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If you are a Seller at Amazon If you want to create a Sponsored Product campaign, you will often be confronted with the question of which products and keywords you should include in which ad group. Unfortunately, there are no fixed guidelines that you can follow, as the optimal structure of your campaign depends on the size and homogeneity of your product range as well as your own goals. Nevertheless, there are a few aspects you should bear in mind, which I will outline below:

1. structure your campaigns consistently

As a rule, you can roughly structure your advertising activities through your Sponsored Product campaigns, which can be both an advantage and a disadvantage. In most cases, the structuring of the campaign is based on certain characteristics. You can structure them accordingly:

   By product category (e.g. men's shoes, keyboards, cameras, etc.)

   By brand (e.g. Nike, Adidas, Puma etc.)

   By top sellers (products that achieve the most sales, e.g. top 10)                      

However, it is important that you always ensure that you follow your structuring consistently so that there are no so-called repeat ads, which would be the case, for example, if you were to create one campaign based on the brand and the other campaign based on the product category.

2. group of similar products in the same ad group

A specific set of products and keywords is created for each ad group, whereby you should ensure that all products that match the respective keywords are inserted into a common group. After all, this is how the products should be found using the search.

With this method, however, you need to be careful when analyzing the profitability of your Amazon Ads, as the products in a common ad group can still differ in terms of their profit margin, which can have an impact on your profitability. Accordingly, before you start Amazon PPC optimization, you should understand what would be a suitable ACoS for your Amazon Ads.

3. create different advertising groups for keywords with different levels of generality

The larger your product selection, the more keywords with different specificity there are.

Example: A salesperson has a selection of shoes

  • The keyword "shoe" is relevant for all shoes
  • The keyword "men's shoes" is relevant for some of the shoes
  • The keyword "men's sneakers" is relevant for some men's shoes

If you were to insert the word "men's shoes" into all ad groups for men's sneakers, boots, low shoes, etc., you would quickly lose track of your ads and keywords. To prevent this, you should embed similar-sounding keywords in separate ad groups (e.g. "men's shoes", "shoes for men"). The products that are sold the most can be placed in the following groups accordingly.

Campaign 1: Men's shoes for product category 1

  • Advertising group 1 ("men's shoes") for general keywords in this product category ("shoes for men", "men's shoes" etc.) and top sellers
  • Advertising group 2 ("men's sneakers") for specific keywords ("sneakers for men", "men's tennis shoes", "men's joggers" etc.) and matching products
  • Advertising group 3 ("men's boots") for specific keywords ("men's boots", "hiking boots for men") and matching products

4. let Amazon search for relevant keywords for you in an automatic campaign

Run an automatic campaign and a manual campaign with the same products. Run the automatic campaign for a few days/weeks and then evaluate which search terms have generated the most sales. Then transfer the search terms to your manual campaign.

My recommendation:

  • Create an automatic campaign and ad group
  • Create a manual campaign and ad group
  • Evaluate the search terms of the automatic campaign ("Search terms report" in Seller Central) and transfer the relevant search terms to the keywords of your manual campaign with a higher CPC bid.

5. optimize your listings to ensure that the ads are displayed for all relevant search queries

Amazon wants to ensure that the ads displayed on its website are relevant to the customer. For this reason, ads can generally only be displayed for keywords that also appear in the text of the Product list (title, features, description, search terms). You should therefore check whether the text of your listings contains certain keywords that do not have any impressions and add the keywords to your text in order to reach a broader potential customer base.

6. eliminate unwanted search queries to reduce costs

Advertisements from Amazon are not always only displayed for the exact search terms that you have previously defined as a seller. Accordingly, the search queries may differ from the keywords, even though you have included them in a common group. You have a total of two options to choose from to avoid unnecessary costs:

  • Determine match types
  • Determine negative keywords

If you enter keywords for your sponsored products, Amazon will give you three different match types to choose from:

  • Broad match: the search term contains all components of the keyword, regardless of the order. Furthermore, spelling variations, spelling mistakes and synonyms are considered matches.
  • Phrase match: The search term contains all components of the keyword in the same order. Similar variations (e.g. singular / plural) are considered matches.
  • Exact match: The search term matches the keyword word for word (same order and same components). Plural and singular are also considered exact matches here.

Negative keywords

Amazon also offers so-called negative keywords, which mean that your ad is not displayed for certain search queries that contain these negative keywords. You can choose between two different match types:

  • Negative Exact: Your Sponsored Product ad will only be excluded if the search query completely matches the negative keyword or only has a small variation, such as singular/plural.
  • Negative phrase: Your ad will be excluded if the search query contains part or all of the keyword.

7. track your PPC spend based on product performance

In most cases, there are many different products in an ad group that share the same keyword and after some time you will know which products sell best within an ad group. In order to achieve the maximum number of sales within a group, you have the option of removing products that can only perform poorly from the respective group. This allows you to direct attention and clicks to the products that are more likely to convert clicks into purchases. Furthermore, by adjusting the CPC bid price, you can determine where (on which page) your ad will appear in the search results and how many clicks it will receive. The goal of CPC optimization is to reach the sweet spot, a kind of effective zone where ad spend and revenue (spend / revenue = cost of sales) reach a desirable level.

8. define your target in terms of average cost of sales (ACoS)

You should be very general in your target costs in terms of sales, as these can vary depending on the purpose of each campaign. If you are primarily looking to make a profit, then your target figure should be based on your profit margin, with target cost of sales figures typically ranging from 5 - 15 %. However, if you are promoting a new product and want to improve your organic visibility, then you may need to budget more for your sales or perhaps even take a short-term loss in order to secure long-term profit. In this case, your target cost of sales would increase to 100 %.

9. track and optimize your CPC offer

The optimal CPC bid differs slightly from keyword to keyword, which is why each bid can be controlled separately for each keyword in the manual campaigns. Note, however, that you need a fixed amount of data as a basis for evaluating bids, which is why you should allow at least one week between bid price adjustments. The general rule of thumb for CPC bid optimization is:

  • If the sales costs for a keyword are above the target value, you should lower the bid to test whether advertising expenditure and sales can be brought into a desirable relationship.
  • if the sales costs are below the target value, you should test whether the ad reach and sales can be increased by increasing the offer price
  • If the keywords do not generate any sales or receive too few impressions, you should check whether they can be activated if the bid is increased.
  • Keywords that only cause costs and do not receive any conversions over a longer period of time should be eliminated

In general, you should regularly update your campaigns in this way in order to reach the so-called "sweet spot".

10 Start offering new keywords with a higher price

When you add a new keyword, you should first set a higher CPC bid price (at least by 0.75$, depending on the category) to generate clicks and impressions with these new keywords, as they do not yet have a click history at the beginning. As soon as a click history has been built up, you can lower the bid price again in order to be able to offer an optimal price.

Tobias Dziuba

My name is Tobias and I am the founder and managing director of the Amazon agency Adsmasters GmbH based in Düsseldorf.

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