Demystifying Amazon Paid Search

The Amazon paid search program — which the company only rolled out last year in a bid to supplant Adwords — hasn’t attracted nearly as much attention as it deserves, even from major Amazon sellers.

This is Amazon’s up-to-date information page on their paid search program. You should go there in particular to see if your products are in an allowed category. They have been rapidly expanding availability for the program since inception, so even if your products aren’t in an allowed category yet, you should expect it to be ready to advertise soon.

There’s a lot of confusion about what the program is in part because it’s easy to mix up with Amazon Product Ads, which permit you to drive traffic to your website from Amazon.com. Those ads are much less relevant to Amazon sellers, but can still be an OK source of traffic.

It works a lot like a pared-down version of Adwords with far fewer options available to fine-tune campaigns. It’s poorly documented, and Amazon’s account managers will sometimes give you conflicting information about how the system works. Through trial and error, however, it’s possible to tease out how it functions.

It also happens to be the only way to drive more paid traffic all your listings on Amazon at costs per click that range between $0.01 to $2.00 or more at the time of this writing. This article is a quick and dirty way for you to set up your listing.

1. What the ad units look like

They look like this:

Amazon PPC ad unit skyscraper

They also sometimes show up in the footer. They’ll show how many reviews you have, the first 35-40 characters or so of your product title, your review count, your review average, the price plus discount, and whether or not it’s eligible for prime shipping.

2. How Amazon bills you

Amazon will bill you every time a prospect clicks on one of your ads. There are no CPA options. You bid on keywords relevant to your product, much like Adwords, but unlike the former, there are many more restrictions about what you can actually bid on.

3. Restrictions on keyword bidding

As mentioned in the last section, Amazon doesn’t let you bid on any term that you can think of. In order for your ads to garner impressions, the keywords that you bid on needs to be in either your title, your brand field, your search terms field, and the product description.

You can’t bid on competitor brands.

There will be no error messages when Amazon deems one of your keyword bids to be unacceptable. It’ll just not garner any impressions.

4. How to plan your Amazon paid search campaigns

There isn’t an equivalent to the Google Keyword Planner on Amazon, so you’re flying blind unless you use an external tool. The best one that I’ve found in that category is MerchantWords — the keyword volumes, while not entirely accurate, are good enough to work from, at least to compare relative volumes.

This tool should also inform the rest of your listing management. Amazon’s search engine is like a stupid but more effective version of Google, at least from a seller’s perspective. You will want to emphasize the keywords that match with your product that also convert well.

Each product has a limit of about 1,000 keywords. Be aggressive about adding new ones and culling nonperforming ones. You’ll often find that semi-relevant search terms can convert profitably, depending on what your margins are like.

5. Managing Amazon Paid Search

What you’ll want to do is to pay the most attention to your Average Cost of Sale that Amazon provides for each paid search keyword, along with the gross sales. The keywords which make up the bulk of your sales should be the area for the closest invetigation and bid management.

The estimated first page bid tool that Amazon provides — a recent addition — is only semi-accurate. You should pay closer attention to the bids that you actually pay.

There’s no visible version of quality score on Amazon, but expect that to change soon. Right now, it’s a good strategy to just focus on profits on each keyword rather than worrying about conversion percentages, because there are no obvious consequences to your account. Cycle keywords in and out, particularly if you can’t get impressions on some of them, or if they lose money.

6. How to use the data from paid search to dominate Amazon

The real reason to focus on using this new service is that it gives you more detailed keyword data than Seller Central would ordinarily give you. This tells you which keywords to emphasize in your title and product description. You can also use paid search — given that your product niche has enough search volume — to quickly test out promotions and discounts.

Due to the way that Amazon search works, this also tells you which keywords to focus on in your external link building campaigns to your listings. There would be few other reliable ways to get this data other than Adwords, and for many niches, the costs per click are much higher. Further, Amazon searchers behave rather differently compared to Google searchers — at least until Google further develops their ‘buy now’ button.

7. The likely future of Amazon PPC

I would expect Amazon to continue to roll out new features over the next two years. I wouldn’t be surprised if they add more scripting tools for bid management — right now, they’re woefully inadequate, especially for large advertisers.

They’ll probably introduce quality score features soon to improve relevance. I wouldn’t be surprised if they also started to provide some demographic targeting options, also, but Amazon user expectations might be more towards privacy than some other ad platforms.

Overall, though, it’s hard to predict. Compared to most other ‘serious’ advertising platforms, Amazon paid search is feature-poor, but rich in profit potential, especially as it’s still new, and many sellers haven’t taken advantage of it yet. As the ecosystem becomes more mature, I’d expect costs per click to skyrocket, much like we saw with Adwords.

From a consultant’s perspective, the Amazon PPC program provides an enormous advantage for Amazon sellers relative to companies without Amazon listings. This advantage may deplete as Adwords continues its shakeup, but until then, it’s the most effective paid traffic for the money that you can find on the internet. If your products are in an approved category, you should strongly consider cross-listing them on Amazon just to take advantage of this (no doubt temporary) state of affairs.