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A Guide to Amazon PPC Spending For 2022

Despite popular belief, running profitable PPC campaigns isn’t just about creating innovative campaigns. Setting and adhering to a budget is also important.

Advertising budgets outline all the money a brand intends to spend on Amazon marketing campaigns (mainly sponsored ads). Small brand owners and new sellers need to determine a budget beforehand because they do not have experience drawing marketing budgets.

Even though we cannot pinpoint a magic number that works for all brands, we will answer the most common questions which will help every brand determine how much to spend on advertising.

Does Amazon PPC make sense?

The short answer is yes.

The majority of your sales will come from PPC if you are relatively new and don’t rank #1 for the top keywords. You can get your products in front of shoppers right when they are searching for your products with Amazon Sponsored Ads.

When PPC campaigns are effective, sales increase, reviews increase, and organic positioning are improved. While you shouldn’t entirely rely on PPC for sales, you should use it to get a head start on sales and retain market share in the early stages.

To stay competitive, even name brands with thousands of reviews and organic positioning on page one advertise aggressively.

What is the best amount to spend on Amazon PPC?

What is the right amount to spend on Amazon PPC? This is a question that every Amazon seller wonders about.

Brands should not spend the same amount on paid advertising for all brands. Brands need to determine how much they are willing to spend on PPC based on their unique goals.

If you don’t know where to start, commit to reinvesting a certain percentage of your revenue into advertising, and you’ll have the money to spend on Amazon PPC.

Advertising budgets should be around 10% of your total revenue. You can use this percentage if you’re just getting started or want to maintain your current position. Consider investing 15% of your total revenue in PPC if you want market dominance and to capture competitors’ sales.

A niche’s temperature is also important to consider. If you want to gain more visibility and recognition, you may need to increase your PPC budget in uber-competitive categories.

70-20-10 is the rule of thumb

10% of the Amazon PPC budget should go towards strategies that are known to work, 20% of the budget should go towards experimenting with new strategies that are designed for growth, and 10% should be used for experimenting with targeting opportunities, and new placements.

Can I advertise all the products in my catalog?

Unfortunately, no. Adopt an aggressive advertising strategy for the top 20% of your revenue-generating products.

What should I spend on each type of ad?

Most brands use the same PPC strategy: Create automatic sponsored product campaigns that uncover useful search terms and gradually shift to manual campaigns to increase sales. To target customers visiting competitor’s detail pages, sprinkle Sponsored Brands and Sponsored Display.

Is there a way to allocate budgets for each type of ad? When it comes to budget allocation, three types of ads (Sponsored Products, Sponsored Brands, and Sponsored Display) are not equally valued.

It can be difficult to maintain a profitable ACOS when you invest a lot in Sponsored Brands and Sponsored Displays. Despite both ads’ advantages, Sponsored Products are more profitable.

This is how most profitable PPC campaign structures spend their ad budgets

Our recommendation is to spend 70% of your ad budget on Sponsored Products, 20% on Sponsored Brands, and 10% on Sponsored Displays.

Your advertising goal will determine these percentages. The budget should be allocated to Sponsored Products if you wish to increase sales, or to Sponsored Brands and Sponsored Displays if you wish to increase visibility and raise brand awareness.

How do you determine if an ACOS is good?

In well-optimized PPC campaigns that have been running for more than two months, an ACOS of 25% is considered acceptable.

You should not rely solely on ACOS to determine the profitability of your PPC campaigns.

Despite its importance in measuring your campaign’s success, ACOS does not give you the full picture. PPC also increases brand awareness and organic ranking in addition to generating direct sales by luring more customers to detail pages.

By including TACOS into the metrics mix, one can determine the profitability of a PPC campaign. With TACOS, you can see how effective advertising is long-term and how much your business relies on it.

TACOS can be interpreted as follows:

The use of paid advertising is inevitable, but it should not be relied upon exclusively for sales. To increase organic sales and brand awareness, your advertising should have a snowball effect.

What are the best methods for optimizing PPC campaigns so that they are profitable?

Brands can optimize their PPC campaigns on Amazon with its sophisticated reporting system and easy-to-navigate dashboard.

Practices to follow:

• Find campaigns with budgets that have already been exhausted or are about to be exhausted by using the “Almost or out of the budget filter.”.
• The regular optimization tasks include optimizing bid amounts, determining profitability at the product level, and adding converting search terms and negative keywords.
• During high-traffic months, you should increase your budget if you sell seasonal products. Market share can be negatively affected if you stop advertising in off-months.
• Promote your newly launched products alongside established products to boost new product launches. This can be accomplished through Sponsored Brands and Sponsored Display ads.
• Your listing should be informative and appealing before any paid traffic is brought to it. Boost conversions by optimizing your copy and images and leveraging Enhanced Brand Content.

Conclusions

To create profitable paid advertising campaigns, a cap must be placed on PPC expenditures.

The Amazon marketplace is becoming increasingly pay-to-play, and CPCs are higher than ever thanks to COVID. Additionally, Amazon has rolled out so many advertising updates that encourage brands to utilize Amazon ads. With Sponsored Products, advertisers can now feature custom headlines and logos, while Sponsored Brands can now promote their products via Twitch.

You must set a budget to ensure advertising success during increasing competition and CPCs. Advertising budgets should be flexible enough to meet your business’s changing needs. Keep these guidelines in mind when you finalize your Amazon PPC budget next time. Your Amazon marketing consultant can help you decide, but ultimately it’s up to you how much you spend on Amazon PPC.

You can drive organic traffic to your detail page, increase sales, and build brand recall with plenty of free opportunities, including Amazon listing optimization, A+ Content, Stores, Posts, and Amazon Live. Visit Amazon Creative Tools to Increase Brand Recall for the full list.

Are you having trouble determining your PPC budget? You can reduce wasted spend with the help of our team of Amazon Ads Specialists. Don’t hesitate to contact us!

Selling Tips for Amazon Q4 to Capitalize on the Holiday Shopping Spree

Holiday shopping frenzy and the widely-celebrated holidays are just around the corner. It’s time to prepare your channel and store for the busiest, most hectic, and most unpredictable time of the year. Most brands fail to capitalize on the impressive increase in traffic during the last three months of the year without a proper strategy. Brands can maximize their sales during the holidays with our Amazon experts’ actionable tips. We’ve covered every aspect of preparing your Amazon store right from inventory management to high-level strategic recommendations to reach and crush your Q4 sales target.

Amazon Q4 2022 sales dates

• 31st October is Halloween
• The 24th of November is Thanksgiving
• November 25th – Black Friday
• The 28th of November is Cyber Monday
• December 18-26 is Hanukkah
• 25th December is Christmas
• Christmas Day – 26th December
• Kwanzaa – 26th December – 1st January

Managing inventory

In this year’s inventory management challenge, Amazon has left no stone unturned. One of the biggest headaches is Amazon’s announcement of higher storage fees to offset rising costs. After hiking fees in January, the retail giant announced a 5% fuel and inflation surcharge in April.

On average, their fulfillment services remain 70% less expensive than comparable two-day shipping alternatives despite the constant increase in storage fees. In the event of a need, sellers must be prepared to switch to FBA.

Your marketing strategy might need to be adjusted based on your current inventory. Whenever you are about to run OOS, you should be more conservative with your advertising campaigns.

Assess sales lift during holidays by comparing year-over-year data. As you send in holiday stock, prioritize ASINs that are fast-moving.

Protection of brands

During the holiday season, counterfeit third-party sellers and bad actors are likely to emerge to make a quick buck. To prevent unauthorized sellers from siphoning your traffic and sales, you must maintain constant vigilance.

You can fend off counterfeits by adding brand terms to your listing, using software that monitors infringement, registering your brand with Amazon, signing up for programs like Project Zero, and adding branded elements such as A+ Content to your listing.

Optimizing the listing

Don’t make any major changes to your listing if it is already optimized with informative content, high-quality images, and A+ content.

In your listing content and backend, include holiday-related and seasonal keywords, like “stocking stuffers” and “holiday gifts”, as well as dressing up your images. Adding an image to your product that highlights it as the perfect gift can be as simple as that. In the absence of keyword research Use tools like Helium10 or MerchantWords to uncover seasonal keywords relevant to your products using Amazon’s Brand Analytics tool.

Ensure that you read customer reviews and questions and answers sections to address common concerns that create returns and lower your valuable ratings.

Universal Commercee can assist you with Amazon SEO optimization, even though it takes time and effort.

The creative

During their holiday shopping spread, buyers view dozens of products every day. To get an edge on your competitors and add an extra layer of customer confidence, include visual elements to your detail page and create a fully branded experience for shoppers.

• A+ Content: With Amazon A + Content, brand registered sellers can upgrade their existing text descriptions with professional-looking, image-based reports. You may also be eligible for Premium A+ Content if you have published more than 12 A+ Contents this year.
• Store Versions: This feature allows brands to create a temporary Amazon Store version for each day of the week. In the unique version created, products can be highlighted with discounts and promotions, or holiday-themed creative can be used.
• Amazon Brand Story: Located above the A+ Content section, the brand story highlights the brand’s unique value proposition. Your storefront or product detail pages can be reached by scrolling through a scrollable carousel.
• Amazon Posts: Amazon Posts are social media-style posts with lifestyle pictures and catchy captions that help brands attract customers. On a product’s detail page, similar products’ details pages, and on a storefront on a separate page, posts appear. You can view the detail page of the product advertised in a post by clicking on Posts.
• Amazon Live: Brands can engage with browsing shoppers in real-time on high-traffic days like Black Friday and Cyber Monday. A discount code can be offered or common questions about the featured products can be answered.
• Your conversion rate can be increased by 58% when you add a video to your listing. Videos are more appealing to shoppers than dry blocks of text when it comes to learning about your products. The best way to highlight your products’ unique features is to create a professional video.

You should start these creative changes to your store as soon as possible since they can be time-consuming. To create professional designs, consider hiring optimization services.

The advertising industry

• Don’t focus on anything but winning ASINs. The time is not right for experimentation. Make sure you prioritize your top sellers, especially those who have done well over the past few years.
• Take advantage of the big holidays by running your PPC campaigns a week early.
• Make your Sponsored Brands and Display campaigns festive with holiday-themed images and copy. Utilize Sponsored Brands’ custom image feature and the new headline suggestions for Sponsored Display campaigns.
• During peak retail holidays like Thanksgiving, Black Friday, Cyber Monday, Halloween, Christmas, Jewish Holidays, and Boxing Day, you can earn more by spending more. Your top-performing keywords may not be getting the placement you want unless you are aggressive with your bids. Keeping visible is key, but increasing spending without a strategy can blow your ACOS targets and hurt your bottom line. To remain competitive while remaining profitable, we recommend increasing bids by 60-70%.
• Gift-giving campaigns that feature unique holiday-themed products and relevant keywords.
• To cross-sell your product catalog, use Sponsored Products and Sponsored Display product targeting. Your product detail pages should be expensive, less optimized, and poorly rated in comparison to your products. To increase customers’ overall order value, brands can also advertise complementary products or “frequently bought together” products. Additionally, this will protect ad placements that would otherwise be assigned to competitors.
• Leverage promotions and coupons to encourage ad-driven traffic to convert to customers.

Troubleshooting and risk management

Prepare a contingency plan if any issues arise and keep an eye out for common roadblocks.

• Your listing may get deactivated or suppressed due to a faulty main image or a restricted keyword, so make sure all listings are live and available.
• If you don’t make payments or your campaigns go over budget, your PPC campaigns will fail. Therefore, it is imperative to monitor your campaigns every day, especially during big events.
• Make sure you have a plan in place in case your products run out of stock.

Returns post-holiday

Following a busy holiday selling season, almost every brand on Amazon experiences a wave of returns and refunds. Even though you can’t stop the influx of returns and refunds, you can learn from them and try to avoid them in the future. You may want to create an image explaining how to buy the right size if the product did not fit the customer as expected.

How can I manage my Amazon account for Q4?

Although the fourth quarter is just around the corner, it’s never too late to start planning your holiday sales strategy. Universal Commercee’s Amazon seller consultants can help if you don’t have a plan yet. In Q4, things happen fast, and if outsourcing everyday Amazon tasks and Q4 preparation to an agency can save you time, then it’s worth it.

External Traffic for Amazon Listings

Amazon has fierce competition. As a result of the pandemic, CPCs (Cost-Per-Click) have skyrocketed. With organic marketing tactics, it is almost impossible to stand out, and paid advertising is more costly. 

It is possible for brands to boost their growth in a competitive market by combining internal paid and organic traffic driving efforts with external traffic driving activities. 

Here are some reasons why you should drive external traffic to your listing

#1: Amazon wants it

It’s not surprising that Amazon wants sellers to drive traffic from other sources. Amazon is giving even more reasons to increase your external traffic in 2021 with the launch of the new Brand Referral Program. In this program, brands can earn a 10% bonus on qualifying sales. To earn a bonus, you must track sales that come from off-Amazon sources with Amazon Attribution tags.

Brand Referral Bonus – Monetize Off-Amazon Marketing Efforts

#2 Expand your customer base outside of Amazon

About 74% of US customers begin their product searches on Amazon, according to JungleScout. It’s important to note, however, that about 26% of searches still occur outside of Amazon. 

You can influence the 74% of Amazon shoppers by using internal paid and organic optimization techniques, but off-Amazon marketing can help you reach a big chunk of potential customers. 

#3: You can close a sale before the noise starts

You can increase sales potential and brand presence on Amazon by optimizing your listing for visibility and conversion, creating A+ content, building a store, and running paid advertising campaigns. However, almost every seller on Amazon does it as well. 

You need to be able to see your product on its own for it to be memorable. You can influence the shopper before your competitors steal your thunder by driving off Amazon traffic. 

#4: You can market your product in your way

Amazon restricts everything – how you describe your product, how you photograph your product, and how you present your product. The use of common words like “eco-friendly,” “all-natural,” and “germs” in your listing can get you into trouble. 

You can be creative when advertising outside of Amazon. Your ads can create a lasting impression on shoppers if you craft an exclusive brand voice. 

#5: You can create your own identity through it

If you make a sale on Amazon, you haven’t gained a customer; Amazon has. You create a more sustainable business model by driving external traffic. 

Rather than relying solely on Amazon for sales, you are taking control of your brand’s success. You can both maximize sales and secure your brand’s future by incorporating off-Amazon strategies into your marketing plan.  

#6: You gain an edge over your competition

There has never been a more challenging time to be found on Amazon. PPC is an extremely effective way to drive qualified traffic to your listings, but your products may sometimes need an extra push to be successful. Off-Amazon traffic can give you the edge you need to gain traction and rank organically. 

How much does it cost to drive external traffic?

When you’re just getting started, running off-Amazon campaigns isn’t exactly cheap since most non-Amazon traffic sources are paid. Driving external traffic involves running paid ad campaigns, creating creatives that compel distracted shoppers on social media and Google SERPs to stop scrolling and visit your detail page, and offering a discount to entice shoppers to make a purchase. 

Costs incurred in external traffic generation campaigns can eat up your profit without ensuring sales.

Brands should invest in external traffic generation activities and run campaigns for Amazon products that are already thriving. Obtain qualified external shoppers who are more likely to convert to maximize profitability. To do this, brands need to choose the right channel based on their target audience.

One good strategy, if you’re too skeptical about trying out new channels, is to try one at a time. Start a few campaigns with a specific goal in mind (increasing sales, building brand awareness, collecting emails, etc.). Test the campaigns for at least 10 days. Double down on the channel if the campaign was successful. Try another if that doesn’t work. 

The best ways to drive external traffic to your listing

External traffic can be driven by any platform other than Amazon. You might be tempted to include all of them in your off-Amazon marketing strategy, but we’ll focus on proven sources. 

#1: Take advantage of sponsored displays

You can target customers off Amazon on sites like Twitch with Sponsored Display, which was launched in 2019. Advertisers can target shoppers who have already seen the listing or shown interest in the category to make these ads stand out. 

About 25% of Amazon sellers are already using Sponsored Display. In addition to having no minimum bidding or daily budget restrictions, Sponsored Display ads are perfect for brands with a tight budget. 

#2: Establish a strong social media presence

Social media has evolved over the years. It’s not just a place to communicate and share. Amazon has been using it to drive brand awareness and sales. 

To reach a wider audience on Amazon, almost every successful brand uses social media channels like Facebook, Instagram, TikTok, and Pinterest. 

Brands choose popular social media channels to drive external traffic

• With Facebook ads, you can target specific groups of people based on their interests, activities, and location. Facebook is the best platform for video ads.
• Using clever visuals and short reels, Instagram is ideal for creative marketing through its image-based nature. 
• YouTube videos appear in Google searches, making them highly visible. YouTube helps shoppers create a lasting impression with influencer-sponsored content, reviews, and unboxing videos. Keep in mind that 73% of shoppers watch a video before purchasing if this isn’t enough to convince you. 
• With over 800 million users, TikTok is the fastest-growing social media platform and the most downloaded app on Google Play and the App Store. People binge on TikTok videos that look like their friends made them. Influencers can be hired or brands can film themselves. 
• Create a Pinterest profile that reflects your brand. Create boards once your profile is up and running. Don’t go overboard with your product promotion; instead, be creative with the images and copy you upload. You should link each image to your Amazon listing and add your brand logo to your creative so shoppers know who you are. 

Social media advertising best practices

• Determine who your target audience is. Young girls and women, in general, are your target audience if you sell beauty products. 
• Make sure your video ads are succinct. The video should not last longer than 20 seconds (except on YouTube). 
• Each ad should link to your Amazon storefront and product detail page.
• Make your ads more impactful by working with influencers.
• To target relevant audiences, use hashtags such as #AmazonFinds #OnlineShopping #AmazonHacks.

#3: Engage influencers

Influencers are more trusted than traditional forms of advertising. With no signs of slowing down, what was a $1.7 billion industry in 2016 has grown to $13.8 billion in 2021. 66% of consumers aged 18-29 trust an influencer over a traditional commercial, according to Bobsled. The ROI from influencer marketing is comparable to or better than that from other marketing channels, according to 89% of marketers.

Influencer marketing campaigns can drive raving sales when done correctly. The campaign is sure to succeed since influencers have followers who trust their word and shoppers are arriving at a dependable website like Amazon. 

#4: Create an email list

An easy way to build an email list is to include a packaging insert that asks customers for their email addresses and offers them an incentive – a gift, a discount code, etc. If you include any information regarding reviews in the insert, Amazon might suspend your listings or take away your selling rights. 

Using an email list, brands can announce new product launches, offer exclusive discounts, cross-sell or up-sell, and educate customers about their products. 

#5: Use Google Ad words to advertise

While most product searches begin on Amazon, most searches begin on Google. About 25% of Amazon sellers use Google Ads to promote their products. Similar to Sponsored Ads, Google Ads text and keyword-based ads are easy to set up and likely to provide a positive return on investment. Plan and build Google Ads campaigns with your ecommerce SEO consultant to divert qualified traffic to your listings. 

#6: Engage affiliate bloggers

Several niche sites are run by Amazon Associates Program bloggers. They can write about your product and include an affiliate link to your detail page. When a visitor clicks on the link and buys the product, bloggers earn a commission and brands can get external traffic diverted to their listings. 

You can find affiliate bloggers by running a quick Google search related to your product/niche. Search for “best foot insoles” on Google and you’ll find blogs and articles comparing various products if you sell “foot insoles.” Ask the blogger to include your product. 

#7: Use the deals website to reach ready-to-buy audiences

Shoppers can give reviews and discuss new products on websites like DealNews and Slickdeals. Advertise on these websites to target ready-to-buy audiences and increase off-Amazon traffic on your listing. Since you are advertising in front of shoppers with purchase intent, your ads are more likely to convert. 

How NOT to drive external traffic to your listing?

#1: Follow the rules

Amazon’s guidelines and terms of service must be followed at all costs. The general idea behind Amazon’s guidelines is to avoid driving traffic away from the site or seeking ways to artificially obtain positive reviews. 

#2: Don’t direct traffic to your listings

It is also important to note that external traffic should never be routed directly to a product listing. Amazon shoppers have purchase intent, but the external traffic you are bringing might not. Amazon has an average conversion rate of 9.87%. As a comparison, the average conversion rate for landing pages is just 2.35 percent.

Your organic rank is heavily influenced by your sales velocity and conversion rates. The increase in listing bounce rate caused by external traffic can negatively affect your ranking. 

Instead, create a landing page that filters shoppers before redirecting them to your listing. The goal of a landing page is not only to weed out low-interest visitors but also to build an email list of shoppers who are indeed interested in your product.

#3: Make sure your Amazon listings are optimized

Before directing any traffic to your detail page, you must thoroughly optimize the listing. You might as well not bring any traffic to your listing if your photos aren’t high quality if your copy doesn’t provide all the information a customer needs to buy if your Product Description doesn’t have A+ content. 

Make sure your listing has these features before driving any external traffic to it – or any traffic for that matter:

• There are nine high-quality images, including an Amazon-compliant hero image, infographic images, and images of the product in use
• An informative copy with five bullets and a description
• A+ Content (Enhanced Brand Content) on Amazon
• A minimum of 20 reviews with a rating of at least 4 stars
• Eligibility for buying boxes
• The availability of stock

Hiring an Amazon creative agency is the best way to optimize your listing thoroughly.

#4: Avoid advertising newly launched products

Off-Amazon shoppers do not have a purchase intent. Probably scrolling through the feed and catching up with friends, not necessarily intending to purchase anything.                                                        

Advertise products that are already successful on Amazon or that have the best seller badge to attract shoppers.

Off Amazon, you’ll find a world of opportunities

Amazon’s traffic alone can leave a huge chunk of potential shoppers untapped. Expand your reach with off-Amazon marketing efforts, regardless of whether you’re trying to thrive in a highly competitive category, building demand for a new product, or your Amazon sales are great.

Off-Amazon marketing campaigns have a certain degree of risk, but having a proper strategy is key to success. 

Partner with Universal Commercee if you’re pressed for time to create a strategy, find the right channel, and optimize campaigns for Amazon.