Amazon PPC Basics Part 1 - Terms, Abbreviations and Definitions
Summary
TLDRThis video script offers a foundational guide to Amazon PPC, explaining key terms and concepts. It covers pay-per-click advertising, impressions, bids, cost per click (CPC), and the importance of relevancy in Amazon's ad auction. The script also distinguishes between keywords and search terms, introduces advertising cost of sale (ACoS), click-through rate (CTR), and conversion rate (CVR), providing a basic understanding essential for effective Amazon advertising strategies.
Takeaways
- 😀 Amazon PPC stands for Pay-Per-Click, meaning you only pay for advertising when a shopper clicks on your sponsored product.
- 🔍 Impressions refer to the number of times your ad is seen by a buyer, which is different from clicks where the buyer engages with the ad.
- 💰 Bids are the amount you are willing to pay for each click on your ad, but this isn't necessarily the amount you'll be charged due to Amazon's ad auction system.
- 📉 CPC, or Cost Per Click, is the actual amount you pay when someone clicks on your ad, influenced by bidding and Amazon's focus on ad relevancy.
- 🔑 Keywords are specific words or phrases you bid on in your campaigns, which can be controlled directly in Manual campaigns but not in Auto campaigns.
- 🔎 Search terms are the actual terms buyers type into search, which may differ from the keywords you bid on, especially with phrase or broad match types.
- 🛒 ACoS, or Advertising Cost of Sale, is unique to Amazon as it tracks which keywords convert to sales, providing a metric for ad effectiveness.
- 📊 CTR, or Click-Through Rate, is a percentage calculated by dividing clicks by impressions, indicating how engaging your ad is to buyers.
- 🛍️ CR, or Conversion Rate, measures the percentage of clicks that result in a sale, calculated by dividing orders by clicks, and is crucial for assessing ad performance.
- 📈 Understanding these metrics is fundamental for optimizing Amazon PPC campaigns, as they provide insights into ad performance and sales generation.
Q & A
What does PPC stand for in the context of Amazon advertising?
-PPC stands for Pay-Per-Click, which means you only pay for advertising when a shopper clicks on your sponsored product.
What is an impression in Amazon PPC?
-An impression is the number of times your ad is seen by a buyer. It occurs when a shopper scrolls past your ad or sees it in a search result or on a product page.
What does a bid represent in Amazon PPC?
-A bid is the amount you indicate to Amazon that you are willing to pay for each click on your ad within your sponsored products campaign.
What is the lowest bid amount one can set in Amazon PPC for sponsored products?
-The lowest bid amount one can set in Amazon PPC for sponsored products is two cents.
What is the difference between a bid and the actual cost per click (CPC) in Amazon PPC?
-The bid is the maximum amount you're willing to pay per click, while the actual CPC is the amount you are charged when someone clicks on your ad, which may be less due to Amazon's ad auction system focused on relevancy.
Why does Amazon prioritize relevancy in its ad auction system?
-Amazon prioritizes relevancy to ensure that buyers see products they are interested in, maintaining a streamlined shopping experience and avoiding clutter on their platform.
What are keywords in Amazon PPC, and how do they differ from search terms?
-Keywords are the specific words or phrases you bid on in your campaigns. Search terms are the actual terms that buyers type into the search bar. While they can be the same, they are not always interchangeable, especially with different match types like phrase match or broad match.
What is the significance of the Advertising Cost of Sale (ACoS) in Amazon PPC?
-ACoS represents the advertising cost of sale and is calculated by dividing the amount spent on advertising by the number of sales accrued through that spend. It's unique to Amazon PPC as it directly tracks keyword conversions to sales.
What is the Click-Through Rate (CTR) and how is it calculated?
-The Click-Through Rate (CTR) is a percentage that represents how many buyers who saw your ad clicked on it. It is calculated by dividing the number of clicks by the number of impressions.
How is the Conversion Rate (CVR) defined and why is it important?
-The Conversion Rate (CVR) is the percentage of people who clicked on your ad and then purchased the product. It is important because it indicates the effectiveness of your ad in generating sales.
Why might a high Conversion Rate (CVR) lead to lower ACoS?
-A high Conversion Rate (CVR) means more sales are generated from clicks, which can lead to a lower ACoS as the advertising cost is spread over a larger number of sales.
Outlines
📈 Understanding Amazon PPC Basics
The first paragraph introduces the concept of Amazon PPC (Pay-Per-Click) advertising, explaining that it involves paying only when a shopper clicks on a sponsored ad. It covers the fundamental terms and definitions such as 'impressions', which is the number of times an ad is seen, and 'bids', the amount a seller is willing to pay for each click. The paragraph also discusses the cost per click (CPC), which is the actual amount paid when an ad is clicked, and how Amazon's ad auction prioritizes relevancy over the highest bid. Additionally, it touches on the difference between 'keywords', which are the terms bid on, and 'search terms', which are the actual terms buyers use in their searches.
📊 Key Metrics in Amazon PPC Advertising
The second paragraph delves into key performance metrics for Amazon PPC campaigns, starting with the 'Advertising Cost of Sale' (A COS), which is a measure of how much is spent on advertising divided by the number of sales generated from that spend. It then explains the 'Click-Through Rate' (CTR), which is the percentage of buyers who clicked on the ad after seeing it, indicating the ad's relevance to buyers. The 'Conversion Rate' (CVR) is also discussed, which is the percentage of clicks that result in a sale, highlighting its importance for assessing the effectiveness of ad campaigns. The paragraph notes that while metrics like impressions, clicks, average CPC, and A COS are available in Amazon's campaign manager, the conversion rate must be calculated manually but is crucial for evaluating campaign success.
Mindmap
Keywords
💡Amazon PPC
💡Impressions
💡Bid
💡Cost Per Click (CPC)
💡Relevancy
💡Keywords
💡Search Terms
💡Advertising Cost of Sale (ACoS)
💡Click-Through Rate (CTR)
💡Conversion Rate (CVR)
💡Campaign Manager
Highlights
Amazon PPC is explained as pay-per-click advertising where you only pay when a shopper clicks on your sponsored ad.
Impressions are the number of times your ad is seen by a buyer, which is different from clicks.
Bids represent the amount you are willing to pay for each click on your ad.
Cost per click (CPC) is the actual amount you pay when someone clicks on your ad, which may differ from your bid.
Amazon ad auction prioritizes relevancy over the highest bid to ensure a streamlined shopping experience.
Keywords are the specific terms you bid on in your campaigns, while search terms are what buyers actually type into search.
Exact match types for keywords cover plurals and prepositions, which may be further explained in a later video.
Advertising Cost of Sale (ACoS) is a metric unique to Amazon, measuring the cost of advertising divided by sales accrued through that spend.
Click-Through Rate (CTR) is a percentage that gauges how relevant buyers find your ad based on clicks divided by impressions.
Conversion Rate (CVR) measures the percentage of people who clicked and then bought the product, indicating sales effectiveness.
Metrics like impressions, clicks, average CPC, ACoS, and CTR are visible in the campaign manager, but conversion rate is not.
Conversion rate is crucial for assessing the efficiency of your ad in generating sales and controlling advertising costs.
A high conversion rate generally means more sales at a lower cost per acquisition.
The video promises a more in-depth look at these metrics in future videos for a comprehensive understanding.
The importance of bidding on relevant keywords for better cost per click and a streamlined shopping experience is emphasized.
The video aims to provide a firm foundation on Amazon PPC terms and definitions for beginners to understand high-level concepts.
The transcript is a guide for those interested in Amazon PPC, offering a basic overview of key terms and metrics.
Transcripts
today we're going over Amazon PPC turns
definitions and abbreviations
[Music]
all right today we are going through
Amazon terms abbreviations and
definitions this is going to be helpful
to give you a very firm foundation in
the basics so you can branch out and
understand more high-level concepts if
you are interested in seeing more of
these videos make sure you subscribe
click the Bella notification so you
don't miss any of these first off Amazon
PPC what is PPC mean PB c stands for
pay-per-click pay-per-click advertising
platforms means you do not pay for your
advertising unless a shopper browser
whoever clicks on your product there are
other platforms out there pay per
impression there are some segments of
Amazon advertising that our paper
impressions however we are talking
Amazon PPC you're talking pay-per-click
so you are only paying when someone
clicks on your sponsored ad the next
definition we're going through is
impressions this is the number of times
your ad is seen by a buyer you can bid
on a keyword but unless a shoppers
winning shopper Scrolls past your ad or
sees it in headline or on a product page
that's when an impressionist clicks
pretty self-explanatory when a buyer
clicks on your ad bids this is how much
you indicate to Amazon you are willing
to pay for each click you can in
sponsored products your bid can be as
low as two cents that's a lowest you can
go most likely two cents you're not
going to show up you can put a two that
bit you can put an astronomical bet if
you like but that is what you have said
that I am willing to pay for this
particular keyword now you have bids and
then you have your cost per click which
you will see abbreviated oftentimes as
CPC your cost per click is what you
actually pay when someone clicks on your
ads just because you produce it in bid
does not mean you are essentially going
to pay that bit now if you're putting a
really high
you want to be willing to pay that
however that doesn't mean you're always
going to get charged that Amazon ad
auction is a little bit of a segue it's
not always the highest bid that wins
Amazon is super focused on relevancy
they want to show things to their buyers
that their buyers want to see um that's
why when you go look up shampoo you're
not going to see a bunch of dog collars
they want their platform to various
streamlines and they don't want a bunch
of mess so that's another segue you bid
on relevant keywords you're gonna most
likely see a better cost per click
however so you have your bid and then
you have the cost per click another two
definitions that are somewhat related
but they're not necessarily
interchangeable so the first one is
keywords these are the words or phrases
that you bid on in your campaigns now
with Auto campaign you do not
necessarily get direct control over what
keywords your bidding on you do have the
for targeting types I will be going over
automatic campaigns in another video
however um Maino campaigns you have
specific keywords or phrases that you
are bidding on now you have your
keywords and you have your search terms
and those are not necessarily
interchangeable the keyword is the bid
the term that you are bidding on the
search term is the actual term that
buyers type into search now you can have
a keyword that is exactly the same as
the search term but that's not
necessarily always going to be the case
if you have a phrase match or broad
match those may pull different search
terms in the actual keyword not a lot of
people know exact is not always mean
necessarily exact exact also cover
plurals and they also cover prepositions
that's something I'll get into you in a
later video the exact match types for
keywords but when you need to know now
is that keywords and search terms two
separate things a cost and very
one on Amazon Amazon is very specific
and a cost you will only see on the
Amazon PPC platform the reason for this
is because when you are on bidding or
doing advertising on Amazon they have
direct knowledge over which keywords are
converting to sales if you're doing say
off platform advertising that's not
always so cut and dry but with the
Amazon platform that's very unique that
they are a hundred percent can track
which keywords and which terms are
converting so you will get the a tossed
a cost excuse me and that stands for
advertising cost of sale and this is
calculated by how much you spent and you
divide it by how many sales were accrued
through that spend and another thing
we'll do a whole video just specifically
on a cost so that's an important one but
that is the definition for that term
another one you'll see is the
click-through rate abbreviated CTR and
this is a percentage of buyers who saw
your ad and clicked on it and you
calculate this um you take your clicks
and you divide it by your impressions
click-through rate is a good way to
gauge how relevant buyers find your your
ad that you're running so that keyword
if you look at the click-through rate
you can see what percentage of people
who saw your ad clicked and you can get
some good metrics there again we'll go
through all this really in-depth this is
a basic overview so you understand each
of the terms um another big one the last
one is your conversion rate abbreviated
CV R and this is okay so you have your
impressions how many people saw then you
have your clicks how many people clicked
and then conversion rate is how many
people who clicked bought the product
conversion rate is very important
that's how conversions are your sales so
when you're looking at conversion rate
that's the percentage and you take your
orders and you divide it by clicks now a
lot of these other ones the impressions
the clicks your average cost per click
you're the a cost the click-through rate
those ones are shown in campaign manager
as metrics I'm not really sure why
Amazon does not give you your conversion
rate you cannot see that in campaign
manager as one of the metrics in the
dashboard however it's pretty easy to
calculate you just select date ranges
say how many orders divide the clicks
but that is a good metric to look at
because if you have a good conversion
rate that means you're getting more
sales off of your clicks generally
speaking you'll be spending less for
more sales that are a costs so that is
one to watch for sure especially with
ranking but we will go over all these
more in depth Lee I just wanted a basic
overview and to give you a really firm
foundation on each of the terms and
definitions
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