Some Anecdotal Data on the Power of PPC on Amazon

I wish I had more concrete data to offer, as I know anecdotes aren’t nearly as compelling as aggregate numbers, but I don’t manage others’ sponsored product campaigns, so I only have my own experience to pull from. And I know that individual experiences vary too much to provide significant value, but I hope this sheds some light on the overall idea behind why it is good to run Amazon PPC.

I’ll start with my personal opinion. I am of the opinion that PPC is largely for visibility. See, I don’t think most shoppers go directly to Amazon, run a search, find the item they want, buy it, then leave. I think there is much more browsing, wishlisting, bookmarking, etc going on. If that is the case, I think the more you appear in front of shoppers, the more likely you are to gain a sale.

It’s almost a subliminal thing. They see you on page one, they see you on page two, then again with a new search for a similar keyword. Eventually you stick out. You look like a big, trustworthy brand. They decide to give you a shot.

My Experience with No Ads Running

I have been selling on Amazon now for over two years. In that time I’ve had sponsored product ad campaigns running basically non-stop. Not too long ago I lost my business debit card. This was the card attached to my sponsored product ads. I immediately had the card cancelled, but this was at the very beginning of a two week vacation in Asia. My new card was delivered to my home. So, within a couple of days, my PPC ads were paused due to payment failure and I wasn’t able to put in a new card number until I was back in the states.

So my listings went about eleven days without sponsored product ads. And during that time my sales decreased by 35%! This may lead you to believe that I had some very profitable campaigns. But the truth is, I did not.

In fact, I was running twenty two campaigns at the time, and only FOUR of them were profitable. I judge profitable by my ACoS being less than 40% as anything at or above is break even to loss for my product.

For me, even with eighteen unprofitable campaigns and four semi profitable (ACoS was still above 25%), the absence of advertising was terribly disadvantageous.

My Experience with Less Ads Running

Since that time I have attempted to optimize my sponsored product campaigns. I stopped running twenty two campaigns and pruned them down to the ones that performed the best. I now run auto and manual campaigns for each product type. However, I run ads for each variation within the campaigns. This means I have color variations running simultaneously and competing for similar keywords.

I have nine campaigns now, and of them NONE are “profitable.” I have been trying to optimize them and decided that having variations running at the same time competing for the same keywords was probably not very efficient. So I turned off the variations that were underperforming. I figured if I gave the whole budget to a single variation that was actually doing good, I may see profitable campaigns emerge.

But I was wrong.

When I simply turned off underperforming ADS for variations, but kept the campaigns alive with the best performing ad, sales plummeted 30%.

This is still baffling me, but I think it supports my idea that the visibility is what serves my products the best. I compete for stupidly expensive keywords, and those especially eat up my budget and are never profitable, but they are very important. These keywords appear to be crucial to my brand’s success.

I don’t know if I am totally off base and everyone else has a different experience, but I thought my story was at least a good way to start the conversation. I encourage everyone to share their own PPC observations so perhaps we can make sense of the data and formulate a general best practice.