When you’re building new PPC campaigns for Amazon, strategically organizing your campaigns is just as important as finding the right keywords to bid on. At the end of the day, you want your Amazon PPC campaigns to make a profit; figuring out how you’re going to allocate your budgets and optimize your bids so you do profit can get a bit technical and tricky.
To do this, you need to understand the marketing funnel and where a user is in their journey toward a conversion when they click on one of your ads. Afterall, you don’t want to dedicate most of your budget to users less likely to buy one of your products.
Enter the Marketing Funnel
If you haven’t come across the concept of a marketing funnel before, think of it, well, like a funnel. The widest part at the top represents users who are just becoming aware of your brand or the type of products you sell. As a user chooses to learn more, they move further down the funnel as it gets thinner. Then, the funnel ends at the thinnest portion at the bottom; this represents a user making a transaction.
A user doesn’t typically go from the top of the funnel to the bottom of the funnel–from just becoming aware to being ready to buy–in one instant. This process takes time. Many people who become aware of your brand will likely drop out of the funnel, represented by the visual getting thinner as you move down. You’re never going to win them all. But, you can win enough of them to profit. You just need to be able to identify where users are in the funnel and make sure you spend your budget on mid-to-low funnel users who are more likely to convert from your paid ads.
So, how do you figure this out? How can you, the advertiser, know where users are in the marketing funnel to help ensure you profit off your investments. The answer: organize your campaigns by keyword categories that correspond with specific portions of the funnel. Then, set your budgets and bids accordingly.
3 Keyword Categories to Know
There are three categories to keep in mind when setting up Amazon PPC campaigns:
- Generic product keywords (mid-funnel)
- Brand keywords (mid-to-low funnel)
- Brand + product or specific product keywords (low funnel)
These three categories of keywords are what you’re going to encounter most in Amazon’s search environment. The more specific a search query gets to your brand or one of your products, the more likely a user is to convert. Here’s a brief overview of each category to help you understand why.
Generic Product Keywords – these indicate someone is solution-aware; they have an issue or a desire and they’re looking for a product which will meet their needs. However, these users aren’t necessarily aware of a specific brand or product which will do this. They may be researching or window shopping. Regardless, this type of user is the highest up the funnel out of the three categories we’re covering. These keywords are more saturated (e.g. there’s more competition for impressions and clicks) and less likely to lead to a conversion.
Brand Keywords – these indicate someone knows about your brand already. Either they’ve bought from your brand before, you’ve been recommended to them in some fashion, or you have a reputation strong enough to cause them to search for you. This type of user is a bit further down the funnel and, thus, these keywords are more likely to convert.
Brand + Product/Product Specific Keywords – these are the strongest indication a user is ready to buy. They’re searching for a specific product title or a product type that’s provided by a specific brand. These users know what they want and are at the bottom of the funnel. Hence, these keywords are most likely to convert.
Organize your Amazon PPC campaigns with these three types of keywords in mind. Make sure you bid high for your low funnel keywords and assign enough budget to these campaigns so you cover as many of these searches as possible. As time goes on and you collect more conversion data, you’ll be able to optimize your budgets and bids based on a user’s readiness to buy and improve your profit margins.