Amazon PPC Basics Part 1 - Terms, Abbreviations and Definitions

Summary

This 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.