5 Amazon PPC Advertising Misconceptions

Many brands want to understand: what is Bobsled’s ‘secret sauce’ when it comes to Amazon PPC? We’ve been recognized by Business Insider as one of the top Amazon firms, our PPC work has been featured on the Amazon Advertising blog, and we recently made the Inc. 5000 list. All of these credentials are a direct result from our world-class Amazon PPC management service.

There is a lot of misinformation regarding the best way to manage your Amazon PPC performance. Believing the wrong things can cause untold amounts of damage to your brand’s Amazon presence.

Bobsled’s Matteo Bizon has shared 5 common Amazon PPC misconceptions below. Getting clear on these issues will simplify advertising strategy, and provide you with more clarity about what is and isn’t working within your ad dashboard.

Misconception #1 - Success is immediate

Many Amazon sellers and vendors believe that PPC advertising is a simple and easy turnkey solution that leads to immediate success. Unfortunately, this is far from the truth. Creating a successful advertising strategy takes time and sustained effort.

The first step is to optimize your product display pages (PDPs) for conversion. Every PDP needs to have effective titles, descriptions, bullet points, and images. There is no point sending paid traffic to PDPs if they have not been designed to convert browsing shoppers!

Secondly, the products need to be advertising and retail-ready. This means they have at least some degree of social proof in terms of customer ratings and reviews. Your PPC advertising strategy should be aligned with the discounts or promotions that are typically utilized to help generate the initial sales and reviews.

Lastly, you need to spend time preparing a strategy and structure for your ads, perform in-depth keyword research, and create cost projections to figure out your ultimate profit margins. All of these steps require access to the right resources, especially with respect to data acquisition, such as third-party marketplace ad tech tools that improve the efficiency of your PPC spend. 

💡Check out Marketplace Ad Tech: How Does It Work?

Misconception #2 - It’s possible to ‘set and forget’ your Amazon PPC

Another common misconception is related to the amount of work that is required to maintain a healthy and successful advertising account. Whilst implementing a clear and optimized campaign structure is fundamental for future successes, it’s certainly not the only activity that needs to be carried out to achieve good results. Assessing the account often and keeping an eye on the evolution of the main KPIs is of paramount importance to avoid declining account performance. 

Recently, one of Bobsled’s clients ran into the following issue: their account was performing well overall with a stable ACoS of 14.8%, but it was evident that it had entered a decreasing trend in terms of sales. Our specialists analyzed both the account and the category at large. They found out that the whole category’s search volume had decreased by as much as -25% for some keywords as a result of both seasonality and the post-Covid reopening of brick-and-mortar businesses.

From there, the Bobsled specialists began to bid even more aggressively on the most profitable keywords. Also, they increased the budget dedicated to product-targeted campaigns to reach shoppers browsing for similar or related products in an effort to counter the decreasing trend of search volumes.

The result? As anticipated, the increased bids led to a slight increase in ACoS (15.8% from 14.8%), but importantly the volume of sales returned to the previous level prior to the dip. This normalization would not have occurred if we had not been paying close attention to performance fluctuations within the account.

Misconception #3 - Daily tweaks are necessary

Amazon PPC is a game that involves imperfect information, meaning that we always need to wait until we gather sufficient data before taking meaningful action. Patience is an absolute necessity!

We have witnessed advertisers who – prior to working with Bobsled – were making changes to bids and budgets within their accounts on a daily basis. This is a detrimental approach because you aren’t allowing enough time to pass by and therefore no meaningful data is gathered. Since we do not have direct insights on the ideal settings of a campaign before we test it, the longer you run ads with certain bids, budgets, and targeting options, the more information you will gather on the situation. This way you will be able to determine what is the most appropriate bid for a certain keyword.

Here’s another example from a Bobsled client. Prior to engaging Bobsled, this client was utilizing bid optimization that was carried out daily through automation software, which resulted in poor performance and the inability to understand what was working and what was not. After deactivating the automation, we were able to optimize the account in such a way that ACoS dropped from 36.5% to 19.5% over a period of three weeks. The optimization was carried out at regular intervals with enough time between for performance to settle and show us what was happening in the market.

Note: the only time where it is necessary to make daily adjustments to your PPC campaigns are during high traffic events such as Prime Day or ‘Turkey 5’ (the five-day period from Thanksgiving to Cyber Monday which includes Black Friday). Of course, during these events, you are still dealing with imperfect information, but you can observe trends in the market (e.g. competitor bidding high to own all the Page 1 real estate, competitor facing a stock-out situation for a crucial SKU, etc) and make informed tweaks on the fly. Sitting on your hands and not adjusting your PPC strategy during these high traffic periods can cost you thousands in lost revenue.

💡Check out How much should I spend on Amazon PPC? [2021 Update]

Misconception #4 - You need to diligently follow Amazon’s bid suggestions

One may assume that Amazon’s algorithm within the advertising console will always propose the best bid when setting up targeting options. In reality, it’s very common to see that many keywords or product targets perform extremely well with a very different bid from what is being suggested by Amazon itself.

The final CPC value is dependent on several factors, such as the bid strength, but also on the relevancy of our listing to that keyword and the expected CTR. Consequently, Amazon’s recommendation is simply that – a recommendation. Setting up your bids exactly as Amazon suggests will likely result in an overspend and an unnecessary waste of resources.

The correct process is variable and depends entirely on the goal of a campaign. If the goal is to ramp up advertising efforts and gather information as soon as possible, it’s prudent to start with a high initial bid, gather the data and optimize based on it. Alternatively, if you don’t mind taking the long road and want to avoid any chance of overspending, it’s advisable to start with a lower bid and increase it at regular intervals if no impressions are received.

Misconception #5 - I don’t need to advertise on my brand’s products or keywords

Many advertisers wonder why they should be targeting their own products or branded keywords when they are already appearing organically for them. They look at these campaigns as unnecessary, and that the spend that could be better utilized by directing those resources to non-branded search terms to expand the customer base.

To a certain extent, this might be true. At the same time, you need to consider that your competitors are trying to acquire more visibility, and would like to reduce your market share to their advantage. This is why they will be bidding on your keywords and will end up appearing for your branded search terms, leading to the possibility of visitors not clicking on your organic listing but on their paid ad. An additional concern is the fact that more and more search results are represented by paid placements and on some occasions all the above-the-fold results might be paid ads, reducing your organic listings’ visibility down to zero.

Before engaging our services, a Bobsled client was using branded Sponsored Products campaigns but did not have any active branded Sponsored Brands campaigns. This meant that the first placement in the search results always belonged to a competitor even if the visitor was searching for our client’s branded terms.

The results of implementing the aforementioned campaign were twofold. On the one hand, the account was able to maintain a consistent 9.5% ACoS. Also, the campaign served 13,000 impressions over a period of 30 days. This is the number of times that we avoided giving visibility to competitors’ products – a huge win!