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.

Outlines

00:00

📈 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.

05:00

📊 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.

Keywords

💡Amazon PPC

Amazon PPC stands for Amazon Pay-Per-Click, which is a type of advertising where sellers pay a fee each time a user clicks on their ad. This is central to the video's theme as it explains the basics of how Amazon's advertising system works, emphasizing the importance of understanding PPC for sellers looking to promote their products on the platform.

💡Impressions

Impressions refer to the number of times an ad is displayed or seen by potential buyers. In the context of the video, impressions are crucial as they indicate the visibility of an ad, but they do not guarantee clicks or sales, highlighting the difference between being seen and engaging the audience.

💡Bid

A bid in Amazon PPC is the maximum amount a seller is willing to pay each time a shopper clicks on their ad. The script explains that bids can vary widely, from as low as two cents to a much higher amount, and that they are a key component in determining ad visibility and cost.

💡Cost Per Click (CPC)

CPC stands for Cost Per Click, which is the actual amount a seller pays when a shopper clicks on their ad. The video emphasizes that CPC may not always be equal to the bid amount due to Amazon's ad auction system, which factors in ad relevancy and other variables.

💡Relevancy

Relevancy in the context of Amazon PPC means how well an ad matches what a shopper is looking for. The script mentions that Amazon prioritizes relevancy in its ad auction, ensuring that ads are useful and appealing to buyers, which in turn affects the success of PPC campaigns.

💡Keywords

Keywords are the specific words or phrases that sellers bid on to trigger their ads to appear in search results. The video distinguishes between keywords and search terms, noting that while keywords are chosen by sellers, search terms are what buyers actually type into Amazon's search bar.

💡Search Terms

Search terms are the actual queries entered by buyers in Amazon's search bar. The script explains that these may differ from the keywords that sellers bid on, especially with different match types like phrase match or broad match, which can lead to ads being shown for related but not exact search queries.

💡Advertising Cost of Sale (ACoS)

ACoS is a metric unique to Amazon PPC that represents the advertising cost of sale, calculated by dividing the total advertising spend by the number of sales generated. The video points out that understanding ACoS is vital for assessing the profitability of PPC campaigns.

💡Click-Through Rate (CTR)

CTR is the percentage of buyers who click on an ad after seeing it. The script uses CTR as an indicator of ad relevance, suggesting that a higher CTR means the ad is more appealing and relevant to potential buyers, which is a key performance metric in PPC advertising.

💡Conversion Rate (CVR)

CVR is the percentage of clicks that result in a sale. The video explains that CVR is an important metric for evaluating the effectiveness of an ad, as a higher conversion rate indicates that more people who click on the ad are actually purchasing the product.

💡Campaign Manager

Campaign Manager is the tool within Amazon's advertising platform where sellers can manage their PPC campaigns. The script mentions that certain metrics like impressions, clicks, average CPC, and ACoS are available in Campaign Manager, but not the conversion rate, which must be calculated separately.

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