A Detailed Guide on Amazon PPC Campaign Structure

In 2021, Amazon Pay-per-Click Advertising (PPC) and how it works is basically essential know-how at this point for every aspiring e-Commerce entrepreneur.

According to Statista, Amazon already holds a 50% share in the US online retail market. Even if you aren’t an Amazon Seller, having a basic understanding of Amazon PPC campaign structure goes a long way in understanding your competition and how it works.

Amazon PPC Campaign Structure hide

Amazon PPC advertising has exploded over the years. From just one ad type and one targeting option in 2012, now it has 3 main ad types and 2 types of targeting. A crash course in these three ad types will help you structure your campaigns better!

Sponsored Brands

Sponsored Brands ads, sometimes called Headline Search ads, are ads that show up as a banner at the very top of the SERP. To go back to our “gym bottles” search query, the grey bottle at the very top is a Sponsored Brand ad for Embrava gym bottles.

These ads are usually a store spotlight, and sometimes also show up vertically along the side of a page, though a “headline” banner is much more common.

Stores can add a maximum of 3 product images in a Sponsored brand ad, so usually, brands showcase 3 variations of a popular product rather than 3 different products they sell. When you click on a Sponsored Brand ad, you get redirected to product detail pages, custom landing pages, or a brand storefront.

Ad Placements

There are three areas of the results page where Sponsored brands can show up. The first which we already mentioned is the header at the very top of a SERP. Another is a vertical ad right on the sidebar where shoppers can add filters to their search queries. If you look closely, you can see the little “Sponsored” tag right along the bottom.

Sponsored Brand ads will also show up at the bottom of the SERP, under “Brands related to your search.” Here we can see the Sponsored Brands ads of three different stores. There’s another Sponsored brand ad right beneath for another storefront as well.

Sponsored Brands ads will also appear on Product detail pages, usually as a rectangle right beneath the product bullet points. Do not confuse this rectangle with the little box on the right! The box on the right side is a different type of ad we’ll mention in the next section…

Ad Formats

Sponsored Brands is unique. You actually get to choose between three different ad formats.

We already mentioned the Product Collection – showcasing three products at a time. Here’s a more simple example of a Sponsored Brands Product Collection ad for the search query “baby monitor.” You can see three types of baby monitors that Owlet is showcasing in their ad.

For Store Spotlight, these are really similar to Product Collection ads but they don’t really feature products, they feature the store itself. You will always see these along with the For Store Spotlight, these are really similar to Product Collection ads but they don’t really feature products, they feature the store itself. You will always see these along the bottom of the SERP like in the screenshot below, but sometimes they show up at the top, too.

Sponsored Brand videos (SBV) are the really special part of this ad type. You can choose the Video format and run an SBV campaign. By running SBV campaigns, you can advertise using a video. We can’t recommend this ad format enough. It’s incredibly good at driving sales.

These videos show up smack in the middle of the page, so you really can’t miss them! For Sponsored Brand video, you can only advertise one product and the link will go to its product detail page, still, within the video you can show all manner of variations for it.

On Amazon, product videos are really powerful, they can double the click-through rate. Shoppers find products with videos to be more trustworthy, even for a simple video.

Targeting Types

Sponsored Brands has two targeting types like Sponsored Products, keyword, and product targeting. They function the same way as mentioned in the previous section. You can target a set of keywords or target competitor products.

Targeting competitor products will have your Sponsored Brands ads show up on product detail pages instead of search results pages.

Campaign Types

For Sponsored Brands, you don’t have two campaign types. You do get a list of suggested targets and bids from Amazon, but ultimately you have to add them all manually. There is not really any “automatic targeting” campaign, but there is the option of “Automated bidding.”

For automated bidding, Amazon will pretty much automatically optimize your bids for you, but only for placements that aren’t Top of Search. Ultimately, this feature isn’t as robust as an SP automatic campaign, but it will do if you aren’t sure how to optimize your bids. We highly recommend seeking resources or Amazon PPC software to help with this.

Step 0. Naming Campaigns

An absolute necessity before you even do Step 1 is having a proper naming convention in place. The disorganized naming of campaigns will be your downfall in the future! Start at Step 0 and follow our foolproof naming convention:

{Ad Type} – {Campaign Type} – {Targeting Type}- {Product} – {Strategy}

For example, here’s are two properly named campaigns:

SP – Automatic – KW – B07XXXXXXX – Gym Bottle – Dynamic Bidding

SP – Manual – PAT – B05XXXXXXX – Skateboard – Product Launch for May

Step 1. Determine Ad Type

The first step is figuring out which ad type you need for a particular product. If you want to promote a single product at a time, Sponsored Products is your best bet. You can use SP ads for all categories excluding used, refurbished, or adult products. Sponsored Products allows you the most control over your keywords and targets out of all ad types.

If instead, you want to direct traffic towards your whole store or a particular product series, Sponsored Brands is the way to go. Well-designed headline banners can pull in a lot of traffic to your stores, and you can advertise multiple products simultaneously. Meanwhile, if you want off-Amazon traffic, or want to hit your competitors hard by showing ads on their Product Detail pages, then Sponsored Display is ideal.

Step 2. Automatic Campaign

Once you’ve figured out your ad type, you move on to the second step. Here, we will go with Sponsored Products because, as mentioned before, this structure is geared towards SP ad campaigns.

Start an automatic campaign. This is you letting Amazon do the grunt work of keyword research. You need to name the campaign, set a daily budget – we recommend at least $10-25 to start – and set campaign start and end dates. We recommend having it run at least a month, ideally more if your budget allows. Create your “Ad groups” and select the SKUs you want to advertise and then set a default bid for Amazon to use per target.

You can think of an automatic campaign as akin to putting your lasagne in the oven. You set those layers up, and then you let the oven do the cooking for you. Once you’ve filled out those fields, hit submit and your campaign is ready to roll. Amazon will pull in data for you for as long as you keep your SP automatic campaign running.

Step 3. Campaign Analysis Part 1

The third step is where the work begins. Once your SP automatic campaign has run its course, you need to sit down and analyze all the data Amazon collected for you.

Head over to Amazon Campaign Manager, click the sidebar and select “Reports.” Download the SP Search Term Report, and then pop it into Excel. Set the headers as filters, and filter by Campaign name, time period, and here’s the key step – sort by Conversion Rate%, from highest to lowest.

Why Conversion Rate (CVR) you ask? Because CVR is the ratio of orders to clicks and the best indicator of how well a keyword pulls in orders.

It’s not enough to simply look at Click Through Rate because so what if someone clicked on your ad! Did it lead to a sale? A keyword that only gets clicks is no good because it’s just going to add to your ad costs. You need the keywords that convert into sales.

Sort by CVR and find the top-performing keywords. We suggest setting the filter at CVR more than or equal to 10%, below that is not really worth it.

Step 4. Manual Campaign

Remember that list of top keywords? Now is when you use them. Step 4 is starting an SP manual campaign. You have the data; you analyzed it; you pulled out the best targets and so it’s time to take more control.

Create another SP campaign, but this time select “Manual targeting.” Fill out the same fields as before and select the SKUs you’re advertising. Click on the “Provide your own keywords” option and put in all your top keywords.

You’ll have CPC data from the SP automatic campaign you ran. You can use those CPCs as your baseline bids. Add on 10-20% to the CPC amount to bid aggressively on your top keywords. After setting it all up, just submit it and let it run for the next week.

Step 5. Campaign Analysis Part 2

After one week, you need to look at your Search Term Reports again. This time, you need to download the SP Search Term report for your SP manual campaign. We also really recommend keeping your SP automatic campaign running alongside to keep finding new keywords and consistently analyzing new data for insights.

Pop your SP Search Term Report into Excel again, and this time look at another metric – ACoS.

ACoS, or Advertising Cost of Sale, is where you can see if you’re losing money or earning money. Your ACoS should be low, and anything above 60% is a red flag. Sort your keywords by ACoS, and for those with low ACoS, bump up your bids to rank even higher on them. For high ACoS keywords, lower down to the CPC and give them a little more time before you decide to remove them altogether.

Step 6. Constant Optimization

The last step of every Amazon PPC campaign strategy is to constantly optimize your existing campaigns. Unfortunately, you can’t just let your campaigns sit there and expect them to work well, for that, you need bidding automation software. You need to keep downloading those reports, keep coming up with new keywords, keep optimizing your bids.

Amazon PPC campaigns are a labor of love. They are time-intensive, but the results are so, so worth it if you really put the work in. Running your SP campaigns well, and following the structure that gets you a good manual campaign at the end, is what gets you to Top of Search. Top of Search is your ticket to 7 figure sales. Make sure you always have that goal in mind when running Amazon PPC ad campaigns!

Structuring a Sponsored Brands and Sponsored Display campaign will definitely be a little different, but the fundamental structuring strategy remains the same.

A Detailed Guide on Amazon PPC Campaign Structure