A Word on Amazon Keywords
Before talking about various Amazon keyword bidding strategies — let us quickly recap the fundamentals of marketing on Amazon.
Essentially the bulk of the work with Amazon PPC revolves around keywords. Finding keywords for your campaign can be a taxing job that takes a lot of your time. Using a clear and target-tailored Amazon PPC Campaign Structure can make starting a campaign easier and really save yourself or your PPC manager dozens of work-hours when optimizing later on.
But regardless of how the pool of good keywords is formed, it will require further optimization after launch. And depending on the strategy that best suits current business goals - this optimization will differ.
While this article is about bids, we do imply that the campaign level setting called “Campaign Bidding Strategy” is set at “Dynamic Bid - Down Only”. This both gives a seller maximum control over spending and allows Amazon to match the ads with many search result auctions freely.
Amazon PPC Strategy That Matches Your Goals
A typical Amazon seller will want a different strategy for every stage of the product’s life cycle on Amazon.com. In order to understand this, let's see what they are:
Strategy for a Brand-New Amazon Product
At the very beginning of selling a product, the seller usually has little idea about which keywords will end up bringing sales. The strategy goal here is to pick only the good ones and make them work for the business. So…
Gauge the Impressions and Click-Through Rate (CTR) of the whole collection of keywords included in the new PPC campaign.
To do this, a seller should start with lower than average bids for all of the keywords. To set the bids low enough, take values equal to or less than ⅔ of the bid that is recommended by the Amazon.
Setting the bids low will bring some traffic, but not at too high a cost. Running PPC like this for 2-3 weeks should harvest enough Search Results, CTR data (and maybe even conversions) to move to Step 2.
To carry on, a rearrangement of existing campaigns is required.
Take the discovered effective keywords (in their exact form) and group them into separate, themed ad groups (about 5-20 keywords per ad group). These groups will make Step 3 easier to execute.
Take one new ad group - and start bidding incrementally higher for all of its keywords.
The objective here is to test how these keywords behave under low, medium, and high bids and find the “sweet spot” in your Amazon keyword bidding. Set the next bid to be 1.5 times higher than the existing one. Wait and watch.
See how the CTR, conversions, and Average Cost of Sale (ACoS) respond. Do not rush it! Seller Central reporting mechanism is data-driven and ideally requires at least 7 days to have enough data to build your confidence level to justify your next approach or action within the next bid iteration.
When individual bids from this initial ad group eventually reach 3-4 times what Amazon recommends them to be, you can assume that all placement options for these keywords have been tried & tested:
- Selling with low-end bids for low volume + low ACoS results
- Selling in the middle of competition with medium bids and winning orders due to product quality
- Selling from as high ad positions as Amazon.com will currently allow for your product (at max bids as affordable and for maximum impressions and CTR)
Once you have this first-hand data, you can analyse it and pick the placement that worked best for this ad group. Now you can confidently revert the bids to values that will generate optimal conversions AND ACoS.
Then move on to the next ad group.
Rinse and repeat.
Doing this will eventually leave you with a pool of good-quality, converting keywords that are good for your product, for the current state of its product detail page and its current BSR.
The Strategy of a Rising Star Product
The mention of “current state of product detail page” in the previous strategy is very important.
As the product gets incrementally more sales, its BSR improves. Also, with more sales come more reviews (usually 1 review per 100 orders). And if the product quality is good and the customers are happy, these reviews will be good, improving your product rating.
These two factors mean that a product can become more attractive to Amazon’s search algorithms over time, and be shown higher up in the search results for organic and Sponsored Ads.
Once this starts to happen, a PPC manager can then start bidding more aggressively on some keywords that did not work well before (for example, keywords that previously had too-high of an ACoS).
Testing out these old keywords can be executed in the same manner as in Step 3 of the Strategy for a Brand-New Amazon Product laid out above — by starting with small bids and slowly working them up. You may find out some of these previously poor-performing keywords are now getting you more sales at higher profit: generating your sales flywheel even further!
Strategy for a Mature Product with a Unique Feature Set
More often than not, an Amazon Category and Subcategory will host a lot of competing products. And it’s not always practical to battle for the top positions.
For example, a product can be good enough, but not the best quality… or one may simply lack the scale of sales ( coming from leads outside Amazon.com, organically within and though your PPC budget) to effectively compete with the top sellers.
Still, there is a way to secure some sales. This can be achieved by positioning the product as unique and different from the mainstream competitors. Imagine you are selling massage equipment. You can go head-to-head with top competing brands. Or you can focus on a) the market for kids, b) post-trauma recovery massage or с) relaxing spa massage equipment that goes well with aromatherapy candles and massage oil…
This slight diversification will require you to change your product to some extent and to adjust your listing. In terms of PPC strategy, you will also need to laser-focus your budget and bid high for keywords that define your upgraded product.
But since there are fewer search terms to compete for - you should be able to use your PPC budget with more efficiency. Another way to do this is to change your Amazon Campaign Bidding Strategy setting to “Fixed Bid” and take part only in auctions with an acceptable bid level: thus limiting sales but securing your ACoS.
Strategy for a Top Amazon Product Seeking Dominance
This is our favorite type of strategy. For anyone who has had a taste of selling at the top position with high-performing keywords, you know you will be fighting to stay there if you have any smart competition in your space.
Especially when something like a little orange “Best Seller” badge is at stake.
Because of this intense competition, there is no fixed strategy for the top-sellers. There are periods where you will find yourself in the top position, generating high sales with very modest bids falling even around the Amazon-recommended bid level!
If that is your case — lucky you!
At other times it can turn into a real bid war, with all major players increasing their bids by 5-10 times to see who bleeds dry first. At such times you may want to sit out the fight and take a plunge in sales while retaining a reasonable ACoS.
Or you can get ready to monitor the situation and increase your bids to deny competitors their share of advertising position - and see if you can gain the upper hand in this battle!
Whatever stage your product is at and whatever your PPC strategy, you’ll want to be sure that you’re tracking your inventory levels, and you increase your sales to avoid running out of stock. Tools like SoStocked can help you do just that. Your PPC strategy can go south real quick if you run out of stock, so plan wisely.