In the last 5 years, we’ve worked with over 5,000 Amazon sellers, and one key difference between the successful and unsuccessful ones is Amazon PPC optimization.
This guide cuts through the jargon, showing you how to optimize Amazon ads, skyrocket your sales, and crush your competition.
How Does Amazon PPC Work?
Amazon PPC is like an auction where multiple sellers compete for ad space with relevant bids and the winner pays just enough to outbid the closest competitor.
When shoppers search for products on Amazon, the platform gathers relevant listings based on search keywords.
Some of these results will be ads, marked with the label “sponsored” – these are the result of Amazon PPC.
Amazon PPC ads can also appear as alternatives to a competitor’s product.
However, unlike traditional auctions, the highest bidder doesn’t automatically win on Amazon. Instead, Amazon considers your bid and your listing quality score.
Your listing quality score reflects how relevant your ad is to the shopper’s search. This is measured by how often shoppers click your ad when it pops up and how many of those shoppers buy.
A high listing quality score can help you win placements even with a lower bid than your competitors but having a competitive bid and a strong listing quality score increases your chances of winning.
Additionally, aiming for the average CPC in your category helps you bid competitively while negating irrelevant search terms from your ad campaigns, and creating exact-match campaigns targeting relevant keywords can boost your listing quality score.
How to Choose the Best Campaign Type to Increase Sales
Amazon offers diverse ad formats to suit your specific goals. Here are the main ones:
- Sponsored Products
SP ads display your product listings in search results and product detail pages. They are perfect for driving targeted traffic to your products.
Here are some examples:
You should allocate around 80% of your total budget to SP because it offers the highest ROI and can be easily scaled compared to other ad types.
Additionally, it offers new sellers the lowest barrier to entry by not requiring brand registry for access. - Sponsored Brands
SB ads are banner-style ads that showcase your logo, a custom headline, and multiple products.
You can grab attention and build brand awareness with them.
With sponsored brand ads, you can also display videos of your products, enticing customers to explore your offerings.
For example, this baseball hat seller is using SB ads to drive traffic to their entire catalog instead of advertising only one product.
Customers who click on their ad will likely buy more products, increasing their AOV and brand loyalty.
Unlike SP ads, sellers only spend a small fraction of their ad budget on SB, usually 13% because they are more expensive and yield a lower ROAS.
You should begin using SB ads after seeing reasonable ROI from SP ads. - Sponsored Display
SD ads share similarities with both SP and SB ads. They feature only one product like SP but you can customize the image displayed and add a custom headline like SB.
Here’s an example:
One unique feature of SD ads is that they allow you to reach potential customers who have previously interacted with your brand or similar products on Amazon or other websites.
For example, you can remind window shoppers about a product they browsed with an SD ad, rekindling their interest and driving them back to your listing.
| Ad Type | ROAS | Suggested Spend |
| Sponsored Products | High | 85% of total budget |
| Sponsored Brands | Medium | 13% of total budget |
| Sponsored Display | Low | 2% of total budget |
In conclusion, the best campaign type depends on your goals.
Sponsored Products are ideal for both new and established sellers looking to boost sales, while Sponsored Brands excel at brand building. Sponsored Display excels at re-engaging interested customers and driving conversions.
8 Amazon PPC Optimization Tactics to Increase Sales
Before we show you the Amazon PPC optimization tactics we use, we thought it would be better to help you visualize their effect with a before and after case study.
This is one of the 5000 accounts we’ve worked with. In August of 2022, they had very little sales because of poorly set up PPC campaigns.
Exactly one year later, they were doing over $53,000/mo in sales.
Here are the 8 Amazon ad optimization strategies we used to get there:
1. Target Expansion
One year ago, there were exactly 291 active targets in this account. Today there are 6494.
To understand how big of a difference that is, we have to look at the clicks we drove.
| August 2022 | 840 clicks |
| August 2023 | 24,499 |
With almost 30x the previous visibility, ad sales exploded and organic traffic also blew up.
Here’s how we achieved this:
Using all Match Types and Targeting Types
6494 targets don’t equal 6494 unique targets. 1 keyword used in broad, phrase, and exact are technically 3 different targets.
Is that cheating the system? Not exactly.
Going from targeting a keyword in only 1 match type to targeting it in all 3 can increase clicks and impressions by 30-80%, so the first step in target expansion is duplicating all keywords in all match types.
Next, make sure you’re using all targeting types.
Before we got involved, this seller was only using keyword targeting for his campaigns.
After we started working on the account, we introduced ASIN targeting, auto-targeting, and category targeting which increased the total number of targets in the account by 876.
Finding and Adding New Keywords
The second way we increased targets was by adding new keywords to the account.
Here are some of the ways we found those keywords:
Keyword Harvesting
Amazon has an incredibly efficient keyword research tool called the auto campaign.
Using AiHello, you can automatically harvest search terms from the auto campaigns you have set up and insert them directly in manual campaigns to increase the number of targets you have.
All you have to do is connect your auto campaigns to the relevant exact, broad, phrase, and ASIN targeting campaigns and determine how many conversions a search term needs to be transferred.
From there, the system will add dozens, or hundreds of new keywords automatically each month.
This alone increased the number of targets we had by 1521.
Reverse ASIN Lookup Tools
A reverse ASIN lookup tool allows you to see what keywords your competitors index for, making it very useful for keyword research.
All you have to do is input a competitor ASIN, we recommend using at least 5, and the tool will show you between 1000 to 10,000 keywords that they’re ranking for.
Of course, not all of these keywords will be relevant, so we recommend adding filters like “only keywords within a certain rank range” or “only keywords that include this phrase” and then manually verifying the accuracy of the remaining keywords.
Top Search Terms Report
Amazon provides a list of the top 2.4 million search terms by volume in brand analytics for sellers to look through.
You can put your keyword in, like “Castor” in the example above, and see all the search terms that are similar to it and use them for your campaigns.
Search Query Performance Report
The search query performance report shows you the top-performing search terms for your ASINs or brand.
This report is particularly useful because it gives you specific data about your performance on each search term. You can quickly see which search terms you’re doing better or worse than average on and decide what to use accordingly.
2. Accurate Bidding
Another thing that we improved on the account was its bidding.
Previously, the account owner was too busy to make regular bid changes or choose good Amazon bidding strategies.
This caused many poor-performing keywords to continue spending a lot of money and left many good keywords with much lower bids than they needed.
The way we solved this was to implement a regular bidding system that would handle this for them. You can do this either manually or automatically.
Manual Bidding
Manual bidding, as the name suggests, is the process of increasing or decreasing your bids manually on either the ad console or bulk sheets.
There are multiple ways of doing this but the most common strategies are RPC (revenue per click) and rule-based bidding.
To do either effectively, you need to have an ACoS target in mind, we usually suggest either using your current ACoS as your target if you’re trying to grow sales, or targeting 5% under what you’re currently getting if you’re trying to decrease ad costs.
Once you have an ACoS target in mind, you can implement one of these two strategies:
RPC Bidding: This is where you multiply your ACoS target with your RPC to find out what your ideal CPC would be.
For example, let’s say your target is 30% ACoS and you earn $5/click on a keyword. You should be getting a $1.5 CPC to hit your target (0.3 * 5.0).
Rule-Based Bidding: This is where you set certain rules for your bids. For example, if ACoS is above X amount, decrease bids by Y amount, and so on.
This is more difficult to master, especially for beginner sellers, but can be worth it if RPC bidding doesn’t work for you.
Automated Bidding
With automated bidding, you’re still adjusting bids to hit a predetermined ACoS target. The only difference is that it doesn’t involve you making changes or coming up with your own bidding rules.
The main idea behind automated bidding is that the seller inputs their ACoS target and the algorithm adjusts bids every day to get them there.
Behind the scenes, the AI develops its own set of rules for each account based on historical data. This makes it more accurate than RPC bidding and more straightforward than rule-based bidding.
This is what it looks like inside AiHello. The bid changes above were for a poor-performing keyword and you can see the logic the software used to make these changes at the bottom.
3. Ad Type Expansion
As a general rule, you should aim to have only 85-90% of your ad spend on sponsored products, anything above that signals that you haven’t used the other ad types sufficiently.
When we first started working on the account, exactly $0 per month went into sponsored brands or sponsored display.
Today, we have around 10-11% in sponsored brand ads and another 3% in sponsored display.
Here’s a quick guide on how to use both:
Sponsored Brands
The beauty of sponsored brands is that you can reuse the keyword and ASIN targets that are working in SP and get increased visibility on them.
To implement this, start by downloading your search term report and filter for any term that has produced at least 1 order.
Then, sort the targets by ASIN, and create at least 7 sponsored brand ads for each ASIN you have. 3 for regular SB (one in each match type), 3 for SB video (also one in each match type), and one for a product targeting campaign.
From there, just watch the performance and adjust your bids accordingly.
You may also have to add negative keywords because SB tends to show up for broad search terms.
Sponsored Display
Sponsored display usually represents only 0-4% of ad spend for Amazon sellers, and around ⅔ of sellers don’t use it.
It’s generally not that big of a deal if you don’t utilize it, but it can be useful for remarketing to shoppers who have interacted with your listings before.
As you can see in the screenshot above, you have two options for remarketing – view remarketing and purchase remarketing.
View remarketing can be useful for capturing shoppers who visited your product listings but didn’t buy and then try to convert them into customers.
Purchase remarketing can be used to target existing customers to either upsell them, cross-sell them, or get repeat orders for products you’ve already sold them.
You can select your look-back window for remarketing and it can generally be 7-90 days, with 30 days being the standard.
4. Gold Panning Campaigns
A gold panning campaign is an ad strategy where you put a large number of loosely relevant keywords in a broad match campaign and keep them all at very low bids.
The main idea behind it is that you’re casting a very wide net for visibility. So even if the search terms you get for it aren’t super relevant, and you don’t show up that often because of your low bids, you’ll still get enough traffic to make some sales – and oftentimes, it will happen at a very low ACoS.
The only downside is that it’s very hard to gain significant volume using gold panning.
In the screenshot above, you can see that we only did about $35,000 in sales between January and September.
It happened at a 14.42% ACoS though, which means that at the 30% gross margin we had, we technically netted $4750 in profit from this strategy.
5. Catch-All Campaigns
The catch-all campaign strategy is similar to gold panning. Only this time, instead of stuffing broad match keywords in a manual campaign, you’re stuffing all of your ASINs in an auto campaign with low bids.
Catch-all campaigns tend to have an even lower ACoS than gold panning (usually less than 10%) but it’s more difficult to get a decent sales volume with them.
6. Ranking Campaigns
While having an ACoS target for every campaign is good, it can hold you back sometimes.
Sustaining a low ACoS generally means foregoing a high sales volume. And when you decrease your sales volume on a keyword it becomes more difficult to rank for it.
This means having a high ACoS on certain keywords can lower your TACoS overall by bringing in more organic traffic.
Which is why ranking campaigns exist.
Ranking campaigns are essentially single-keyword, exact-match sponsored product campaigns with higher-than-average bids.
Their main objective is to drive a high amount of traffic to exact search terms that are either already important to you organically, have a conversion advantage, or are almost ranked top 10, but not quite there yet.
This excess ad traffic usually results in a larger sales volume, which signals to Amazon that you’re highly relevant for this keyword and allows you to rank higher.
Pro tip: the best way to check if your rank campaigns are working is to see if your organic sessions are increasing for the ASINs you’re advertising over 3 months.
7. Brand Defense
According to Amazon, up to 30% of customers searching for a specific brand end up buying from a competitor instead.
And even if someone makes it to your product detail page, they might be won over by a competing sponsored product ad at the bottom of your listing.
In short, everyone is out to get your customers. Which is why it’s important to run brand defense ads.
Keyword Brand Defense Ads
Keyword brand defense is essentially targeting your brand name to prevent any of your competitors from showing up for it.
Here’s an example of when it’s done well. You can see that pretty much all of the top spots are secured by the brand itself.
Here’s an example of it not being done well. The two top positions are taken by competing brands and a video placement that’s right below these two rows has been taken by a competitor.
ASIN Brand Defense Ads
ASIN brand defense is simply setting up sponsored product ASIN targeting campaigns and putting your ASINs as the targets.
This is another example of the same brand doing a good job at it, you can see that none of the sponsored product placements is occupied by a competitor.
And this is an example of a brand doing a bad job at it. None of the ASINs shown are sold by the brand itself.
Running brand defense ads can increase your sales without costing you a lot of money.
The CPC you get on them will often be lower, and your conversion rate will be higher, making them cost-effective.
8. Asymmetric ASINs
Asymmetric ASINs are the first thing we look for in any account.
If you’re wondering what they are, they’re high-revenue ASINs that contribute a larger % of total sales than total spend.
This means two things:
1. They have a much higher ad efficiency, so they produce more revenue per dollar invested than normal.
2. If there’s enough search volume, and the margin is good, I can a significant portion of my ad spend into them.
In the case of this account, 70% of our ad budget goes into only 2 SKUs (their account has 50 SKUs) because the ad efficiency on those 2 is higher than average.
These SKUs’ sales have grown more than 4x over the past year which helped lift the entire account.
Wrapping Up
These are the 8 strategies we used to 15x both sales and spend for over a year without increasing ACoS.
If you still feel a bit lost with Amazon PPC optimization and you’re not sure what the best way to increase your sales is, book a free 20-minute consultation with me. I’ll help you figure out what to do next.
