In part 2 of this article we explain how to setup your campaign following part 1: our recommended PPC campaign structure. Our recommended approach will also enable Amazon vendors, who may only have very limited time to spend on campaign optimization, to achieve successful results with Amazon PPC.
Following our recommended approach, for each product (ASIN) you will create a manual campaign and an automatic campaign.
We recommend sellers to set up their Manual campaign first (using the Exact & Broad match types), followed immediately by their Automatic campaign. The entire process should take about 20-30 minutes.
1. Create your manual campaign (goal: generate profit)
For your manual campaign you will create two Ad Groups; Broad and Exact. In order to help sellers simplify the campaign setup process, our recommendation is to skip Phrase Ad Groups altogether.
1.1 Set up your Exact Ad Group
The keywords in your Exact Ad Group are the most relevant keywords for your product, and as a seller you will already know of a few keywords that you will want to bid on immediately. Therefore, we recommend sellers to set up their Exact Ad Group first.
The challenge here is finding an effective way to quickly scale this list, and avoid the risk of bidding on irrelevant keywords in your Exact Ad Group.
- Step 1: Use Sonar (free Amazon keyword tool) to pick the top 20-50 keywords for your Exact Ad Group
With Sonar you eliminate the risk of bidding on irrelevant keywords, as the keywords displayed in Sonar are pulled from real search terms used by Amazon customers. Comparatively, if you were relying on Google AdWords for your keyword research, you risk bidding on keywords that are simply not relevant to the search queries of Amazon customers.
Importantly, with Sonar you also have the ability to sort keywords by search volume, allowing you to prioritize the relevant keywords for your product.
- Step 2: Set the default bid for your keywords
Your optimal default bid is the maximum amount you can afford to spend on an ad to generate one sale. You do not want to be outbid on the keywords in your Exact Ad Group that are converting well for your product.
How do I calculate my default bid?
First, you will need to determine your target ACoS. Relying on the assumption that your organic sales and PPC sales have the same conversion rate, our formula below helps you calculate exactly how much you can afford to spend on PPC in order to generate one sale.
Important note: Your CPC bid (the amount you actually pay for) is not the same as your default bid (the max amount you’ve agreed to pay for).
From our research, we’ve found that the CPC bid is on average 40-50% lower than your default bid. For example, if your actual CPC was $0.25, we would recommend you to add another 50% to your default bid so you end up bidding $0.375 as calculated. Remember, the goal here is to bid aggressively.
1.2 Set up your Broad Ad Group
For the keywords in your Broad Ad Group, Amazon will cast a wide net for new search terms that match your keyword. For example, with the keyword ‘apple slicer’, Amazon will also show you ‘apple corer’, ‘apple peeler’, and ‘potato slicer’. In your Broad Ad Group, you can clearly tell that only some search terms will be relevant for your product.
- Step 1: Add all the keywords from your Exact Ad Group to you Broad Ad Group.
- Step 2: Set Default Bid (we recommend to simply deducting 20-30% from the default bid you calculated for your Exact keywords.)
- Step 3: Add all your Exact keywords to ‘Negative Exact’ in your Broad Ad Group.
Why move all Exact keywords to ‘Negative Exact’ in Broad Ad Group?
It’s important to understand that the purpose of your Broad Ad Group is to let Amazon find all the relevant search terms in addition to your existing Exact keywords for you to bid on.
For example, when you add the Exact keyword ‘apple slicer’ to your Broad Ad Group, Amazon will also show you relevant search terms such as ‘apple corer’, ‘apple peeler’, etc for you to bid on.
However you do not want ‘apple slicer’ to show up again in your Broad Ad Group, since you are already bidding on this keyword in your Exact Ad Group. Thus, you would add ‘apple slicer’ to Negative Exact in your Broad Ad Group.
2. Create your Auto Campaign (goal: find new keywords)
Now that you have set up your Manual Campaign, you will find it a fairly straightforward process to set up your Auto Campaign. You will only need to create one Ad Group for your Auto Campaign.
- Step 1: Set your Default Bid (use Amazon’s suggested bid)
- Step 2: Add the keywords from your Broad Ad Group as ‘Negative Phrase’ to your Auto Campaign.
After you’ve set your default bid in your Auto Campaign, we recommend you to deduct 30-40% from your default bid price after you have your relevant keywords running in your Manual Campaign.
Why lower my default bid in the Auto Campaign?
The expectation is that you will eventually be bidding on all your relevant keywords in your Manual Campaign. Therefore, the main goal of running an Auto Campaign is to:
- Find new search terms which have generated purchase orders that you may want to add to your Broad Ad Group.
- Find long tail keywords: i.e. bid on the keywords with less search traffic and therefore less competition. Because long tail keywords have a lower CPC, this will allow you to lower your default bid and save some money in your Auto Campaign.
Remember, the goal of PPC campaign optimization is to aggressively bid on the keywords you know convert for you in your Exact Ad Group, and find ways to lower your default bid in your Auto Campaign. This will help ensure your ad dollars are optimized for both campaigns.
Go back to review how to structure your PPC campaigns and find the best balance between time investment and campaign precision.
In the final part of this article we will walk you through how to optimize your up and running PPC campaigns for continued efficiency.