If you recently heard “pay-per-click advertising” and thought you heard “paperclip advertising,” you might be new to this whole PPC thing. That means you might have also asked yourself, “When is it time to start my PPC campaigns?”
The Badger is here to answer that question. Today we’re going to talk about:
- Timing PPC campaigns in Amazon
- Best campaign types for a new launch
- Launch strategies, from bids to budgets
- Next steps after smashing your goals
When to Start Your Amazon PPC Campaigns
Remember in college those courses that had “prerequisites?” As a Badger, I never liked school. But those prereqs were necessary because those classes built upon a previous foundation.
PPC campaigns are similar. There are a few things you need to take care of before you launch a new campaign. Otherwise, you’ll be like Leo throwing Benjamins into the sea.
- Minimum Number of Reviews
- Stocked Inventory
- Performance Metrics
Minimum Number of ReviewsTypically, you need at least 5 reviews for the average Amazon consumer to consider your product. But there’s a slight caveat to that:If you have 5 reviews, but they’re averaging three-stars, you’re not ready yet.
You should try getting at least 5 more five-star reviews, that way you’ll have a total of 10 reviews with a four-star average. Otherwise, you’ll never be able to compete with your better-reviewed neighbors.
An ordinary Amazon SERP (search engine results page) will display at least 60 products. On that first page, the overwhelming majority of products have at least 4 stars. So if your product only has 3 stars, you’re like that nerdy kid in school who nobody liked.
So at a minimum, you need 5 reviews with at least a 4-star rating.
But realistically, you’ll struggle to compete with longer-standing competitors until your product gets at least 15 reviews with a 4-star average rating.
(Exceptions to the rule: Bigger companies with strong brand awareness may be able to get away with running PPC campaigns from the get-go without any reviews. If this is you, expect lower conversion rates at first until your product breaks past that 15-review threshold.)
Q: What’s the fastest way to shipwreck your product’s performance?
A: By running out of inventory.
A lot of FBA sellers start off by shipping their product to an Amazon warehouse in California, from where it will get dispersed to Amazon fulfillment centers across the US.
One thing to keep in mind is that this process takes time, which means if you start your PPC campaigns too early (i.e., right after sending your product to Amazon’s warehouse), there’s a chance your inventory could become unavailable while Amazon is moving it around, bringing your PPC campaigns to a screeching halt.
What’s worse is that sales velocity is your best friend in terms of getting your product ranked on the first page of Amazon’s SERP (both paid and organic rank). If you lose that sales velocity because of inventory, you may as well have committed e-commerce suicide.
Bad performance going in = bad performance coming out.
Simple as that.
This means you need to check your ASIN’s performance before setting up a campaign for that product. To do this:
- Mouse over the Reports tab at the top of the screen.
- Select Business Reports.
- On the left-hand column, under By ASIN, select Detail Page Sales and Traffic.
- Your ASIN Conversion Rate will be presented in the Unit Session Percentage column.
Considering that the average conversion rate is about 10%, your product should have at least a 7% conversion rate (“Unit Session Percentage”) before you start running PPC.
If your conversion rate is less than 7%, your PPC campaign will likely experience:
- High ACOS, because you’re not getting enough sales to pay for your ads.
- Low visibility, because you set such a low bid targeting a profitable ACOS.
So make sure you’ve optimized your product listing and that your conversion rate is above 7%.
Launching Your Campaigns
At least 15 solid reviews? Check.
Inventory stocked? Check.
Product listings optimized? Check.
So what next? It’s time to launch your campaigns!
Your First PPC Campaign
When it comes to picking a campaign type for a new product, there’s no better choice than Automatic Campaigns.
These campaigns do the heavy lifting and cut out hours of keyword research (or worse, keyword “dumping”) by letting you take advantage of Amazon’s A9 algorithm.
The A9 algorithm scrapes the front-end of your product listing (Title, Bullets, and Backend Keywords) and tries to play matchmaker with Amazon searchers based on their search queries.
Not having to choose your keywords is convenient, but having no control over your keywords is deadly. That’s why we don’t stop with Auto Campaigns.
Your Second PPC Campaign
Once you’ve run your Auto Campaign for a couple weeks, you’ll have enough data in your search term reports for keyword selection.
The next step is to create a Manual Campaign in which you select the keywords you want to target.
Finding and adding those keywords is easy. I already made a lengthy post about how to do this, but being the kind Badger that I am, I’ll summarize here:
- Download your Search Terms Report in Advertising Reports
- Apply a filter to your spreadsheet where “7 Day Sales > $0” (this will only show search terms that actually earned a conversion)
- Copy & Paste search terms from your Auto Campaign into your Manual Campaign as Exact Match Keywords
- Add those same keywords as Exact Negatives to your Auto Campaign to prevent keyword cannibalization!
You can also create a third campaign, this one targeting competitors. The steps are the same as above, only instead of search terms you’d be copying & pasting the converting ASINs into a product targeting campaign.
Sound like a lot of work? It is. And we hate it too. That’s why we built a tool to automate this process.
Launch Strategies: Badgers, Bids, and Budgets
How to Find the Right Starting Bid
When you’re just starting off, there are two strategies you can go with:
- The Inch-Up Method
- The Performance-Based Prediction Method
The Inch-Up Method
The Inch-Up Method is a “slow and steady” strategy. With this method, you would start your bids at a low price and make small, daily increases until you have enough data (at least 1 conversion and 10 clicks) to determine an optimal bid price.
The optimal bid price is calculated with this equation:
Bid Price = (Total Sales / Total Clicks) * Target ACOS%
Need help finding your Target ACOS? Check out this article.
The Performance-Based Prediction Method
When adding a new keyword, you don’t have any performance data for that keyword yet. You’re missing the sales and clicks (from the equation above) needed to determine a bid price.
You do, however, have your ASIN’s performance data (see our discussion on Performance Metrics above).
With this bid strategy, your bid calculation would look something like this:
Bid Price = ASIN Conversion Rate% * Unit Sales Price * Target ACOS%
This strategy can get you up and running a little faster than the Inch-Up Method, at the risk of starting the bid a little too high (i.e., if the keyword itself does not convert at the same rate as your ASIN’s average conversion rate).
How to Determine Your Budget
This one’s easy. You don’t need one!
As long as your ads are profitable, you should be okay with spending more dough. After all, the more you spend, the more profit you rake in.
Again, that’s if your ACOS is profitable.
Before you know how your ads will perform and what your ACOS will be, a good starting budget is something that will get you at least 30 clicks a day, so that you can collect enough data to make informed bidding decisions moving forward.
Next Steps: Outsourcing
Pretty soon, your products will be taking off like a cheetah. As your Amazon business grows and you add new products and campaigns, eventually you will cross a threshold of sustainability.
The daily keyword research, bid optimization, and campaign creation/management will eventually take up more than your time is worth. You are running a business, after all!
At some point, your account will have so many campaigns and tiers that you will have to start looking for time-saving solutions.
You’ve got a couple choices:
- Hire an agency
- Get a PPC tool
Hire an Agency
How would you like to never have to think about PPC again?
For a lot of businesses, hiring an agency is cheaper than hiring a full-time PPC Manager. And since agencies charge a small percentage of your revenue, they’re incentivized to make you as profitable as possible!
Get a PPC Tool
Software that’s built for PPC uses algorithms and machine learning to make data-informed decisions.
These tools take emotion and guess-work out of the equation, only using PPC stats to automate processes such as keyword bid optimization, keyword research, and negative keyword optimization.
These tools allow you to keep full control over your campaigns while saving you from hours of daily campaign optimizations.
Another advantage of using automation software is that it’s usually cheaper than an agency because you still have to “push the buttons.”
Oh, did you not know? Ad Badger is one of those PPC tools. 😉
The Bottom Line
Remember to go through your preflight checklist before starting a new PPC campaign.
For each product, ask yourself:
- Do I have at least 5 reviews with a 4-star average?
- Are Amazon fulfillment centers fully stocked with my inventory?
- Does my product have at least a 7% conversion rate?
Now just run an auto campaign for a couple weeks, then beat the living keywords out of it with a little RPSB!
Wow, look at you. You’re a smarter, faster, better-looking Amazon seller already.
You go, little badger. 😉