Ads and how I’ve done it.

These are the exact techniques I’ve used to generate sales like these for our clients…

Amazon PPC ACoS

Update: March 2019 – Amazon makes a huge change

In 2019, Amazon is moving away from ordering directly from sellers, having just last week sent a snowstorm of emails confirming that, with immediate effect, it plans to stop ordering goods from them.

Vendors who have been working with Amazon for years are now having to reassess what it means to sell on Amazon, and how their relationship with the eCommerce giant will work as it moves away from 1P (1st Party Sellers) to 3P (third party sellers).

It looks like more businesses will now need to adapt, and sell directly on Amazon.

Amazon Ads – How can they help?

Using Amazon Sponsored Ads can help drive sales, and get brands directly in front of a much wider audience, and what’s more, you don’t need to wait months for your product to move up the Amazon organic rankings.

How to create the best campaign structure

The most important step in optimising Amazon Ads starts with the campaign and ad group structure itself.

Creating an Amazon Ad campaign is much like setting up a campaign in Google Ads.

Here’s how to do it:

Login to Amazon Seller Central, then navigate to Advertising > Campaign Manager and click “Create Campaign”.

Amazon will even give you £20 in free clicks (at time of writing).

There are 2 steps to follow:

  • CAMPAIGN SETTINGS
  • CREATE AD GROUP

First, use these campaign settings

Within campaign settings, give your campaign a name, set your daily budget (min £1), and choose a start and end date.

I usually start with a modest budget of around £15 a day, and work up from there. 

Amazon campaign budget

Next, Amazon asks you to choose a targeting type.

You can select an Automatic keyword campaign or Manual keyword campaign

Amazon sponsored ads targeting type

With automatic campaigns, Amazon decides which search terms they think you’re listings is likely to convert for.

This means you don’t bid on keywords, which can make control and optimisation rather hard.

Here is Amazon’s definition….

Automatic keyword campaign

Amazon targets your ads for 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.

Manual keyword campaign

Manual keyword campaign, on the other hand, allows you to enter the exact keywords you want to target

 

Personally, I prefer to set up a manual keyword campaign for complete control over performance. 

With a good campaign and ad group structure, you can get very granular, just like Google Ads, ensuring your products only appear when a customer’s search matches keywords you have specified.

How nice is it when you get results like this.

And this…

Note: Headline Search Ads can only be run as manual campaigns at this time.

Next, Name & Structure your Ad Groups

Ad Group structure is very important and can make or break the performance of your Amazon ad campaign.

Now, you can choose which products you want to advertise.

If you’re familiar with Google Shopping, you may be accustomed to the concept of product groups, and using these to control bids.

On Amazon’s Ad platform, a similar approach to Google Shopping applies.

Amazon Ad group

 

Set a bid

Next, move on to set a default bid.

CPC’s on Amazon are still very attractive, meaning you can generate significant incremental visibility for your products, at relatively low cost. 

Go ahead and set a low bid (£0.10 to £0.30) which we can tweak at the product level once the campaign is set up.

set amazon bids

Bid+

It’s also worth noting, Amazon has an advertising feature called Bid+.

Bid+ raises bids in your campaign by up to 50% more than your default bid when ads are eligible to show at the top of search results. More on this later.

For now, though, let’s not put all the control in Amazon hands to spend all our ad budget.  

Choose your keywords

Because you’ve selected a product or products above, Amazon will suggest lots of broad match keywords you can easily add to your campaign (which can be costly and drive less relevant traffic) – after all, not all keywords converted the same!

You can provide a keyword list yourself using one of three match types – broad, phrase or exact.

We’re going to do the later, as we want complete control over what we bid on.

Tip: One quick tip here. Most sellers looking to run Amazon ads are already active on Google search and probably Google Shopping. I like to take my best converting keywords and search terms from my equivalent Google campaign and drop them into Amazon to really sprint out of the box.

Don’t forget however, that unlike Google, which is used for informational queries, Amazon users have almost exclusive commercial intent.

So factor in search terms with buyer intent, long tail terms, product model numbers, manufacturer part numbers (MPN’s and the like).

Annoyingly, you can only add batches of keywords of one match type at a time. But let’s go ahead and add the best performing exact match terms and then phrase match terms. 

If you don’t run Google AdWords and Google Shopping campaigns and have this data to rely on, don’t worry. As you would with Google, you can carry out keyword research in much the same way, with a few nuances.  

Keyword research for Amazon Sponsored Ads

There are a few great tools for running effective keyword research for Amazon.

Personally, I like to use keywordtool.io, which looks at Amazon’s auto-suggest terms from there search bar, and rapidly pulls down various permutations of the results.

Amazon Keyword Ideas

Also, don’t forget Google Keyword Planner. Not only is it free, but it’s great for showing you estimated search volumes for a vast number of related keywords you may not have thought of.

Keyword Planner

Finally, check out https://www.merchantwords.com/ which provides access to over 170 million Amazon search terms.

Once you have entered your keywords, Amazon will suggest a bid range for each keyword.

Amazon Keyword Bids

How to analyse your Amazon Sponsored Ads and know if they are working?

To truly know if you can make Amazon ads cost in profitably (profitably being the keyword), it is important we define your break even Advertising cost of Sale (ACoS).

Like return on ad spend (ROAS) being the key metric for our ecommerce performance on Google, ACoS is the key metric of measurement on the Amazon platform.

If you’ve made it this far, well done…

Now we get in to the nitty gritty of profitability


Advertising Cost of Sales (ACoS)

ACoS is the percentage of sales that you spent on advertising.

This is calculated by dividing total ad spend by attributed 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 that you’re spending a lower percentage of sales on advertising.

To calculate your break-even ACoS, you can make a simple calculation like this:

Selling price – Costs (Amazon selling fee, Landed Cost of Goods) = Profit (before PPC)

So our breakeven AcOS is:

(Costs / Selling Price) X 100.

 

For example:

Say, we’re selling a t-shirt for £20. It costs us £5 into the warehouse & our Amazon selling fee is 15%.

Costs (£8) (£5 landed cost + £3 selling fee) divided by Selling Price (£20) multiplied by 100 = 40%

Amazon Sponsored Ads can improve organic sales on Amazon

It’s worth noting, Amazon Sponsored Ads can be a complementary part of your Amazon selling strategy, and they are particularly useful for a number of reasons.

Yes, you can advertise your whole catalogue on Amazon as you may do with Google Shopping.

But like Google shopping, not all products will cost equally, and so Amazon’s paid platform can be particularly useful to:

  1. Launch a brand new product with no sales
  2. Promote and clear through slow-moving lines which have poor organic visibility

As a product gains sales, even through Amazon paid ads, it feeds into Amazon’s overall ranking algorithm, it gains sales history and reviews, and it increases the propensity with which the product will rank organically.  

 

The Amazon Search Term Report (find out exactly what your customers are typing and searching for)

In Google Ads, the search terms report is tucked away, but on Amazon, its well and truly hidden.

In fact, you have to go into another section of the interface to download it. How 1990’s.

Download the search term report within Reports > Advertising Reports:

Download Keywords

In the Search Term report, you will see the keyword and match type which triggered the ad, impressions, clicks, CPC and more.

Once your account has gathered some data, this is a great way to:

  1. Find new keywords to add to your campaign based on search terms that have converted.  
  2. Surface search terms with the highest ACoS and reduce bids.  
  3. Look for opportunities to move Broad keywords to Phrase, and Phrase keywords to Exact match.  

 

What should I do if I have a brand new Amazon Sponsored ads account?

If you don’t have sales in your account yet, all is not lost.

Use what you have. Use the data.

Sort and filter the search term report to surface keywords with traffic and find those with the best CTR (click through rate) as this is at least one signal of buyer intent.

 

How do I find more long tail, profitable keywords?

Simple.

Go through the search term report, and look for search terms with conversions. The lower the ACoS, the better, as the more profitable they will be.

You can then add these keywords into the Campaign/Ad Group that best suits, keeping your structure as granular as possible, or some advertisers prefer to split similar keywords out into a new campaign as exact and/or phrase match terms and then bid more aggressively on them.

Drop your search term report into https://wordcounter.com/ to find keyword patterns and use these keywords in your title.

Sales attribution on Amazon

One other thing to bear in mind when reading the search term report is Sponsored Product attribution.

Amazon’s paid advertising platform will attribute a purchase to one of your ads even if a customer clicks one of your ads and then purchases the item.

Within the Search Term report, you will see columns containing the “Other SKU Sales” where a user clicked on your ad and purchased different items you listed.

For instance, the user may have clicked an ad for “Electric BBQ A” and gone on to purchase “Electric BBQ B”.

 

The 7-day Amazon Attribution Window

Like Google Analytics and other eCommerce tracking solutions, Amazon has an attribution window, in this case, seven days.

It means Amazon allows up to seven days to pass between ad click to sale, and you will still see the conversion in the Sponsored Products interface.

Amazon sponsored ads also provide a 1-day, 7-day and 30-day attribution window in the “Campaign Performance Report.”So you can analyze sales differently, should you want to further understand your customer funnel.

 

Understanding Amazon ASIN’s

Firstly, what is an ASIN?

An ASIN is Amazon’s unique identifier (like SKU) for every product/listing they sell. An ASIN can usually be found on the product page and in the URL of a product as highlighted below. It usually starts B0…..

Amazon ASIN

If you see an ASIN in the search term report, this usually means a user came from that product page via your ad and then purchased your product.

Unfortunately, you can’t bid on ASINs directly, so don’t try.

 

How to reverse engineer your competitor’s listings?

I often look for clues in competitors listings to help improve my own.

A good starting point is to perform a search for your target keyword.

For instance, if I was selling ceiling lights, I can glean information from the best performing organic listings on the Amazon search results page by analysing:

  1. Title (you get away with a much more keyword rich title on Amazon than you would on Google).
    • Use words you see in the search term report to help improve your product titles (and put the most important keywords to the left of the title)
  2. Customer reviews
  3. Answered and unanswered questions
  4. Price
  5. Delivery options
  6. Handling time (how long it takes the seller to pick, pack and ship the goods)
  7. Bullets points
  8. Description

Another clever tactic is to create parent & child variations like this seller has done for different sizes.

Now, because all 3 sizes are syndicated into one listing, the reviews are consolidated giving the page a better chance to rank well.  

Amazon Listing

Negative Keywords

Just like Google AdWords, you can prevent your ads from showing for search terms you don’t want by adding negative keywords.

You can add these at the campaign or the ad group level.

Fortunately, on Amazon, unlike Google, you’ll find way less waste and search terms lacking commercial intent. It’s Amazon after all. Users only come here to shop and buy, not to look for instructional videos, company contact details and so on.

Negative Keywords

Keywords or search terms with 0 sales can be great candidates to block using negative keywords. Look for these and add them.

Then look for search terms that are irrelevant, and add these too, prioritising those with high spend.

Finally, check if your products are indexed

Go to Amazon, and search for “a keyword” plus your ASIN.

If you show in the result, you are indexed for that keyword in Amazon.

Epic Win

If you don’t show, Amazon hasn’t indexed you for that particular keyword.

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