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The latest news and industry insights for all things Amazon advertising, both for agencies and sellers. Keep in the loop for Amazon search and display stories, as Nozzle helps brands leverage success in the e-commerce world.

Prioritizing products within your Amazon PPC campaign

    Competing with your own ads is something you never want to do. Within Amazon PPC campaigns, it can happen all too often. If you have multiple products that could qualify for the same keyword, there is a chance that you are competing against yourself in bids — driving up costs and delivering underperforming outcomes. If you want to avoid competing with yourself, you need to prioritize your PPC bids. That means understanding how to control where your bids are placed and building metrics around your prioritization choices. 

    To increase profitability, the best approach is to use unique keywords and eliminate any crossover between products, but this does raise other issues. Finding, isolating and targeting those best bet search terms per product is a process known as Search Term Optimization. We are going to explain this in greater detail. However, there are also some structural approaches that will be a great help in being able to prioritize effectively.

     

    How to know which products to prioritize

    In order to make an informed decision on which products to prioritize, you will need a firm grip on:

    • Conversion rates and PPC data

    The first order of business when looking to understand which ads are successful is to analyze attribution and conversion rates. However, you should also look to consider long-term factors like customer-life-time value and how products fit within buying trajectories associated with different customer personas. Together, this approach will let you gain a view of which products are the most valuable, generally, and in specific cases. 

    As you’ll receive large volumes of data on search queries, you can also observe trends in search queries to help determine which new products you should invest in on Amazon.

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    Getting the basics right 

    A key part of approaching your campaign structure is setting your goals. This enables you to prioritize the performance of ads for products against those goals. 

    The fundamental goals of any PPC campaign can be boiled down to:

    Generating the best Advertising Cost of Sale (ACOS)  by:

    • Getting the right products in front of the right customer (whether that is your highest priced item or the item you have best margin)
    • Spending your budget to best effect 

     Generating data, which can be used for:

    • Product listing optimization 
    • Product and customer analysis

    Leading to:

    • Improved organic rankings
    • More sales opportunities

    Your campaign structure has to be built to meet these goals. The options you must decide on to build your campaigns include choosing ad types, placement options, and targeting. These need to be aligned to your ongoing keyword strategy. For example, you might have to face hard decisions such as allocating a high converting term to a new launch product instead of a best seller. All these moving parts need to be managed to make your keyword strategies work — and for that you need structure.

    Name things correctly

    One of the most important areas to get right in defining your campaign structure is naming conventions. If you are going to be able to prioritize in the future, it’s best to include any aspect of your campaign that you will wish to segregate or prioritize in the name, be this campaign type, product category, brand or non-brand. 

    To enable precise bid management, at the next level you could also consider placing each product and its variations in its own ad group. With this campaign structure, you can prioritize individual products to drive traffic at a lower price to that product detail page. There is a trade off to this as you can only control your budget at campaign level. If you want more control on budget allocation, you would need to list all of your products at a campaign level.

    Identify your products

    In addition to targeting by keywords (Auto and Manual), Amazon provides Product Targeting based on specific products, categories and brands similar to your products. By considering how to structure your campaigns, you can consider using Product Targeting to prioritize products that have a clear advantage over your competitors. 

    When considering product listings, you should also look at whether your product portfolio lends itself to include product variations within the same product listing. 

    Choose how you target your campaigns

    There are several options available here, depending on the campaign type you’re building and how granular you’d like to go.

    We have already touched on Product Targeting. However, you should engage with keyword targeting — using both the Automatic and Manual functions available to you. Automatic is useful to get started and throw your net wide. This is where subsequent prioritization will be needed and is where Manual keyword targeting comes in. You will have to work through keywords of varying match types (Broad, Phrase, Exact, Negative Phrase, Negative Exact) to match what your customers are searching for. Basically, you would use Auto, Broad and Phrase matching for research and Exact matching to get the best performance.

    Maintain your keywords and review bids

    Bid wins on Amazon are based on passing Amazon’s relevance criteria and then meeting estimated cost-per-click, and in the case of a tie, bid amount. This is a valuable tool that allows you to analyze how to get your best returns and optimum Advertising Cost of Sale (ACoS). Note: we don’t say “lowest” ACoS. Your overall goals may not be delivered by the lowest ACoS.

    In order to prioritize the best keywords with the best chance of winning bids, we recommend following this seven-step process:

    Step 1: Generate auto campaigns and list best-converting keywords to use for manual campaigns

    Step 2: List non-converting keywords for isolation or for exclusion

    Step 3: Isolate low-converting terms and bid down on them 

    Step 4: Prepare your manual campaigns with your optimal structure

    Step 5: Review status from keyword search terms for your manual campaigns

    Step 6: Analyze how they are performing and adjust bids to prioritize and meet target ACoS.

    Step 7: Rinse and Repeat 

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    Optimizing your campaigns

    Most successful campaigns are based on optimizing the performance of your keywords. To summarize, if you see a keyword that is converting very well in an auto campaign, move it to manual and set match types for optimizing bids and daily budget. 

    Typically, increasing bids on keywords with a high ROI should help bring in more revenue, and decreasing bids for the poorer performers will work towards maximizing spend efficiency.  

    It’s not a given that increasing the bid will increase revenue. If you are already at the high end of the bid range for that term then you should look carefully at increasing the bid. For example, if your bid is £1.5 and the CPC is £0.5, no matter how much you increase the bid you won't spend more than £0.50 as you are already winning the auction, unless another bidder bid more than that. However, if the CPC for that term is equal to the bid price, increasing your bid can increase your success with the campaign. 

    Search Term Optimization

    There are ways to achieve more precise control using techniques such as Search Term Optimization. This, for example, could prioritize profitable search term matches by transferring  all converting terms from research (Auto, broad, phrase) to exact and product targeting. You can then  negate all of these terms in research as exact negative. Then add all the converting terms in broad and phrase. 

    The final step is to add these terms as a negative phrase in Auto.

    This is based on the premise that:

    • Automatic Campaigns help keyword research; 

    Your goal is to let Amazon continually match new customer search terms to your ads. 

    • Exact match maximizes sales. 

    You need to remove or bid low on these keywords in your other Ad Groups as you are bidding aggressively on them in Exact.

    • Broad match helps identify new keywords you will want to add to Exact.

    You let Amazon match new search terms to the keywords running in a Broad match.

    However, you also do not want to bid on the same keywords in Auto that are already running in your Broad Ad Group. Consequently, you would add your Broad keywords to ‘Negative Phrase’ to your Automatic Campaign.

    Making negative a positive

    By clever use of negative keywords, you can ensure that your ads do not generate cost for specific (irrelevant) search queries. Negative keywords also play a strong role in Search Term Optimization, enabling you to control your matching criteria and hence prioritize bids for exact match, best performing products.

    Data analysis is the way to go

    Amazon is continuing to make more advertising data available to more Sellers. There are a lot of different benefits to data. One huge benefit is the ability to gather a longer-term view of how your products perform. For example, customer lifetime value (CLV), a prediction of the net profit attributed to the future relationship with your customer is a critical metric to understand, but a very hard one to quantify. You need to successfully track and attribute different sales on a very specific level. Using advanced algorithms, software can do the heavy lifting.

    The software options available to Amazon Sellers are wide ranging. We have already written extensively about this, and the different analysis options made possible. We would highly recommend checking out our eBook on the subject. However, the short version is that the right data analysis can help you build persona-targeted ‘buying-trajectories’. 

    A ‘buying trajectory’ is an estimation regarding the likely sequence of products that different consumers are likely to buy based on the first product that they buy from your brand. It also gives you insights on bundle recommendation to increase average order value (AOV). From an ad prioritization standpoint, what this allows you to do is estimate the lifetime value that different products statistically tend to generate. You can then use this information in conjunction with your conversion rate and ACoS data to make sure that you prioritize the products with the greatest long-term value to your brand.   

    You can start this process of product comparisons manually, and there are some excellent reports available to sellers by Amazon. But having analytics tools will deliver far better insights at scale, and will give you the time to actually do something meaningful with those insights. However, data is the final piece of the puzzle. 

    A good prioritization strategy starts with campaign structure and gaining a healthy understanding of how your different bid options function. Once you have that foundation in place, look to take things even further by contextualizing your bids using advanced software and data analysis. When taken together, you will optimize your performance on this increasingly powerful advertising and ecommerce platform. Get started and get planning!

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