What is PPC Amazon FBA? Everything You Need to Know
Amazon is a global online retailer with an enormous marketplace full of different sellers. It dominates the world of online selling, which is why so many merchants decide to sell their products there.
While that is a sensible business strategy, you can’t just place your products on the Amazon marketplace and expect the sales to come streaming in. For it to be a success, marketing is necessary.
Fortunately, Amazon offers all its sellers a simple marketing solution – Amazon PPC.
What is PPC Amazon FBA?
Amazon PPC (pay-per-click) is an internal advertising tool for all marketplace sellers. It allows sellers to create advertisements for their products or brand, which then get shown in Amazon’s search results (and other areas on the site). Then, every time a user clicks on the ad, the seller gets charged a small amount.
Sellers use keyword targeting on each ad to gain more targeted visibility. Of course, there are many popular keywords, which is why sellers place bids on keywords. The higher the bid, the higher the chances their ad will be displayed. It is a system that puts marketing into the seller’s hands.
Amazon FBA stands for ‘fulfilled by Amazon.’ A seller using Amazon FBA sells products on Amazon without handling the picking, packing, sending, or returns handling – that is all covered by Amazon after the seller sends the products. In addition, an Amazon FBA can use PPC advertising for marketing their Amazon store.
How Much Does PPC Advertising Cost?
Amazon charges sellers for ads on a cost per click (CPC) basis. That means you don’t pay for a displayed ad – only once the ad gets clicked on.
The commission depends on the product type, keywords, and the type of ad. Generally, you can expect to pay between $0.02 to $3 for a click.
Amazon PPC Metrics
Metrics are crucial for getting PPC right, as they allow you to understand the profitability and success of your ads. Below are some common (and valuable) metrics shown by Amazon PPC.
Advertising Cost of Sales
ACOS is a metric that tells you how much you earn vs. how much you spend. The lower the ACOS, the better. If an ad isn’t even making enough to cover the cost of running it, you can then decide whether it is worth it in the first place.
Clicks
The number of times a person clicks on your ad tells you a lot. If you have a low click rate, it indicates your ad either isn’t good enough or isn’t targeting the right people. If you have lots of clicks but few sales, it shows there’s an issue with your product page.
Impressions
Impressions tell you the exact number of times your ad is displayed – it doesn’t include any interaction. This metric is helpful as you can use it to determine whether your keyword bid is high enough. You may need to set your bid higher if you have few impressions.
There are many available metrics for Amazon sellers using the PPC advertising service. Of course, seeing the information and then being able to use it to boost your campaign are two separate things. An Amazon consultant can help you utilize these metrics to increase your visibility and target your ideal customer.
The Benefits of Amazon PPC
Beat the Competition
Most Amazon users make the most of Amazon PPC campaigns. Without it, you stand against much more competition. PPC doesn’t just put you on the same level as everyone else; if you use it right, it also gives you an advantage. It’s all about producing a striking ad that targets your ideal customer.
Reach the Right People
Due to keyword targeting, you can target your exact audience with PPC ads. By using the right keywords, your ad will show up when a potential customer searches for product listings similar to yours.
Control Over Advertising
With Amazon PPC, you have more control over how you market your online store. For example, you can choose which keywords to target, what type of ads you want to display, and how much you will spend advertising your individual products.
Informative Insights
PPC metrics provide invaluable insights into the desirability of your products, the success of your ads, and your target audience. This data paves the way for more focused marketing going forward.
Only Pay Per Click
Amazon PPC ads don’t require a monthly, weekly, or yearly fee – you are only chargers for costs per click. It’s an advertising system that you only pay for when results are guaranteed. If your ad gets few impressions and no clicks, you won’t pay for anything.
The Different Types of PPC Ads
Amazon offers three types of PPC ads to choose from: sponsored products ads, sponsored display ads, sponsored brand ads.
Sponsored products ads show in product detail pages and Amazon search results. As you would expect, these ads market specific products.
Sponsored display ads show on product detail pages, near search results, and on other websites.
Sponsored brand ads can appear anywhere on the Amazon page. Instead of advertising specific products, they promote the brand as a whole.
On top of these three types of PPC ads, you can also choose between manual campaigns and automatic campaigns. With automatic campaigns, Amazon chooses your keywords and runs the ads for you. They run automatic targeting for sellers that ensure they reach their desired audience. It is a great option for new sellers.
Manual campaigns, on the other hand, put you in control. This is the option where you place bids on keywords. An extremely popular keyword will often require a higher bid in order for the ad to display.
Using Amazon PPC: Top Tips
You now know what Amazon PPC is, how much it costs, and the benefits it provides you as a seller. What about using the advertising tool? If you’re ready to get on board with Amazon pay-per-click advertising, below are some tips for making the most of it.
Perform Keyword Research
Amazon has a keyword tool to help you perform keyword research. This part is crucial, as keywords determine where your ad gets displayed.
Budget Wisely
Using Amazon PPC requires setting a daily budget. It’s essential to choose the right one for your products and brand. If you’re just starting, you can play around with the budget to see what yields the best results.
Use Negative Keywords
You know to use keywords, but what about negative keywords? Negative keywords are the opposite of targeted keywords. You choose keywords that are not at all relevant to your products or brand so that your ad does not get displayed when a customer types those into the search bar.
Continuously Review Reports
Amazon PPC ads provide amazing insights into your audience and marketing success. To make the most of this, continuously and routinely review your reports. With this information, you can create better-targeted ads.
Is PPC Amazon FBA Right for You?
If you are an Amazon FBA seller looking for increased sales, PPC is undoubtedly for you. After all, it’s an advertising system that targets your ideal market, boosts your brand image, and reels in more customers.
Ryan Flannagan is the Founder & CEO of Nuanced Media, an international eCommerce marketing agency specializing in Amazon. Nuanced has sold $100s of Millions online and Ryan has built a client base representing a total revenue of over 1.5 billion dollars. Ryan is a published author and has been quoted by a number of media sources such as BuzzFeed, CNBC, and Modern Retail.