7 Applied Steps To Scaling On Your Amazon Advertising
Co-founder at Sponsored Profit
Table of Contents
If you’re selling on Amazon, chances are you want to grow and scale your business. The best way to achieve that is to scale your Amazon Advertising. Why? Because Amazon Advertising is still the most profitable, effective, and powerful direct marketing channel for Amazon sellers.
In this article, I’m going to discuss 7 ways you can scale your PPC campaigns no matter where you are in your Amazon journey.
Are you ready to scale?
Before we dive in, you need to ask yourself if you are ready to scale. Amazon PPC is a marathon, not a sprint. Scaling your advertising means a greater investment in terms of money, time, and expertise; it’s not worth starting if you’re not prepared to see it through.
You’ll be increasing bids and budgets, adding new keywords and campaign types, and using more than just Sponsored Products ads. It will also entail a lot of research, analysis, testing to help you achieve your goals.
Before You Get Started
If you are ready to scale, there are a few things you need to do before you get started.
🚀 Set your goals: what do you want to achieve by scaling? Do you want more sales, top organic rankings, drive brand awareness, etc.
🚀 Know your numbers: What is the profit margin for the products you advertise? What is your target Advertising Cost of Sale (ACoS)? What is your True ACoS (TACoS)? How much are you prepared to spend on advertising to achieve your goals? What levels can you tolerate?
🚀 Time and expertise: How much time are you currently investing in advertising, and how much more time are you willing to spend? Are you experienced enough to spearhead expansion? If not, are you willing to hire someone who is?
Now that you’ve established that you’re ready, let me share 7 ways you can scale your Amazon Advertising.
1. Have 'ad-ready' product listings
Let’s start with the low-hanging fruit. You should always want to get the most out of your advertising dollars, especially when you start scaling your ad spend.
To do this, you need to make sure that your product detail page is ready for advertising. Having an ‘ad ready’ listing is all about ensuring that your product page is optimized, profitable, and primed for purchase before you start driving paid traffic to it.
This helps to secure prime ad placements and ensures your ads convert so that you get a return on your hard-earned ad dollars.
Both from a keyword relevancy perspective and a sales-conversion perspective, continually tweaking your listing can make a massive difference with your campaign performance.
Amazon has made it clear that the most relevant and best-selling listing is going to get prioritized when it comes to both organic and advertised positions.
Here’s a breakdown of all of the components of an ‘ad ready product listing:
- An attention-grabbing title with your product name, main keyword, and key benefit
- Concise and engaging bullet points that focus on the benefits of your product, not just the features
- A powerful product description that reinforces why the customer is going to love your product
- Checking your Backend Search Terms to make sure you are indexed for your main keywords
- If you are brand registered, A+/Enhanced Brand Content to help you to stand out with enhanced images and video content to boost conversions.
- High-quality, professional product photos that provide shoppers with all the information they need.
- A competitive price and ownership of the Buy Box
- At least 15+ customer reviews
- At least a 3.5-star rating
Remember to make one change to your listing at a time, then monitor performance. If you make more than one change at a time, it is impossible to know which change caused the performance increase (or decrease).
2. 80/20 Your PPC
The 80/20 rule, also known as the Pareto Principle, states that 80% of results come from 20% of actions.
When it comes to Amazon PPC, it is not unusual to find that 80% of your paid sales come from 20% of your campaigns or keywords. So it makes sense that this is where you should focus 80% of your ad budget to ensure you maximize sales and return on ad spend.
That leaves 20% of your ad budget for ongoing keyword discovery to continually test and add new converting keywords to maximize sales.
The easiest way to ensure you are focusing your ad dollars on the right things is to find your best-performing keywords.
To do this, you need to download a Search Term Report:
- Go to the ‘Measurement and Reporting’ tab in the Advertising Console
- Select ‘Reports’
- Select ‘Create report’
- Select ‘Campaign type’ (in the below example, we are selecting ‘Sponsored Products’)
- Select ‘Search term’ for ‘Report type’
- Select ‘Daily’ for ‘Time unit’
- Select ‘Last 30 days’ for the ‘Report period’
- Select ‘Run report’
- Click ‘Download’
Open up the spreadsheet and sort and filter your Search Term Report report by 7 Day Total Sales data to find which keywords are relevant and converting into sales
Admittedly, this is somewhat arbitrary, but as a general rule of thumb, you are looking for search terms with multiple sales (we recommend a minimum of 3 for new accounts, more for aged accounts) at an above-average Click-Through Rate (CTR).
Your CTR is the percentage of people that see your ads and click on them; it indicates how relevant your ad is to a shopper’s search query. The average CTR on Amazon is 0.4%, so you can use that as a benchmark.
Focusing your ad budget on fewer but better-performing keywords will give you the best opportunity to see a return on your PPC advertising cost because it:
- Improves the relevancy of your ads which will send more traffic to your listings;
- Boosts your PPC conversion rate so can generate more sales for the same ad spend;
- Brings the costs of your ads down over time
All of these will make it easier to scale, and more profitably too.
3. Uncap your budgets were applicable
Before you break out in a cold sweat at the sound of uncapping your budget, hear me out! You only want to consider this for campaigns that are at or better than your target ACoS.
When it comes to setting a target ACoS, we always start by targeting a ‘break-even’ ACoS. A break-even ACoS is when your ACoS is equal to your profit margin. For example, if your profit margin before ads is 30%, then that means your break-even ACoS is also 30%.
Targeting a break-even ACoS means you are driving as many PPC sales as possible at little or no cost to positively impact organic rank, and in turn, organic sales.
So if you have a campaign with a low budget that is performing well, at or better than your target ACoS, by uncapping the budget for that campaign, you give Amazon more freedom to show your ads whenever they can to maximize sales.
Raising your budget caps so these campaigns have ample room to grow is one of the easiest ways to scale your campaign. You just need to keep on the lookout for high ACoS keywords and optimize your bid accordingly.
4. Adjust your bidding strategy
When it comes to bidding on keywords, the optimal bid prevents you from spending too much or too little on each keyword to help you win the auction and hit your target ACoS.
Focusing on optimizing your bids is especially important before you scale campaigns with an above-target ACoS.
Here’s a simple formula you can use to do that:
First, you need to calculate Revenue Earned Per Click:
Total revenue/number of clicks = Revenue Earned Per Click
Now you can calculate your Maximum Bid:
Maximum Bid = Revenue Earned Per Click X Target ACoS%
Using this calculation, your bid increases as conversion increases or as in this scenario decreases as conversion decreases to prevent over-or under-spending.
When testing out this, or any new bidding strategy for that matter, make sure to wait 7 to 14 days before making any additional changes.
5. Continuously Test New Campaign Targeting and Campaigns
The only thing that is constant about Amazon Advertising is change! Amazon is regularly adding new campaign types and targeting options as their advertising platform matures.
The key to any successful ad account is a controlled and systematic approach to testing. That way you can pinpoint what’s working and what’s not. It will also grow your account while reaching customers in new ways and making the most of what the Advertising console has to offer.
Always give new campaigns ample time to collect data. We recommend running campaigns for a minimum of two weeks before making any judgments or major changes. I’m going to cover the main two campaign types in the following points.
6. ASIN Targeting
ASIN Targeting can be done for all three types of Amazon Ads (Sponsored Products, Sponsored Brands, Sponsored Display) but the best place to start is with Sponsored Products.
This gives you greater control over your product visibility and makes it easier for you to reach relevant shoppers as they browse detail pages and filter search results for specific products similar to yours.
In addition to ASIN targeting, sellers have the option of performing Category Targeting with Refinements. This strategy allows sellers to target an entire category of products, then refine them by specific product attributes such as price, brand, and star ratings. For example, sellers can target their competitors’ product(s) that are similar to theirs but have lower ratings.
When used correctly, Amazon product targeting ads can drive a huge amount of relevant traffic to your product listings.
7. Take Advantage of Sponsored Brands Ads
Sponsored Brands Ads boost brand awareness by appearing prominently in shopping results pages and showcasing your brand and product portfolio.
These ads feature your brand logo, a custom headline, and a selection of your products and send shoppers to their Amazon Stores page or a custom landing page on Amazon to help drive sales and product visibility.
With Sponsored Brands, there are three types of Ad Formats to choose from:
🎯 Product Collection: This ad format allows you to target up to three products in your brand. The ads send traffic directly to your Amazon storefront or a dedicated landing page featuring the products in your ad.
🎯 Store Spotlight: This ad format is only available to sellers with an Amazon storefront. Your Amazon storefront is like your very own eCommerce website but on Amazon. These ads are great for brands that sell products across categories. That’s because instead of promoting three specific products, you can promote three entire product categories and their store pages – all with just one ad.
🎯 Video ads: These highly popular video ads send traffic directly to the relevant product listing instead of your storefront or landing page.
Like Sponsored Products, Sponsored Brands ads are an important part of the marketing funnel. Sponsored Products are the foundation of your advertising strategy. They target the bottom of the funnel in the ‘purchase’ or ‘conversion’ stage. They drive customers directly to your product at the moment they’re intending to make a purchase.
Sponsored Brands, on the other hand, are higher up in the funnel in the ‘awareness’ and ‘consideration’ stages. They generate awareness of your brand by highlighting an entire brand via product carousels or videos rather than individual items.
These ads allow shoppers to discover your products which in turn will drive conversions as your prospect customer goes farther down the funnel.
A word on inventory management
It goes without saying that when you start scaling your Amazon Advertising you need to make sure that your inventory can handle the increased demand once your sales start to increase.
A well-optimized ad campaign will not only increase paid sales but organic sales as well. This increase on both sides can quickly drain inventory levels and leave you scrambling to replenish inventory.
Scaling your business on Amazon is no simple task. There are a lot of moving parts to consider and implement and requires a constant cycle of research, analysis, testing, tweaking, and monitoring.
I hope this post has helped you to determine if you’re ready to scale your Amazon Advertising and if you are, has given you some helpful tips to help you scale your campaigns.
Laura McCaul
Connect @ LinkedIn
📢 Co-founder of Sponsored Profit, an official Amazon Advertising Partner. She is an Amazon PPC, SEO and copywriting expert and has been helping FBA brands maximise their visibility and sales since 2016.
⚡ If you want to get the most out of your advertising dollars, download Sponsored Profit’s free Amazon ‘Ad-Ready’ Checklist here.
