Ever wondered what the difference between Amazon Advertising success and failure is?
When you manage thousands of PPC campaigns across multiple marketplaces, you start to notice patterns.
Broadly speaking, we believe the difference between those PPC campaigns that fly, and those that flop, comes down to 3 things, what we refer to as the 'three pillars of PPC':
This is probably the most critical of the three. Making sure that your numbers work is EVERYTHING.
For those of you that have completed our FREE PPC Self Audit, you know what I'm talking about. If you haven't, I highly recommend that you do. This training alone could save you a tonne of money and make a HUGE difference in the way you look at Amazon Advertising.
In short, your numbers come down to how much it costs to acquire a customer. Your profit margin and the level of competition in your category influence this greatly, and in turn, significantly affects how aggressive or conservative you can be with PPC.
Let’s talk budget and bids. Your PPC budget affects how long your ads are shown throughout the day, how much you are able to spend on a click, and how many of your products you can show ads for.
Your bids, on the other hand, are what make your ads competitive and determine whether your ads get shown or not.
Amazon PPC (Pay-Per-Click) is an auction-style system. When a customer performs a search for a product, the sellers with the highest bids on relevant keywords win the auction, and their ads get shown. The seller pays the bid price if their ad gets clicked (hence, “pay-per-click”) regardless of whether they make a sale or not.
So with all of this in mind, it is crucial to have sufficient cash in your business to invest in PPC. A general rule of thumb in business is that your marketing budget should represent approximately 10% of total revenue.
Many sellers are afraid to spend money on PPC. But it's important to think of PPC as an investment in your business, not as a cost.
I'm not saying you should spend money that you don’t have. However, you need to be willing to invest in your business if you want it to grow.
I'm pretty confident that no-one has made a million dollars in sales revenue on Amazon with a $10/day ad budget! So never let the impulse to save a few dollars today get in the way of the long term success of your business.
You have varying degrees of control over these pillars. For example, mindset and cash can be improved more easily than product/category.
How would you rate each of the 3 Amazon Advertising pillars in your business?
We would love to hear your thoughts on this topic! Leave them below in the comments.
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