Amazon PPC Strategy – The Basics

Developing a basic Amazon PPC strategy is very important. In this article, we’ll provide you with an overview on how to restructure and optimize your Sponsored Product campaigns to maximize sales while keeping costs down.

Structure for Amazon PPC Campaigns

Campaigns are structured based on your product offerings:

  • Campaign Per SKU. If you have several unique products or products with different margins and goals, then we often recommend creating one campaign for each product. This is our preferred campaign structure as it offers the most control. Using this approach, you can set specific ACoS targets and budgets for each product.
  • Product Family. If you have multiple products that fall into distinct categories or have numerous products that have the same margin, prices, and targets, then you can create campaigns based on groups. Each SKU will have its own ad group that will be optimized, but campaign performance for a product family can be checked to quickly see if targets are being met.
  • Simple. Sometimes sellers are in a specific niche and carry inventory with thousands of similar SKUs. In such a situation, we recommend you create one auto, one manual, and one phrase campaign. Each SKU will have its own ad group that you can optimize, but each of those ad groups would roll up into the three overall Amazon PPC campaigns.

We use a Funnel Strategy to manage Auto, Phrase, and Exact campaigns, which is shared and explained below.

Auto Campaign PPC Strategy

Think of this as the first stage of the funnel.  Auto campaigns are a great way to find new keywords that could potentially convert. As your sales history expands or if you modify sections of the product listing, Amazon could list you for other keywords that they think are relevant that you can then transition to your manual campaigns.

Any keywords that convert well, move these to manual campaigns as phrase  or product targeting matches.  We’ll go through why we recommend setting it as phrase instead of broad matches below.

Manual Phrase Campaigns

Any converting keywords from Auto campaigns should be placed into a manual campaign as a phrase keyword under a phrase ad group next. Phrase keywords are used instead of broad for two reasons:

  1. Now you’ll have the specific keyword that the customer searched for, so you’d want the more focused phrase match over broad match.
  2. Any keyword that is in the manual campaign should list as a negative keyword in the auto campaign (there’s currently only two types of negative keywords which are negative phrase and negative exact). If you use broad in the manual campaign, you can’t set a broad negative keyword in the auto campaign. The use of negative keywords is to ensure that the two campaigns don’t compete against each other and cause you to spend more with whatever campaign wins (usually the manual campaign).

Anytime you see a customer search term like “b00xxxxxxx” from your auto campaigns, this means that they were on another product listing and then clicked on your ad (in this case, ASIN b00xxxxxxx).  These can be added directly into a product targeting manual adgroup.

Manual Exact Campaign Strategy

After discovering phrase keywords running in the phrase campaign, you’ll need to track the exact customer keyword searches that convert well and move those to an exact match ad group. This will allow you to target these exact search terms with optimum bids. Any exact keywords placed into the exact ad group should be placed as a negative exact in the phrase ad group. This is the last part of the funnel where you’ll now have numerous focused keywords that convert well and have precise control of the bids to maximize sales while keeping advertising costs down.

Phrase & Exact Keyword Optimization Strategy

After filtering down the funnel to the exact keywords, we recommend you individually set the bids of every keyword to balance total sales and ACOS. One specific keyword may have a poor ACOS so you can reduce the bid (this will reduce the ad placement but should decrease ACOS, making it financially viable to keep running). This is usually a better alternative than just pausing the exact match with a poor ACOS. On the other side, you’ll want to increase bids for exact keywords that are performing well so they get better ad placement, increasing total sales.

Negative Keywords

We recommend using negative keywords to factor out any keywords that aren’t converting. For example, using negative phrase or negative exact in the auto campaign for any keywords Amazon feels is relevant but aren’t translating into sales. Another example is for the phrase campaign; say that you have “warm gloves” as a phrase match and someone searches for “red warm gloves.” Your ad would appear but might have poor conversion if your gloves aren’t red. For an example like this, you could use a negative phrase to factor out anything that has the search term “red” or if you don’t want to be that general, you can use negative exact to factor out “red warm gloves.”

Amazon PPC Software

At Ad Advance, we’ve developed a proprietary tool that uses advanced algorithms to analyze the keywords for Amazon PPC and then moves keywords through the Funnel structure (learn more about keyword funnel structuring here). As keywords convert, new bids are calculated based on several metrics, which ensures keyword, ad group, and campaign targets are met to keep costs down while maximizing sales.

Feel free to review your current Amazon PPC performance with our free campaign review tool.