Amazon CPC Strategy Part 1丨CPC Advertising Principles

This is the first article in a series that I have been thinking about for a long time. It mainly introduces the basic principles of Amazon CPC advertising system.

Yes, it’s what I always say: If you want to play a game well, you must first understand the “rules of the game”

Now, Aqi will introduce the "rules of the game" of CPC advertising system.

Please note that the relevance of the keywords you choose to place and the ASIN is the most important. Before you have proficient CPC placement experience, it is not recommended that you use some "edge ball" tactics to expand advertising traffic.

2) Bid

Bid is the highest bid we set for advertising.

In addition, Amazon also has a feature called Bid+. Based on the bid you set, Amazon will increase some bids according to the situation to help you win better ad impressions. There is an on/off button next to Advanced Settings under Campaign settings. On means it is enabled (Note: Automatic ads do not have this feature)

3) Budget setting

Especially for automatic advertising, AI learning requires sufficient data as support. If conditions permit, try to give enough budget.

4) Click-through rate (CTR)

Products with high click-through rates (regardless of whether they generate orders or not) are all high-potential listings. You can lower the price appropriately to increase sales. Otherwise, you need to think about whether there is a problem with the main image, title, or product itself.

5) Conversion Rate (CR)

The longer an ad group is open, the more weight it will have ( quality score ). The higher the conversion rate, the better the ad performance, the higher the weight, and the bid for the top ads will be lowered accordingly.

Quality score (QS) is what we often call ad weight. It is determined by the sales performance of the product itself and the performance of the ad group. Quality score is one of the biggest factors in the ranking of ad placements.

For example: Now there are three identical products, ABC, bidding on the same keyword ad space. A's quality score is 10 points, and its bid is $1.5; B's quality score is 7 points, and its bid is $2; C's quality score is 4 points, and its bid is $3; then, A's ranking score is 10*1.5=15; B's ranking score is 7*2=14; C's ranking score is 4*3=12; therefore, the ranking order displayed in Amazon search results is A>B>C

Now you should know why your ad is still ranked at the back even though your bid is higher than Amazon's recommended bid.

1) Under what circumstances will the fee be deducted?

CPC is the abbreviation of "Cost Per Click", which means pay per click, so when your ad is clicked, it will be charged.

2) Deduction calculation formula

Actual CPC charge = Second place Bid bid * (Second place quality score / own quality score) + 0.01

For example: Two identical products AB bid on the same keyword, and B is the second to A; A's quality score is 10 points, and the bid is $1.5; B's quality score is 7 points, and the bid is $2; when the buyer clicks on A's ad, the actual deduction is 2*(7/10)+0.01=$1.41

3) Will there be repeated deductions due to malicious clicks?

If a customer clicks your ad repeatedly within 72 hours, it will only be counted as one click; therefore, if the same customer clicks your ad again after 72 hours, it will be counted as a second click.

Therefore, Amazon will record the buyer's login information: including IP, login device, browser fingerprint, to avoid malicious clicks

1) In order to save money, the budget is very low

As mentioned earlier, ad groups are also an important factor affecting quality scores. Especially for automatic ads, AI learning requires sufficient data as support. If conditions permit, try to give enough budget.

2) Don’t use keywords with too high bids

If the bid for a word is very high, it means that the effective conversion rate of this word is very high. If you give up this word, you will lose a very high-quality advertising traffic entrance.

My suggestion is: add this word and lower the bid appropriately, so that you can "pick up bargains" when the top sellers are short of budget.

3) Put all ASINs in one ad

Not to mention that it’s hard to adjust budgets and ads, you can’t even analyze the ad performance of a product individually.

4) To save money, the bid is set very low

This operation doesn't matter for old products with stable sales. If you do this for new products, you are just fooling yourself.

5) The higher the bid, the higher the display

Please read the second paragraph of this article carefully: Main factors affecting CPC ad placement ranking

6) Frequently adjust ads when the data sample is small

Some friends have a daily budget of $5 for an ad group, but they only get two or three clicks a day. Then they deny the keywords that do not generate orders a few days later. Before long, they find that the ad group has no exposure. This is a typical case of self-destruction.

My suggestion is: if conditions permit, give enough budget and observe for at least 2 weeks before making any adjustments

7) Abandon the ad groups with high ACOS

In fact, this question is related to product categories and profits, and requires specific analysis of specific situations. You should know that advertising brings not only direct sales, but also add-to-cart, collection, and the role of diverting traffic to the entire store.

The above, I hope it can help you