Basics

Account Structure

Your Sponsored Products account has the following components

  • Campaign: The top level organization within Sponsored Products.
  • Ad group: Each campaign has one or more ad groups. These help you organize your ads within each campaign.
  • Ad: This is simply the SKU that you will be advertising. Each ad group must have one or more ads.
Account Structure

There are many ways to set up your ads, depending on your goals and willingness to do hours of detailed monitoring and updates. Find our recommended method in Chapter 3.

First let’s look at the two types of campaigns.

Two Types of Campaigns

There are two types of campaigns: auto and manual.

  1. Auto campaigns are easy to set up and run but hard to optimize because you don’t have much control. Amazon automatically guesses which keywords are best.
  2. Manual campaigns give you complete control, so they take more effort to set up and optimize but are where the majority of your profits will come from over the long run.

Let’s look at each in depth.

Auto Campaigns

In an auto campaign you have only four inputs that impact how the campaign runs:

  • Daily budget
  • Start & end dates
  • Products advertized
  • Default bid

Note that you do not define the keywords here - Amazon picks them. Once you start an auto campaign, Amazon will guess which keywords are relevant to the products in the campaign. When someone searches using one of those keywords, your ad will enter the ad auction with the bid you specified and if you win Amazon will show your ad.

Manual Campaigns

With manual campaigns you get to pick the keywords and must set the match type and bid for each keyword. This gives you extremely precise control over the campaign.

Ad Groups

Ad groups are one step lower than campaigns. Ad groups should always have ads that are related to each other. There are a few ways to use ad groups to organize your account and we’ll cover that in Chapter 3.

Each campaign must have at least one ad group. The campaign can also have many ad groups - it’s your choice regarding how you structure your account. Doing so can help keep everything organized within a campaign. For example, if you sell men’s shoes, you might set up a men’s dress shoe campaign and an ad group for each model of dress shoes.

Ads - The Basic Unit

Your ad will show your listing’s main picture, title, star rating, review count, and price.

Ads in Sponsored Products are simple, especially compared to Google Adwords or Facebook Ads where you can control the text or the photo in your advertisement. In Amazon, you simply pick the SKU in your account for which you want to advertise.

This simplicity is beneficial to you as a seller because your ad looks very much like any other search result.

Match Types

Match type describes the relationship between your keyword and the customer’s search term. It is how you tell Amazon how closely related the search terms needs to be to your keywords in order for the ad to be shown.

Keyword vs. Search Term

Before we dive into match types, it is important to know the difference between keywords and search terms.

  • The keyword is what you bid on.
  • The search term is what the customer actually searched on, i.e. what they typed into Amazon’s search box. It’s what they were looking for when they clicked your ad.

If a customer’s typed search term triggers a keyword you’re bidding on, then your ad will be entered into the auction. If it wins, your ad will be shown. You only pay if the customer clicks your ad.

Broad, Phrase, and Exact Match Types

There are three match types: Broad, Phrase, and Exact. When you set up a manual campaign you need to select the match type for each keyword to be either broad, phrase, or exact. Let’s look at what kind of search terms each keyword would match.

Example

Keyword Ad Shown Match Type
  Broad Phrase Exact
poster frame 24x36 inch poster frame poster frame oak poster picture frame poster frame 24x36 poster frame poster frame poster frames
picture frame wooden frame frame for poster frame poster 24x36 poster frame wooden poster frame

Negative Match

There’s a special match type that gives you that last little bit of control over which search terms trigger keywords in a campaign. Adding negative keywords tells Amazon that you do not want to bid on those search terms even if they would trigger one of your keywords.

Negative keywords come in two flavors: exact and phrase. These match types work the same way as the regular match types.

Example: Say you sell 20’x30”’ poster frames. Negative keywords are helpful for avoiding showing your ad to people looking for a different size frame. You set up a broad match keyword for “poster frame” and a negative phrase keyword for “24x36”. In this case, you will never bid in the auction when a customer searches for “24x36 inch poster frame”, even though normally it would have triggered the broad match keyword.

Bidding

Each keyword in each ad group has a maximum bid amount. If you want to set a maximum bid per keyword, you can do that in a manual campaign. Otherwise, the maximum bid automatically inherits the default bid for that campaign.

Normal bids range from $0.20 for noncompetitive keywords to $2 for medium competitiveness to as high as $6 for extremely competitive keywords.

Let’s go with our poster frame example above. The auction would go like this:

  1. A customer searches on “wooden poster frame”
  2. Anyone who bid on a keyword that can be triggered by “wooden poster frame” would be entered into the auction.
  3. Amazon checks each product for eligibility. If a product doesn’t have the buy box or the product isn’t relevant to the search term Amazon will remove you from the auction.
  4. The remaining ads are ranked and given the sponsored positions on the page in rank order.

The order of the displayed ads is based on two factors: your bid and the likelihood that the ad will be clicked. Amazon wants happy customers and sales. Amazon looks at how that ad has done for that keyword in the past so the better your ad performs over time, the better you’ll do in the auction.

Budgets

Daily budgets can be set at the account level and the campaign level. The account level is optional and will turn off all ads for the rest of the day after you have spent that amount. If you leave it blank, Amazon will just use your campaign level budgets.

Campaign budgets are required for each campaign and are a little more complicated. Even though it just says “Daily budget”, it is better to think of it as “Average daily budget.” Let’s say you set a daily budget of $10 for a campaign. Amazon won’t spend more than $310 on that campaign over the course of the whole 31 day month, but it might spend more than $10 on an individual day. In practice, it’s rarely much more than $10, but don’t worry if your report says you spent $11 or $12. It will all average out at the end of the month.

Tip

Never increase a campaign’s budget beyond the amount you’re willing to spend that month. If you’re experimenting with high budgets consider setting an account level budget as a safeguard.

Plurals

Amazon treats the plural and singular form of a keyword the same. The search term “spatula” will trigger “spatula” and “spatulas” even for exact match types. If you add a negative exact keyword for “spatula”, then none of your keywords will trigger on the search terms “spatula” or “spatulas”.

What Makes a Successful Campaign?

The #1 Most Important Thing for Successful Sponsored Product Campaigns

Want to take a guess? Bid amount? Keywords?

It’s actually your listing! By far the most important part of running a PPC ad campaign is making sure that your listing has a high conversion rate. If only 1% of the people who land on your page end up buying your product, it’s going to be very hard to run a profitable PPC campaign. You’ll be paying for too many clicks that do not result in a sale.

Optimizing a listing is beyond the scope of this guide, but a quick Google search will bring up the latest listing optimization best practices. Be sure to stay up to date, because just as the methods to get the most out of PPC change over time, so do the best ways to optimize your listing.

Reviews

An optimized listing is critical to make sure clicks convert into orders, but to get the click in the first place most listings benefit greatly from a few reviews.

Running ads on a product without any reviews is an important way to get those first few reviews, but many customers won’t investigate a product without a few reviews. For this reason, you should know that a low click-through rate and lower conversion is normal until the listing gets its first few positive reviews.

The number of reviews required to be compelling varies with the product and the industry.

Tip

Don't give up if ACoS is high for a brand new product for a week or two. It will improve over time with more reviews and listing optimization

Keywords

You can’t have a successful campaign without targeting the right keywords. Bidding on the right keywords determines how much exposure your ad will get, so it is important to find the right ones for each ad group.

Bid Amount

Even the right keyword won’t show if the bid is too low. Too high of a bid and you will spend more money than you make. We’ll figure out how to zero in on the perfect bid in Chapter 4.

Time

Amazon gives preference to ads in campaigns that have a long history of high performance. Have patience and stick with it.