How To Budget For Amazon PPC

If you sell on Amazon, you should already know that you need to find ways to beat your competitors. One popular approach is through Amazon Pay Per Click advertising (PPC). Running a PPC campaign can help increase product sales, win more clicks and give your organic placements a much-needed boost.

Yes, PPC is something that anyone serious about business needs to use but before you splash out on ads, you need to think strategically about how much money to use for your budget and where to spend it.

Every seller is different so there is no ‘one-size-fits-all’ nor can you anticipate overnight results, however, there are a few rules of thumb worth knowing to help with your PPC campaign to increase the chances of making it successful.

Where should I spend my PPC budget?

There are three main options where you can spend your budget, with each one giving you different results. These are-

Sponsored Products
Sponsored Brands
Display Ads.

Each one comes with their pros and cons, so it’s matter of planning ahead and figuring out which works best for your product. Most brands however tend to spend their budget like this-

75% on Sponsored Products

Sponsored Products offer the biggest volume for click-through rates (CTR) which means there is a greater chance of seeing a return on your PPC budget. Sponsored Products also give you some useful quality data which can be utilised for your future campaigns and make them more successful.

20% on Sponsored Brands

If you plan to have your products pop up at the top of Amazon’s search results page then this is ideal. Each time a consumer clicks on a sponsored post, they go straight to your product listing or your store page.

5% on Sponsored Display

Sponsored Display ads will promote your products to consumers who may have already viewed your products or ogled at similar products on Amazon.

So you can see each type of Sponsored Ad yields different results and how much you spend is based on what you hope to achieve. Sponsored Brand Ads are great for brand awareness but if you use Sponsored Display, shopaholics will be recommended your product as its similar to something they already looked at. If the shopper is searching for a product that you have then Sponsored Products will ensure you are more visible in the search results.

Now you have an idea of where to spend your budget, how much should it be?

If you have an idea of what campaigns you plan to target then figuring out how to split the budget will be your first agenda. For Amazon sellers who have a big budget, they usually abide by the 80/20 approach. Instead of advertising all products you have, you focus on the top 20% of products that sell, which makes sure you don’t spend far too much unnecessarily on your campaigns.

There is also the very important 10% rule which means you should aim to spend 10% of your total revenue on your Amazon PPC campaign. Now, it seems like such a low amount but don’t worry because as sales grow, your budget will also grow too and you can utilise that extra income for new campaigns or already existing ones.

If you want to see useful data to help for future campaigns, ensure that you are investing enough into your campaigns. A good rule of thumb is anything that can get 20-30 clicks per day would usually provide enough useful data to work with.

Amazon PPC ads can also be modified at anytime, if you log in and get some insight from the data then you can see how well your campaign is running or whether you need to make some swift changes to improve it. Even though your campaign is live, you should wait until you have some baseline data before making any drastic decisions about what’s working and what to spend less on.

The last thing to remember about your campaigns is to monitor it closely, if you get anything less than 25% on total sales after it’s been running for a while then you need to make some immediate changes. Contact us for more information.