Amazon sellers have a good view for 2024, stating that they are profitable and plan to increase and diversify their product line. However, 36% of sellers are concerned that inflation may harm their business since storage and shipping rates fluctuate, as well as the cost of items from suppliers throughout the world.

It's no surprise that a growing number of businesses are raising their ad spend on the retail behemoth, where the cost per click (CPC) for ads is roughly $0.75, cheaper than Facebook's $1.35 and Google's $2.32.

Although corporations continue to focus their advertising dollars on the top two digital ad market leaders, Google (28.8% global share) and Facebook (20.5%), more businesses are increasing their budgets for Amazon's pay-per-click (PPC) ads. Sellers have reportedly cut their Facebook ad expenditure due to the social network's limited targeting options.

Amazon ad pricing might still be high as retailers compete for keywords linked to their products. However, marketers do not appear to mind—private label retailers frequently spend more than 10% of their revenues on advertising, whereas resellers spend 5%. You should take amazon ppc services if you want more sales through your Amazon store.

5 Steps to Optimize Amazon PPC Ads for Increased Sales

Check which of these eight stages you should include in your existing Amazon advertising strategy:

Evaluate your goal advertising cost of sales (ACOS)
Your ACOS is a measure that compares the amount you spend on PPC advertisements to the amount you earn in sales. To calculate this amount, divide your ad spend by your ad revenue and multiply by 100.

You can access your ACOS on your Amazon Seller Central dashboard by selecting the Advertising tab and then Campaign Manager—the ACOS column appears after the Sales column.

The ACOS might range from 15% to 30% for low-converting goods. However, for freshly introduced items that require increased visibility, the target cost is 40% or greater. A higher ACOS may be required if you want to:

1) Dominate a niche.
2) Get rid of a low-selling product.
3) Sell in an extremely competitive market.

But what is an appropriate ACOS for established products? It should not be more than your desired profit. This can be determined by understanding your break-even point, which is the amount you pay for ads that will not result in a loss or profit.

Before that, determine your profit margin, or the amount after subtracting expenses such as production, shipping, staff pay, and other fees. For example, your product has a retail price of $15. Then imagine that your Amazon fees are $2 and your production costs $5. Overall, you are paying $7 before selling the thing. When you subtract $7 from the $15 pricing, you end up with a $8 pre-ad profit. This is the amount you make for each sale. Thus, $8 is also your break-even ACOS because if you spend the entire amount on advertising to sell your product and only need $7 to produce and deliver it to your client, you will make no profit.

Choose an ad-type mix that aligns with your business and campaign goals
Amazon offers three PPC ad kinds that may be combined to create an effective campaign. Each ad type serves a certain function, so test which one works best for your needs and budget.

Sponsored Product ads sell single products to high-intent customers or shoppers who are most inclined to buy. These ads are perfect for launching new products, achieving the top spot on Amazon's search results page (SRP) for specific keywords, and gaining your competitors' consumer base.

Sponsored Brand ads include up to three products from a single company (as "Product Collection," "Store Spotlight," or "Video". This style seeks to increase brand awareness and long-term demand by featuring your logo prominently in these advertising. This ad type is also the only one that supports video. Sponsored Brand advertisements, like Sponsored Product ads, display in SRPs, allowing you to reach your competitors' loyal customers while simultaneously positioning your brand as a viable alternative.

According to Amazon, this ad style increases return on ad spend by 5.5% and conversion rates by more than 57.8%. In comparison to the Product Collection format, the Video format can enhance the click-through rate (CTR) by 100%.

Sponsored Display ads retarget past visitors to your brand's product detail pages on or off Amazon.

Invest your advertising budget on top-performing products
Avoid investing money in products that do not produce revenue. Third-party programs, such as Perpetua's Benchmarker, can assist you find products that receive clicks but do not convert. Audit your ad groups and gradually delete things with a high ACOS. Alternatively, you might drop bids on products with a high ACOS. At the same time, try to identify the possible causes of poor performance (keywords, product description, photos, or others).

Focus on high-performing ASINs
If you run PPC advertising for each variation of the same item, they may fight for ad placement. To avoid this, focus your advertising budget on top-selling products, which are identified by 10-digit alphanumeric Amazon Standard Identification Numbers, or ASINs. A specialized ad campaign can drive more traffic to your Amazon listing page for that item, allowing customers to view other product variants and contemplate additional purchases.

Promote low-performing items on your top-performing product pages
Set the product detail pages of your bestsellers to display advertisements for your other products that aren't selling well. This method will keep your loyal customers moving around your brand's pages.

Adjust your bidding strategy based on a product's page rank
Analyze your product's page ranking and position on the SRP depending on its keywords, and then set your bid based on where it appears in Amazon searches.

First and second pages: Bid higher than your competition to increase your product visibility. Also, change your keyword match type to "Phrase Match" so that your ad appears in variations of your term or phrase.

Second to fifth pages: You can bid less aggressively for the keywords of products that appear on the second through fifth pages. Continue to take note of the essential terms on your product pages that occurred in the first few SRPs so that you may adjust them as needed.

Beyond the fifth page: You can stop bidding on keywords in product pages that appear on Amazon's search result page six or higher, allowing you to invest your funds in higher-performing keywords.

Create a standard naming system for your ad campaigns
If you merely call an ad campaign as "Campaign 1," you may quickly forget what it is for. Be more precise so that you can identify the product(s) and the campaign's objective.

A sample structure might look like this: Product identifier, campaign name, target ACOS, and extra identifier.

Your "campaign name" can be related to your campaign's purpose, such as "keyword discovery" for new products or "keyword expansion" for existing items. Meanwhile, the term "additional identifier" can relate to the type of ad you're running, such as Sponsored Product (SP), Sponsored Brand (SB), or Sponsored Display.

So, a Sponsored Product campaign for your new packing cubes may look like this:
PackingCubes_KWDiscovery_40%_SP.

If you own a small business with one or two products, you may wish to run only two campaigns: a "best or top sellers campaign" with a slightly larger budget and an alternative campaign with a lower budget. Once your business and marketing budget grow, you can launch a few ads focused on specific products.

Need Help with Your PPC Ad Strategy?
VAamazon can help if you need a refresher on PPC ad management essentials or external assistance in designing campaigns that will yield higher results. If you don’t know how to optimize Amazon PPC ads then you should hire an amazon ppc agency. They will optimize you ads and will help you to generate more sales and ROI.