In the first part of this series we talked about the importance of having your keywords indexed on Amazon and the factors involved in Amazon’s’ decision to index or not. We learnt that if your search terms (keywords) are not indexing then your ads will not deliver, no matter how high you bid for those terms.

The second part in this series describes what to do when the keywords are indexing and the relationship between Amazon SEO and Pay per Click Advertising.

We have already selected the very best keywords based on numerous factors. Relevance and volume are two key metrics to factor in when making your choices about keywords to include in your listing.

  • Volume relates to the number of searches that a particular keyword or phrase receives over a certain period of time. We (along with most listing optimisation software available such as Helium 10 generally use monthly statistics for volume.
  • Relevance. This is where we dig deeper into SEO practices. There is no definitive number or metric out there that can truly define which keyword will be picked up as relevant to your product. This process occurs deep within the Amazon A9 search algorithm, the methods of which are highly confidential. We can, however, infer relevance through competition analysis.
  • The most valuable keywords combine the best parts from both of these keyword pools.

So the listing is SEO friendly and we are targeting highly relevant and high search volume keywords. As a result of the SEO work the main keywords are indexing, the next thing to do would be to ensure the listing is set up well for conversion with professional imagery, competitive pricing, enhanced brand content and so forth.

We have a perfectly optimised listing, the keywords are indexing and the listing is set up for conversion, the only problem? The product is buried on page 20 for the main search terms and nobody can see it. We need to add fuel to the fire and get visibility. The best way to do this is to use Amazon’s internal Advertising Platform.

We are finding that Amazon is now rewarding converting traffic from their internal advertising platform more and more. It is proving more effective than getting the traffic for example from using launch services using coupon codes. They aren’t working nearly as well as they used to. The reason being Amazon is trying to promote authenticity and not what could be considered to be page position (rank) manipulation by dumping a bunch of coupon codes.

So with this in mind, we target the very same search terms which we found during the SEO analysis for our advertising campaigns to effectively pay for visibility.

Exact Match campaigns will be the most relevant as the ad will only appear when a customer searches that exact term. On top of this we also set up broad and phrase campaigns, whereby Amazon will show your product for similar terms but not the exact term you have bid on. The reason for this is to ascertain new keywords which may be relevant and profitable. This can be done by downloading the advertising report and filtering your campaigns for broad and phrase.

As your listing is set up well for conversion these clicks should lead to sales based on people searching for those exact keywords. This in turn signals to Amazon that the product is relevant for those search terms and results in a boost in your page position. To begin almost all orders with come through Pay Per Click so your true cost of advertising is going to be high. This is Pay Per Click spend divided by Revenue.

However as we spike the algorithm and the product appears higher in the search results, the product will not rely so heavily on PPC and more organic sales will follow (sales which come from the main search results rather than paid traffic). This in turn reduces the real cost of advertising and increases the profitability.

It is very important to monitor your ad spend and AcoS which is the average cost of sale from the campaign itself as well as your true acos. If the net margin is for example 40% then and the AcoS is 40% then it is easy to think that you aren’t making any money. It is therefore very important to work out PPC Spend / Total Sales rather than just sales that come directly from advertising.

Let’s look at an example:

Sales From PPC 1000
Costs 600
Profit Pre PPC 400 40%
PPC 400 40%
Profit From PPC 0 0%
Total Sales 4000
Costs 2400
Profit 1600 40%
PPC 400 10%
Profit 1200 30%

Here it would appear that the campaigns are not producing any profit as the £400 in PPC eradicates all of the profit. On the contrary this PPC spend is driving the product up the search results and leading to more organic sales as a result so if we track the PPC Spend over the Total Sales then it will give you a lot more accurate depiction of the profitability of the campaigns and in this case the profit is 30%.

With this relationship in mind it is very important to look at the movement in page position for each keyword you are trying to rank for and if the product is appearing higher for that search term, then it might be worth breaking even or losing money for this search term to gain from the increased sales from organic searches which we do not have to pay for. This is a complicated subject so we will expand on it in future articles.

For example if our margin is 40% but the AcoS for a keyword with lots of search volume is 50% and the product is consistently going up the search results (rankings) for this search term, then we can say with confidence that losing 10% on that campaign will pay itself back many times over from the organic sales.

It is okay to lose money in a micro sense to make money in a macro sense and having access to ample and good data is a must to be able to make accurate decisions.

For reference we use Hello Profit to calculate organic sales versus PPC Sales, Helium10 for rank tracking as well as ascertaining search volumes and we can do this for you if you want. We would also recommend Sellics.

If you would like us to help with this process please click here.