How to Set up Amazon PPC Campaigns: Pro Tips + Mistakes to Avoid

Amazon PPC campaigns allow sellers to advertise their products on the most popular ecommerce platform on the planet. Learn how to set up your campaign, expert tips to thrive, and mistakes to avoid.

Amazon advertising has been growing at a faster rate than Google Ads or Meta Ads — reaching $49 billion in global ad revenue in 2023 alone.

In other words, ecommerce businesses everywhere are investing more advertising dollars toward Amazon PPC campaigns.

Below, HawkSEM’s expert search engine marketing manager Melissa Torre walks us through the basics of setting up a solid campaign, what mistakes to avoid, and her advanced tips for Amazon PPC campaign success.

What are Amazon PPC campaigns?

Amazon PPC campaigns are how ecommerce sellers advertise their products on Amazon.

Ads appear when people search for relevant products, which helps gain visibility in the highly competitive marketplace.

And like all pay-per-click ads, Amazon PPC is a relatively quick way to increase traffic to your Amazon store — and you don’t pay a penny until someone clicks on your ad.

Types of Amazon PPC ads

There are three campaign types for Amazon PPC ads:

1. Sponsored product ads

Product ads are used to promote specific products and appear in relevant organic search results and product pages.

Once clicked, the shoppers land on the product page. These are the ads we typically recommend advertisers begin with and primarily focus on.

2. Sponsored brand ads

Brand ads, also known as headline ads, help build brand awareness and sales by allowing sellers to showcase multiple products in one ad.

It contains your brand logo, product images, and custom headline, and takes shoppers to your brand’s store (or group of products the ad promotes).

These ads appear at the very top (headline) of specific categories:

3. Sponsored display ads

Display ads engage shoppers interested in certain categories related to your product, or shoppers that viewed your product without making a purchase.

You can also use “product targeting” to target specific categories or products similar to yours.

But which type of PPC ads should Amazon sellers use and why? Torre offers advice to those with registered brands on Amazon:

“Headline image ads, manual sponsored products, and video ads can demonstrate authority, helping you gain the customer’s trust,” says Torre.

“Some marketers use them only for branded terms, but to have a robust account, landing on the front page by using top-performing product keywords and multiple ad types is extremely effective.”

It makes perfect sense — the more someone sees a product or brand, the more familiar they become, and the higher trust builds.

Torre also states that, although Sponsored Product category ads don’t convert well, they’re an excellent higher-funnel branding tactic in a lower-funnel platform like Amazon.

For instance, if you target a painting category for your painter’s tape product, you can drive shoppers to your listing fast (before they even know they’ll need your item). Plus, it builds brand recognition.

Amazon keyword match types

There are three keyword match types available for Amazon PPC campaigns:

• Broad match
• Phrase match
• Exact match

Here’s a simple breakdown of each:

Broad match allows advertisers to target any combination of words for a keyword. For example, your “paint roller” ads will appear for both “paint rollers” and “rollers for painting.”

Or it can replace terms like “paint” with “pigment” and “roller” with “brush.”

Broad matches are generally best suited for low-competition keywords with little search volume.

Phrase match allows advertisers to target keywords that appear in any order and with various synonyms, prefixes, and suffixes. For example, your “girl dresses” ads can appear for both “summer girl dresses” and “girl dresses for weddings.”

Exact match requires that all words be exactly matched with your targeted keyword.

When it comes to selecting keywords for your campaigns, you can choose manual targeting or automatic targeting.

With the manual option, you’re selecting the keywords to bid on for your ads. Automatic campaigns use Amazon’s algorithm to select keywords relevant to your product listing.

It gathers data over time, such as shopper clicks and purchases, to determine the best keywords to boost conversions.

How to set up your Amazon PPC campaign

To get started with your campaign, select the product(s) from your store that you want to advertise. Make sure these product listings include high-quality images and lots of product descriptions and benefits — not just features.

Then, make sure you’ve done enough keyword research to determine high-search, low-competition phrases relevant to your products and brand.

From there:

1. Sign in to your Seller Central account
2. Go to the “Advertising” tab, click “Campaign Manager,” then select “Create campaign”
3. Select between Amazon Sponsored Products, Display, or Brands campaign
4. Name your campaign and set start and end dates
5. Select a daily budget
6. Decide whether you want to use manual or automatic targeting (Automatic means Amazon will choose keywords based on your product, whereas manual bidding means you pick the keywords)
7. If you choose manual targeting, upload your keywords (you can add up to 1,000, but aim for a few dozen)
8. Set your bids
9. Choose the product(s) you want the ad to promote from your inventory
10. “Launch” your campaign
11. Optimize your product ads using the keywords selected by adding the terms to your title, description, and features

Expert tips for running successful Amazon PPC campaigns

We covered the basics of setting up an Amazon PPC campaign, but Torre shares with us her expert tips for making those campaigns successful:

1. Start with manual campaigns

Automatic targeting campaigns are helpful, but it’s best practice to kick off Amazon PPC with manual campaigns.

“I always start with manual targeting, starting small and adjusting weekly to ensure I’ve gathered enough data to make an adjustment decision,” says Torre.

“Then for prospecting campaigns, I bid up ‘Top of Page’ significantly to capture interest.”

Why does this work? Because most shoppers never make it halfway down the page, let alone the second page.

It has a lot to do with decision overload — shoppers want to find what they need fast and can’t do that when they have too many choices.

“I like only appearing at the top page with some of my listings,” she adds. “So I may bid a $0.25 keyword level bid, then raise Top of Page bidding 500% for a total bid of $1.25 — but only for Top of Page.”

2. Set up automated campaigns after

“As long as your listings are optimized,” Torre explains, “allowing the Amazon algorithm to search for keywords that convert while you’re testing manual campaigns helps your overall advertising strategy.”

3. Use broad match campaigns with low CPCs to accomplish similar results

Both automated campaigns and broad match campaigns with low CPCs consider your listing’s headlines, bullet points, and backend keywords when finding searches for ad placement.

“Once you find consistent results, add those search terms to your manual campaigns for more control, then remove them from the auto campaigns,” Torre adds.

4. Don’t optimize listings too soon

Yes, it’s important to optimize your Amazon ads. But not before you do anything else with your campaign.

“This tends to be overlooked as people start up a PPC campaign,” says Torre. “They expect to dominate the first page and boost their listing to the top of the page organically.”

The truth is, Amazon’s algorithm looks at multiple factors when deciding where your listing quality score, such as your:

• Clickthrough rate
• Conversion rate
• User experience

If your listing is missing images, information, or relevant keywords, then shoppers will likely go on to another listing. So why would Amazon take chances with placing a product listing that won’t get clicks?

“No amount of PPC spend can help a listing that isn’t optimized. It can even hurt a seller’s chances of ever taking the first page organically,” says Torre.

This is why we spend a lot of time optimizing our clients’ listings. For example, we have a client that sells auto parts. Normally, we’d run terms for those parts using product-specific keywords like materials, features, and make and model of the vehicle.

However, we tested a few short two-word broad match Sponsored Product campaigns using make and product type, like “F-150 shocks.” The ad performance for those campaigns ended up being incredibly successful, which gave us direction going forward.

We still had to be cautious of irrelevant terms, but thankfully the algorithm did an excellent job of optimizing the listings using strong terms (similar to an auto campaign). So the results were outstanding.

5. Use data from other PPC platforms to guide keyword research

If you run PPC ads on other platforms (like Google, Bing, or Facebook), use this data to identify search trends and find keywords to use in Amazon listings.

Another option is to use tools like ConversionIQ, HawSEM’s proprietary software, to find low-competition keywords faster.

And identify your top customers (and their keywords) to create highly targeted ad campaigns that maximize clicks and conversions.

Setting up auto campaigns can also aid in finding keyword ideas for your ads.

When looking through your Search Ads data, ignore intent terms like “near me” or “buy.” These terms are relatively useless on Amazon since it’s assumed shoppers are there to find and purchase products.

“Instead, describe your products using colors, sizes, types, user terms, and strongly searched features (e.g., adjustable) to get clicks from shoppers who are ready to buy now,” adds Torre.

6. Build product pages with user experience in mind

Your ads are only the first touch point with a customer. The next step is the landing page (aka your product description page). So making your product pages attractive and helpful is critical.

It’s what makes the user experience great and potentially converts clickers into buyers. Plus, the longer someone stays on your listing shows Amazon’s algorithm your listing is worth ranking in search results.

If you have a registered brand on Amazon, consider using their templates to set up your product page. Make sure to add:

• High-quality product images
• Product and seller information
• Social proof (in the form of ratings and reviews)

If you have multiple options for an item, create a Variations Listing to showcase other options. This reduces the need to visit multiple listings (improving the customer experience). And increases the odds of customers adding several items to their cart (increasing your revenue).

Mistakes to avoid with Amazon ad campaigns

Beginners and experienced marketers alike can make some mistakes when setting up Amazon ads. Here are the most common issues we’ve noticed:

1. Long keyword lists for a single ad group

Pinpointing the best keywords to include in each ad group isn’t always simple. As a result, some will build a long list — sometimes with hundreds of keywords — for a single ad group.

Here’s the problem:

“This keeps us from finding what works and what doesn’t,” says Torre. “Splitting ad groups by 20 or fewer keywords is ideal.”

Fine-tune your keyword list now (including negative keywords) and save yourself from going through mounds of data with a fine-tooth comb later.

Pro tip: There are a number of keyword research tools available to aid in this process. Check out things like Semrush, Moz, Spyfu, and Ahrefs to get started. Bonus: these are also great for SEO.

2. Running ads on branded terms only

“Brands will always dominate — and Amazon will always prioritize — branded search terms because it delivers easy results,” Torre explains.

“Unfortunately, it will also falsely inflate the ROAS/ACOS.” In other words, this strategy will make the agency or campaign manager look great “but it won’t add much to the bottom line,” warns Torre.

Make sure you’re running campaigns for non-branded keywords to balance your campaign results and boost your revenue potential.

Pro tip: Amazon PPC is now experimenting with image generation for sponsored brands. Check out how you can leverage AI to create brand-themed product images using your product information.

3. Relying on automated campaigns (when listings are poorly optimized)

Optimizing your sponsored product listings takes time and effort to get results. But as a seller, time isn’t always on your side. However, automating keyword targeting isn’t the answer here.

While it may help optimize your ads for better results, you don’t want to rely on bots to run your campaigns full-time (or at all) if the listing is poorly optimized.

If your listing only has a few strong keywords, then the auto campaign will struggle to find new customer search terms to target.

Benchmarks for PPC campaigns on Amazon

What makes an Amazon PPC campaign a success?

One metric to review is the advertising cost of sale (ACOS), which is the percentage of revenue generated by a campaign that’s spent on advertising. Calculating this determines the profitability of your ads.

To calculate, use this formula:

ACOS = total ad spend / total ad revenue x 100

For example, if your PPC ad campaign generates $500 in sales and costs you $50, then it’ll look like this:

$50 / $500 x 100 = 10% ACOS

This means you spend 10% of your sales on advertising, which is helpful for calculating your budget when increasing or decreasing your ad expenses.

Pro tip: To ensure you’re on the right track, keep your target ACOS below 33% and conversion rates at 8% or higher.

The takeaway

Growing an ecommerce store on Amazon can be successful, but only when your marketing strategy is on point.

By using pay-per-click ads, you can increase your visibility, traffic, and sales faster. However, if you make common mistakes or avoid employing strategies that work, the results will be lackluster.

So use this guide to inform your future Amazon PPC campaigns. If you continue to struggle or lack time to improve your PPC efforts, then consider enlisting the help of an Amazon PPC agency.

Otherwise, it’s time to put your products in front of prospective buyers with the help of PPC. Let’s get it.

This article has been updated and was originally published in November 2022.