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Amol Ghemud Published: August 14, 2019
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An Amazon PPC campaign is an essential, cost-effective way to increase visibility, sales as well as boost not only your organic rankings but drive profitable sales.
But the way you run a PPC campaign yields favorable or unfavorable results.
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How does a pay-per-click campaign work?
Image: Pay per click campaign
When a user searches for the desired product on Amazon, the search results show organic results as well as “paid” results. Sometimes these sponsored posts are at the top, bottom, side, or mixed in with the organic postings.
Those “paid” or “sponsored” search results are PPC ads. A seller runs an Amazon PPC campaign to get their posts sponsored under certain keywords.
With a PPC campaign, you pay only when someone clicks your ad. This increases the chance of higher return on ad spend. If people are clicking on your ad, that indicates they’re already interested in your product. Then your product listing is responsible to convert those clicks into sales.
In an ideal situation, the desired ratio of impressions to clicks to sales is 1-1-1. While you don’t pay per impression, but you would ideally want each impression to equate to a click. You then want that click to convert to a sale.
With a high impression rate but low click rate, you’re likely not attracting people to click on your listing. This doesn’t technically cost you any money, but it’s a waste of resources and energy.
You want to make sure that your listing elements that appear in ads i.e. headline, main photo, and product price are attractive and click-worthy.
If you have a high click rate and low sales, this your listing isn’t converting. This is costs you marketing money since you pay based on clicks, not sales. Thus, make sure that your product listings are completely optimized for a high sell-through.
5 Hacks to Run a Successful Amazon PPC Campaign
1. Optimize your Listing
Running a successful PPC campaign requires a high level of optimized listing. If your listing isn’t optimized, you’ll be wasting money at a campaign without a return. An optimized listing is very essential to attract clicks and convert sales. Without an optimized listing, you’ll likely have to pay for clicks without making any return on sales.
Listing optimization is the basis for attracting customers and sales.
Determine Your Target ACoS
Image: Determining target ACoS
ACoS is the percent of attributed sales spent on advertising. You can get this number by dividing the total ad spend by the number of attributed sales. The attributed sales are those sales that come directly from the ad.
For example, you spent $50 on advertising. You receive $200 in sales directly from that advertising. Your ACoS is 25% If you spent $70 on advertising and received $200 in attributed sales, your ACoS would be 35%.
Your desired ACoS will be decided on your target goals. If you are launching a new product, ACoS might be a breakeven point. This means the ACoS & your margin will be equal.
For example, you sell a product that has a margin of $10 (you make it for $10 and sell it for $20). Your margin is 50% of your revenue. If you spend $10 on advertising and receive $20 in sales, your ACoS is 50%. The margin and ACoS percentages are equal, which means you’re breaking even without making any profit.
A strong target ACoS is 20%, which indicates a balance of sales and profitability. This is a strong target for trending products that have a proven sales record in past months.
2. Select the Right Keywords
Image: Selecting right keywords
With PPC ads, you have to “bid” on keywords. The goal here is to:
1. Find profitable keywords
2. Increase the sales from low ACoS keywords
It is advisable to start with an automatic campaign to help choose the right keywords. Amazon will run this campaign for you, automatically picking appropriate keywords based on the Amazon algorithm & your ‘optimized listing’.
Once a week, look at the keywords for which Amazon is showing your product. Look at the search term report. This will show you the keywords/search terms which are most searched and which most convert to sales and at what ACoS. This lets you know how many people are searching for that keyword and purchasing from you.
You can also filter search terms by spend to see where you are spending the most money. If the high spending search terms are not the same as the high converting ones, it is better to turn those search terms into negative.
This will help you determine which search terms are working for your listing. From there, you can run a manual campaign bidding on working search terms as keywords.
Always remember to optimize your keyword bids as well. You can specify the maximum amount you want to pay for a specific keyword when a user clicks on your ad. If your competition is strong for a particular keyword, you may need to increase the bid for that keyword. Due to budget restrictions if you can’t raise your bid, then try to target long-tail & less competitive keywords.
3. Select the Right Products
Image: Products
When you run automatic campaigns, along with the search terms, you see the ASINs of other products. Those are the products below that your listing appears like an ad. Such ASINs are usually related or competitor products.
Alike keywords, some ASINs produce high sales & some yields none.
With Amazon’s product targeting, you can target those specific ASINs in manual campaigns. Make sure to include only those ASINs which have high sales & low ACoS.
4. Select the Right Negative Keywords
Image: Negative keywords
Now that you’re optimizing for high conversion keywords, it is also essential to remove non-converting keywords that are wasting money. You can add them as “negative keywords” and Amazon will make sure your ad does not appear for these searches.
This will narrow the search funnel to ensure your ad is shown only to relevant searches.
For example, you sell a premium product. You can put “cheap” or “inexpensive” as a negative keyword. Amazon will block your ad from appearing in searches with “cheap,” which could otherwise cause in an irrelevant click.
5. Select the Right Negative Products
In your automatic campaigns’ search term, you observe the ASINs to which spend is attributed but no sales. These ASINs are either not relevant to your product or might have less price.
In this case, it is better to add those ASINs into negative targeting.
Conclusion
An Amazon PPC campaign is a strong opportunity to improve product visibility and sell through inventory. With an optimized listing, monitored keyword bids, and a controlled marketing budget, you can ensure your PPC campaign shows a strong return on ad spend.
An Amazon PPC campaign drives sales, which directly signals to Amazon's algorithm that your product is relevant and popular, boosting its organic ranking. A highly optimized listing is essential because it ensures the traffic you pay for converts into sales, validating the ad spend and fueling this growth cycle. Without a conversion-focused listing, you pay for clicks that do not result in sales, leading to a high ACoS and wasted budget. A successful strategy hinges on this synergy between paid visibility and conversion readiness.
Your listing must be optimized for:
Click-Worthy Elements: Your main photo, headline, and price must be compelling enough to earn the click in a crowded search result page.
Conversion-Focused Content: Once clicked, the rest of your listing must persuade the shopper to buy, turning that ad cost into revenue.
Keyword Relevance: The listing must be optimized for the keywords you are bidding on to ensure a high sell-through rate.
A strong target ACoS of 20% is achievable when a listing is built to convert, making your advertising profitable. To learn how to structure your campaign from the ground up, explore the full guide.
This common scenario indicates a significant disconnect between what your ad promises and what your product page delivers, causing you to pay for interest that never converts to revenue. The root cause is almost always a poorly optimized listing that fails to persuade shoppers after they click. Fixing this conversion gap is the key to transforming a costly campaign into a profitable one. To resolve this, you must analyze and improve several key areas of your listing.
Review Your Main Image and Title: Ensure they accurately represent the product and align with the ad's promise.
Strengthen Your Bullet Points: Clearly articulate the primary benefits and solve a customer's problem in the first few seconds.
Evaluate Price and Reviews: If your price is too high or social proof is weak, shoppers will abandon the page.
Remember, with an Amazon PPC campaign, you pay per click, not per sale. A high click rate with low sales directly inflates your ACoS, as seen when a 25% ACoS can quickly become 50% or more. Discover the specific techniques for turning those clicks into profitable sales.
The most effective method is to use an automatic campaign as a data-gathering tool before committing significant budget to specific keywords on Amazon. This approach systematically uncovers how real customers search for your product, forming the foundation of a profitable manual campaign. Your initial goal is not profit but data acquisition and establishing a breakeven point.
Follow this process:
Launch an Automatic Campaign: Start with a broad, automatic targeting campaign with a moderate daily budget.
Gather Performance Data: Allow the campaign to run for at least one to two weeks to collect sufficient data on clicks, impressions, and sales attributed to different search terms.
Analyze the Search Term Report: Identify the customer search terms that generated sales at a reasonable advertising cost.
Establish a Breakeven ACoS: For a new product with a 50% margin, your initial breakeven ACoS is 50%. Aim for this to maximize visibility without losing money.
Migrate Winning Keywords: Move the proven, profitable keywords from your automatic campaign into a new manual campaign for more precise bidding and control.
This initial discovery phase is crucial for building a scalable and efficient advertising strategy. Learn more about how to transition from discovery to a profit-focused campaign in our detailed guide.
Advertising Cost of Sales (ACoS) is a key metric that measures the efficiency of your Amazon PPC campaigns by showing the percentage of attributed sales spent on advertising. Setting a target ACoS is critical because it transforms your ad spend from a simple expense into a strategic tool aligned with specific business goals. Your ACoS target dictates whether your campaign is optimized for aggressive growth or maximum profit.
For example, if you spend $50 on ads and get $200 in sales, your ACoS is 25%. The right target depends on your goal:
Product Launch: You might set a breakeven ACoS equal to your product margin (e.g., 50% ACoS for a 50% profit margin) to maximize visibility and sales velocity without immediate profit.
Profitability: For an established product, a strong target ACoS of 20% or lower indicates a healthy balance, ensuring that ad spend is generating profitable sales.
Understanding how to strategically set and adjust your target ACoS is fundamental to running successful campaigns. Delve deeper into the methods for calculating and managing your ACoS for different scenarios.
Automatic and manual campaigns serve distinct strategic purposes within your Amazon advertising efforts, offering different levels of control and discovery. An automatic campaign lets Amazon's algorithm find relevant keywords for you, while a manual campaign gives you precise control over which keywords you bid on and how much you spend. Choosing the right type depends entirely on your product's lifecycle stage and your immediate goals.
Consider these factors when deciding your approach:
Automatic Campaigns for Discovery: Best for new product launches. They act as a research tool, uncovering customer search terms you might not have considered. You can then harvest these proven keywords for manual targeting. The goal here is data collection, often at a breakeven ACoS.
Manual Campaigns for Profitability: Ideal for established products with known converting keywords. This approach allows you to bid more aggressively on what works and eliminate wasteful spending on terms that do not convert, helping you achieve a strong target ACoS like 20%.
Using both in tandem, starting with automatic and migrating to manual, is a powerful strategy. Explore the nuances of managing a hybrid campaign structure to maximize your results.
Setting a breakeven ACoS of 50% for a product with a 50% margin is a powerful launch strategy that prioritizes market penetration over immediate profit. This approach allows you to bid competitively on Amazon, maximizing impressions and sales velocity, which in turn boosts your organic ranking and gathers crucial customer data. You are essentially reinvesting your entire profit margin back into marketing to secure a foothold in the market. For instance, spending $10 on advertising to generate a $20 sale (with a $10 profit) means you break even on that transaction but gain a customer and a sale for your ranking. The signal to shift towards a more profitable target, like a 20% ACoS, comes from analyzing campaign data. Once your automatic campaigns reveal a consistent set of high-converting keywords and your organic rank improves, you can move those keywords to a manual campaign and begin optimizing for profitability. Discover the key performance indicators that signal it is time to transition your strategy.
A high impression rate with a low click-through rate signals that while your ads are visible on Amazon, they are not compelling enough to earn a click from potential buyers. This represents a significant missed opportunity, as you are failing to capitalize on your ad's visibility. The problem lies in the three core elements visible to the customer in the search results before they click.
To diagnose and fix this, you should immediately evaluate:
Your Main Photo: Is it professional, clear, and more appealing than your competitors' images?
Your Ad Headline/Product Title: Does it clearly communicate what your product is and include the primary keyword?
Your Product Price: Is your pricing competitive for your category? A price that is too high will deter clicks.
You are not paying for these impressions, but they indicate a waste of potential. Improving these "shop window" elements is crucial to improving your click-through rate and starting the journey toward the ideal 1-1-1 impression-to-click-to-sale ratio. Explore advanced techniques for A/B testing these elements to find the winning combination.
The role of Amazon PPC is shifting from a direct sales tool to a central component of a holistic brand-building and market intelligence strategy. In a crowded marketplace, relying on PPC for sales alone is not enough; it must be used to influence organic rank, gather customer data, and defend brand space. Sellers must evolve from tactical campaign managers to strategic market analysts to stay ahead.
To adapt your strategy for the future, consider these adjustments:
Focus on Total Profitability: Instead of just ACoS, track Total ACoS (TACoS) to understand the impact of ad spend on total sales (both paid and organic).
Use PPC for Data Mining: Continuously run automatic campaigns to discover new keywords and changing customer search behavior.
Invest in Brand Defense: Bid on your own branded keywords to protect against competitors poaching your customers.
The future of Amazon advertising involves a deeper integration of paid campaigns with overall business strategy. Uncover how these advanced metrics and approaches can future-proof your brand on the platform.
The difference between a 25% and a 35% ACoS for an established product on Amazon often comes down to disciplined keyword management and strategic bidding. The more efficient campaign actively eliminates wasteful spending and doubles down on proven performers. Highly profitable campaigns are not just about finding good keywords, but also about aggressively pruning the bad ones.
Key strategies that create this efficiency gap include:
Negative Keyword Implementation: The 25% ACoS campaign manager is likely using negative keywords to prevent their ads from showing on irrelevant or low-converting searches.
Bid Optimization: They are bidding higher on keywords with a proven history of high sales and a low ACoS, while reducing bids on moderately performing terms.
Focus on Long-Tail Keywords: The more profitable campaign often targets longer, more specific keywords that have lower competition and higher purchase intent.
Achieving a top-tier ACoS requires moving beyond a "set it and forget it" approach. Learn how to implement a continuous optimization cycle to refine your keyword strategy for maximum profitability.
Reducing a high ACoS for an established product requires a shift from a growth-focused strategy to one centered on efficiency and data-driven optimization. This systematic process involves refining your targeting to eliminate wasted spend and maximizing your return on profitable keywords. The goal is to spend less on non-converting clicks and more on clicks that lead to sales.
Here is a three-step plan to achieve this on Amazon:
Conduct a Keyword Audit: Analyze your search term report to identify keywords with high spend but no sales. Add these as negative keywords to immediately stop wasting money. Also, identify keywords with an ACoS far above your 20% target and lower their bids.
Optimize High-Performing Keywords: Find the keywords that are already converting at or below your 20% ACoS target. Gradually increase the bids on these "winners" to capture more impression share and drive more profitable sales.
Refine Product Listing: Re-evaluate your product listing for conversion rate optimization. Even a small improvement in your conversion rate can significantly lower your ACoS, as more of your paid clicks will turn into sales.
This disciplined approach transforms your campaign from a cost center into a profit driver. Dive deeper into the specific reports and settings you need to manage this optimization process effectively.
Your main photo and price are the first, and often only, elements a shopper sees from your PPC ad within Amazon's search results, making them the gatekeepers to a click. Optimizing them beforehand is essential because they directly influence your click-through rate and initial cost efficiency. If these elements fail to capture attention and convey value, even the perfect keyword strategy will fail. Your ad spend starts the moment a shopper clicks, so that click must be earned by a compelling visual and a competitive price. An ad with a great keyword but a poor image will get impressions but few clicks, wasting its potential. A product priced significantly higher than competitors will be ignored. For example, achieving the ideal 1-1-1 impression-to-click-to-sale ratio is impossible if the initial "ad" presentation is weak. A target ACoS of 20% is only feasible when the foundational elements of your listing are strong enough to attract qualified clicks. Learn how to A/B test these critical visual and pricing elements to maximize campaign performance.
Reaching the theoretical 1-1-1 ratio is the ultimate goal of ad efficiency, and future Amazon advertising tools will likely use AI to automate the micro-decisions required to approach it. This will shift the seller's role from manual bid adjustment to strategic oversight and creative optimization. Your competitive advantage will come from feeding the AI better inputs, not from out-clicking it on manual tasks.
Expect to see these changes:
AI-Driven Bidding: AI will manage bids in real-time based on conversion probability, moving beyond simple keyword targets to audience-based ones.
Automated Creative Optimization: The platform may automatically test and feature the best-performing main image or headline for different user segments.
Predictive Analytics: Tools will forecast which keywords are trending and suggest budget allocations before you could spot the trend manually.
Your focus will need to shift to high-level strategy, such as defining the correct target ACoS for different business goals and ensuring your product listings provide high-quality creative content for the AI to use. Prepare for this shift by mastering the strategic fundamentals of campaign goals today.
Amol has helped catalyse business growth with his strategic & data-driven methodologies. With a decade of experience in the field of marketing, he has donned multiple hats, from channel optimization, data analytics and creative brand positioning to growth engineering and sales.
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