Amazon PPC: How to launch a profitable holiday shopping campaign in Q4 2022

Episode Description

We’re entering Q4 of 2022, which means selling stuff or moving inventory is the order of the day. And what better place to do that than Amazon?

But, selling on Amazon is highly competitive. You’re going to see so many competing businesses fighting to capture the most sales. That’s why launching a profitable campaign needs an effective #PPC strategy.

In this episode, we spoke to two of the best #AmazonPPC experts in the industry to learn all the ins and outs, tips and tactics, and more to help you launch a profitable holiday shopping campaign this Q4.

Tune into this episode of PPC Town Hall to learn:

- How to find great keyword opportunities?

- How to optimize ACoS?

- How to use video to increase sales?

Episode Takeaways

Finding Great Keyword Opportunities

• Leverage Amazon’s search query performance report to assess the market share of impressions, clicks, add-to-carts, and purchases for specific keywords.
• Analyze competitor keywords and product performance to guide your keyword strategy and improve visibility on Amazon.

Optimizing ACoS (Advertising Cost of Sale)

• Adopt a phased approach: focus on aggressive advertising during product launch (phase one) to boost visibility, aim for break-even in mature phase (phase two), and maximize profit in the decline phase (phase three).
• Utilize tools like Amazon’s search query performance report to measure the impact of PPC on organic sales and adjust campaigns for better profitability.

Using Video to Increase Sales

• Implement video ads to showcase products effectively, as they occupy significant real estate on Amazon’s search pages and enhance user engagement.
• Focus on creating simple, clear videos that demonstrate the product’s use, ensuring production quality is decent but not necessarily high-end. Videos often lead to higher click-through rates and conversions.

Episode Transcript

FREDERICK VALLAEYS: Hello PPC Town Hall. My name is Fred Vallaeys. I’m your host. I’m also the co founder and, or one of the co founders and the CEO of Ad Badger, a PPC management tool. Now at Ad Badger, we’ve been working for a very long time on a PPC. On managing Google ads, Microsoft ads, and more recently, we’ve also started helping people with Amazon ads, but Amazon is so important, especially in Q4, if you’re trying to top products and we thought, why don’t we bring in two of the world’s smartest people on optimizing your Amazon ads and do an episode on that, which I think is really relevant as we’re now in Q4.

So we’ve got another great episode of PPC Town Hall. Thanks for joining us. Let’s get rolling.

All right, so let’s bring in my guest. So we have Michael and. Steven, Michael, you’re from Ad Badger. Tell us who you are, what you do, and what your connection is to Amazon ads.

MICHAEL ERICKSON FACCHIN: Yeah. I started in the Google ads space about 10 years ago. And I was really lucky back then to have a client who was an early mover to Amazon.

And I got exposed to Amazon ads, even in the days where you’re able to run Amazon listings and you would click buy now, you would go to their Shopify store. That was a Amazon product ad way back when, and I love to see the evolution of that. And in 2017, I started ad Badger, which just focuses on Amazon ads.

Around that time started podcasting about Amazon advertising. So we’re like 200 episodes in trying to turn over every stone about Amazon advertising to leave, you know, to, to basically find every little nook and cranny. Of opportunity there. And it’s wild that even after 200 episodes, there’s like still a whole bunch of new things, like we have a list of many, many more topics to talk about just within the next few weeks.

So it’s been really cool to sort of watch the rise of Amazon advertising as a major player in the online advertising space over the last few years. I’m super stoked to be here. Steve is a good friend. We’ve collaborated on some great content together. I think our PPC and SEO. Series is one of the most popular things on PPC and SEO for Amazon.

So like, yes, I always say all of the internet and all of the universe, assuming there’s only one internet, you know, most popular internet, most popular in the universe. But yes there’s only

FREDERICK VALLAEYS: one universe.

MICHAEL ERICKSON FACCHIN: I thought this universe,

STEVEN POPE: the captain America shield in the background. So I’m sure we’re going to be talking about multiple universes here today.

But yeah, it’s, it’s great to be on. Like Michael had mentioned we’ve done a lot of podcasting together. We’re definitely very friendly. And when I was. Listening to Michael start his podcast. I felt like he had, I was like episode 30 or so back in the day. I felt like he had just done more in the weeds, granular, tactical PPC support than any other mechanism podcast about Amazon PPC on, on the internet.

And so I, I, I got myself onto the podcast with him and we had some great series together and we’ve since done, done both of that. Introing myself to the podcast. I’m the founder of My Amazon Guy, and it’s a 300 client agency with, with more than 300 people around the world, supporting Amazon brands, full service for SEO, PPC design and catalog management.

We have over 1200 videos on YouTube. Talking about how to grow sales on Amazon. And it’s been great to build all that content. Actually got to meet Gary Vee last Thursday over at the sell and scale helium 10 summits. And, and the thing that he was talking about is just make content. You’re a brand, you got to make content and I live and breathe and sleep and drink that.

And that’s a little bit about me. I got into Amazon about 10 years ago. I’ve, you know, I was part of the beta PPC test groups. I, I I’ve missed the day when you could get 2 cent clicks on Amazon. Wasn’t that the best? Oh my goodness. But yeah, today Amazon’s totally passive income and everybody should sign up and do it.

Right. So it’s a lot harder these days, which is why you’re listening to this podcast PPC hacks. I’m sure.

FREDERICK VALLAEYS: If you’re going to do Amazon for passive income, you might as well also become an affiliate on Google. That’s that stuff is still easy to. Yeah, yeah, we’re definitely kidding here. So no, it’s, it’s amazing to have the dream team here of both of you explaining to people.

And again, my audience is usually more a little leans towards Google ads. So getting into the nitty gritty here of how you move onto Amazon and do it successfully is going to be great. But I figure we start there, right? So what’s going on with Amazon? You were sort of kidding about, you know, or you were serious.

I mean, it used to be a two cent click. Now it’s clearly not a two cent click anymore. And it kind of feels to me that whenever you shop on Amazon, like I’ve searched hard to find the product I want and I’m about to buy it and then boom, there’s an ad and they tried to take me to some other product, right?

Amazon is monetizing more on ads than actually moving product. What’s your guys stake on all of this and where do ads stand on Amazon?

STEVEN POPE: Amazon is totally out of ad space. Like they’re just full chock full. They have nowhere else to put ads. They’re, they’re talking about putting a second video ad on the search page.

They’re talking about putting video ads directly on product pages. You know, they’re, they’re doing all kinds of external traffic. They’re obviously very friendly and want Google’s traffic too. So if you’re good at Google AdWords and. You haven’t launched your products on Amazon. I mean, that’s, that’s a huge thing that a lot of people don’t know how to do.

But what do you think, Michael? I mean like back in the day when Google ran out of space, what did they do? What do you think Amazon’s going to do?

MICHAEL ERICKSON FACCHIN: I think if Amazon had it their way, every single click on Amazon would be a paid click. I think that’s their ultimate thing. And then even further.

They wish that they could monetize every single click for e commerce on or off Amazon. They’ve got certain mechanisms to, to try to basically grab, you know, Hey, if you’re running social ads, why don’t you send it to Amazon? If you’re running ads on Google, why don’t you send it to Amazon instead? Hey, for your checkout Shopify store, why don’t you click a checkout with Amazon button there too or buy with Amazon.

So I think if they had it their way, every single click would be a paid click on Amazon site, and then they would have a piece of every single e commerce transaction period. So you’re absolutely right Stephen, like seeing the amount of ads on Amazon, it’s it’s unbelievable. And there, I think they’re really thoughtful to try to thread that needle to to Basically keep the quality of, you know, there’s this idea coming from the Google side of things that, you know, clicking on an ad isn’t as honest or truthful or useful as clicking on an organic listing on Google whether or not that’s true, I think it’s a thing.

And. Amazon’s trying to throw that needle where every single paid click gets you to the same solution as a organic click with the way that they’ve influenced their algorithm, I think is really interesting. So those are some things that I think that, you know, looking at what Amazon’s been doing I speculate on.

FREDERICK VALLAEYS: And one thing I think they have to be careful with is I will do a very specific search as a consumer and look for a product with a brand. And I know exactly what I want. And then the first result I guarantee you is not that product. It’s some ad that’s trying to buy me to buy something else. That’s frustrating as a consumer, right?

Like, I don’t know how you guys feel about that, but now I have to start digging to actually find the thing I knew I wanted. That’s not good for the consumer experience, but Amazon has such a strong hold on e commerce and you know, buying the prime and the fast and free shipping that they can do it for now.

But I think that’s, and that’s one place where advertisers have to be careful too, that they don’t contribute to a negative experience because like Steven, you were saying, you know, it’s, it’s all about brand, right? I mean, why do we content? Because we have a brand and what is a brand about? It’s about being respected and trusted.

And that’s something to protect, you know, Frederick, I agree with you that like you don’t want to be about to buy something and then get interrupted. But there’s a ton of opportunity during the process of buying something on Amazon where people scoop up complimentary products. Oh, I’m buying. You know, an oversized Mason jar to drink out of, let me go buy, you know, a smaller size for my wife cause, or a coffee cup Mason jar as well.

So for the people listening on the podcast, Michael just held up the largest Mason jar of everything. I think you actually need to buy a bigger dishwasher for that. Yes. I think this is the way the beer glass with the star Wars logo on it. Yes. So the, the, the thing that I would say is like compared to Google traffic, we’re like, Google traffic, people are trying to go in deeper on something.

MICHAEL ERICKSON FACCHIN: A lot of times on Amazon, people are looking for complimentary products. So the, the buying psychology is, is I think different on Amazon than a search on Google.

FREDERICK VALLAEYS: And that’s interesting, right? So again, my audience more in tune with maybe the Google how you do a search and what the consumer is expecting.

So it sounds like you have to just think about advertising differently on Amazon. And what does that mean in terms of keyword selection and your targeting?

STEVEN POPE: Well, if you think about it, when somebody searches on Google and let’s say they’re searching for men’s artisan soap, they expect to only buy men’s artisan soap when they do that search.

And then if they go on Amazon and they’re searching for that, they might also buy a gift set. They might also buy 10 other different items. Maybe they’re getting all their gifts done for Christmas all in one go. But the difference is, is when you do this through Google and you land on a private web page.

You’re doing one checkout for that item. But on Amazon, I could do 17 checkouts or one checkout with 17 items. And I already have all my payment information there. Amazon has sped that process up. And although we have seen Amazon prime two day shipping under fire right now, in the last two weeks, we’ve seen prime actually be two to five days shipping.

And you got to check your, your, your settings when you go through that checkout funnel. It’s still far more trustable. Of a brand a la Amazon than it is to buy from a private website, right? And so if you want, I’d be happy to kind of showcase some of the ad types that are on Amazon for those that are curious with the video and we can go through some of that.

There’s just so many here. So at the top, we’ve got sponsored headline ads. This is my item right here. I’m in sponsored product ad slot. Number one with my galactic natural soap for men. And I’m trying to push this on the keyword men, artists, and soap. And my number one competitor is Dr. Squatch. Dr.

Squatch is taking up multiple ad slots. They’re in slot three, slot four. Then we have our first organic slot right there. But as we scroll down. Highly rated section. All of these are ads, three, four of those five, all Dr. Squatch. Then we get another row of organic. So we’ve seen more. Can I

FREDERICK VALLAEYS: pause you for a second, Steven?

So I think you must be running some plugin because I don’t think this is the Amazon page that I see.

STEVEN POPE: There is a plugin. Yes. So it shows like the FBA sellers and the BSR rankings. I use DS Quimview.

FREDERICK VALLAEYS: Okay. Sorry. Say that name

STEVEN POPE: again so we can tell our viewers. Yeah. DS quick view Delta Sam quick view. And, and so that just shows you a little bit of information in the search.

It helps you make fast judgments. Here’s our first video ad, which we can see in the middle of the page there. And these have been really hot and this is up and coming. Amazon owns Twitch. 15, 22nd ads where you showcase the product, why somebody would buy it. But as we scroll down the page, I mean, here’s another row of sponsored products, like we’re not even, we’re not even 50 percent of the way down.

And we’ve seen probably seven ads to three organic. It’s just crazy. The amount of ad space that’s taken and over time, we’re going to see more of these rows be taken by, by PPC. We’re going to see, and then there’s the second video ad that showed up at the bottom there. And when you go and click on an actual product page, we’re going to continue to see some of that.

So it’s, it’s really interesting to see kind of where ads are going.

MICHAEL ERICKSON FACCHIN: That wasn’t even all of them, Steven. You could have kept, you could have kept going. Yeah.

FREDERICK VALLAEYS: That was just 50%. So one of the big questions we had for the show today was do people actually need to advertise on Amazon? If you’re a seller, do people get away with just having your organic listing or do you have to do PPC?

STEVEN POPE: This is a trick question. Yeah,

MICHAEL ERICKSON FACCHIN: right. Look at how many ads we just saw for sure. And those placements are ad only. So it’s, it’s very likely that. Yeah, there’s, I’m just trying to think, scan my memory of the last year. Like, I don’t think there’s a single successful company on Amazon that I’ve talked to, and I’ve talked to like hundreds of people that wasn’t advertising, like you have to do it in order to make a better

FREDERICK VALLAEYS: way.

Is it like you have to prime the pump with ads to get your organic running or is it the other way around? Or is it like completely separate?

STEVEN POPE: There’s going to be a lot of mingling on this question. So I have the number one wine glass on Amazon organic slot. Number one, he got banned from ads because the word drinking was on the wine glass.

And within 14 days I lost my organic slot. One went all the way down to slot 47. I’ve been at slot 47 ish. For over a year now, and I could never go higher than that. And of course, slot 47 is the bottom of page one. So the amount of sales that that unit generated for me just absolutely tanked. So ads do help PPC.

I like to give this ratio. I’d say about every one PPC sale you get on Amazon generates three organic. Over time and generally within about six months and you could extrapolate and say that could go faster even in the honeymoon period on Amazon in the first 30 days, we call it the honeymoon period.

And the more sales you generate during that first couple of weeks on Amazon, you’ll actually leapfrog rankings. And that PPC strategy is fundamental to gaining organic traction,

MICHAEL ERICKSON FACCHIN: which is a major, major difference between Google ads. And Google organic rankings. I mean, Google said very explicitly that paid placements don’t influence organic placements directly.

I’ve heard people argue that, oh, it helps indirectly, like they’ll see your brand in the ad and then perhaps you’ll build up brand recognition and you have a better click through rate on your organic things because they recognize you more on Google. Frederick, I’m sure you have so much more to say about Google’s interaction between paid and organic.

But. My, you know, I think most people understand that, correct me if I’m wrong, but that there’s no collaboration between paid and organic on Google. Would you say that’s,

FREDERICK VALLAEYS: yeah, they don’t directly, there’s no, if you do this on paid, then it will happen on organic. However, like you were saying, if you have a really high listing on organic, it could decrease your CTR on paid because people might gravitate towards the organic listing.

And there’s an indirect effect that happens.

MICHAEL ERICKSON FACCHIN: Yeah, on Amazon, they, I don’t think I’ve ever seen anything that explicitly says you must advertise in order to, Boost your ranking. However, I don’t think a single person would say like PPC has no effect on organic. I think everyone would say PPC has an effect.

And while I don’t think they’ve explicitly said, you know, how, how successful you are on paid influences your organic, they’ve said other things where they say companies that run every single ad type sponsored products, sponsored display, sponsored brands, end up launching a new product and hitting an average amount of ratings, category average amount of ratings, you know, X percent faster than those that don’t.

So they, they often share the benefits that companies that advertise grow a lot more. And it’s a sort of like nudge that says like, Hey, you know, we’re not going to tell you to advertise, You know, because it’ll impact your organic ranking so much, but I think I mean, like, like they have Amazon ad reps that’ll just like ring you up on your brand and say, Hey, I want to set up some campaigns for you.

STEVEN POPE: We’ll help you out. It never does, but they do get you to spend more money, right? Just so much more money. And that’s the idea. I mean, at the end of the day, if Amazon is generating orders, They’re making money. They make money on the ads. They make money on the referral fees. They make money on the logistics and the FBA.

And that’s what Amazon’s in the business of, but I think the biggest complaint that we hear, not only are PPC costs up like 40 percent year over year, but we hear that Amazon doesn’t care about sellers. And honestly, I think that’s a true statement, right? Like they only care about consumer buyer experiences.

So anytime you’re trying to evaluate Amazon and like what to do and how to strategize, always think about it from Amazon’s perspective. Is this in the best interest of a consumer? If it is, Amazon will support it. If it only benefits sellers. You’re S. O. L. They don’t care at all. Fascinating. Now, Michael, you talked about ratings, right?

FREDERICK VALLAEYS: And going back to the interplay a little bit, but if you had a PPC campaign on a brand new product and you had no ratings, is that one of these things where you might as well, I mean, you’re not going to sell a product without ratings or with a low rating? How does that all play in? Yeah, you know, the, the curious thing, the connection between paid and Organic and paid and overall sales is that on Amazon sales?

MICHAEL ERICKSON FACCHIN: Leads to more sales. So, you know, stepping away from like a brand new product with no reviews yet, you could say that, you know, if you have two products, one is advertising, one isn’t like that extra boost from, from paid will lead to a more prosperous, higher volume product. So there’s, so when you zoom to the beginning and you have a product that’s brand new, that doesn’t have any reviews yet, you know, how do you launch that?

A lot of Amazon. Marketers talk about proper ways to launch a product. So you’re absolutely right. Like your conversion rate will be lower when you first launch, which means you’re going to have a harder time when you run PPC ads in the beginning. And only talking about PPC ads on Amazon and not talking about all the other things that people can do to launch.

When we talk about PPC ads. The ratio of how much you’re spending to the revenue that you’re generating on that product is way out of ratio of what it would be maybe a year in. So it’s a very common place when people are launching ads or trying to gain traction on ads, or they’re trying to gain traction organically, same, same sort of scenario, you know, Hey, we want to rank higher.

We want to boost overall sales for this. We want to increase our bestseller rank, or we want to take this product from zero to one. There’s a lot of discussion around, well, how much am I going to spend on advertising as an investment to kickstart it? So even though my conversion rate will be low in the beginning, my ROAS will be low in the beginning, trying to strategically thread that needle and find the right things to advertise on early on is exactly what we want.

The mindset people need when they launch a product on Amazon, knowing that you’re spending a lot.

STEVEN POPE: That relationship between SEO and PPC can be really explained by some of the available tools. So Vim, if you want to share my screen here I like to use the golden ratio. So for every one sponsored keyword, I like to have two organic keywords.

So if you’re ever trying to wonder, like how much should you advertise? So this is the keyword distribution. Right there. And so on this particular product, you can see 1, 400 sponsor keywords, just under 2, 700 organic, which is pretty spot on close. One organic, I’m sorry, one sponsored keyword to every two organic keywords.

So, so this is the item we’re looking at. It’s my macho soap. This is one of my better sellers right now. And by doing it that way, this allows us to see, okay, organically it’s ranked number one on, on a handful of keywords like vegan soap gift set, but that’s not necessarily something I’m advertising too heavily on.

I’m in slot 42. All of this data is super available, so if you haven’t started with Amazon ads yet, you can go to the top five. 10 competitors in a vertical and within 30 minutes have pretty much a game plan of what keywords you need to hit. Put them into the, the SEO and the title on the bullets and all that good stuff, but also know like where your competitors are advertising and in what rank.

Are the advertisements showing up for another cool piece of data that you have access to on Amazon is called the search query performance report. This is my own brand’s data. And you can see your market share. So in here you can go through and I call it the ICAP marketing funnel. So I for impression C for clicks a for add to carts and P for purchases.

I cap and you can go in here and see all of the search funnel impressions that are available. So Amazon’s releasing all this data. This is brand new. They didn’t do this last year. Google is like a decade or even longer than a decade ahead of sharing data with Amazon sellers. But now you can come in and say, okay, so I’m.

I obviously have a problem here. I’ve got Dr. Squatch. There’s 30, 000 people a week that search for that brand. How am I going to encroach upon that brand? Well, I’ve got a 1 percent brand share of impressions when somebody searches for that particular item, my click through rate drops down to 0. 33. And as I go through, I can see, okay, how many people are adding it to cart?

9 percent they get that far. But then finally when it gets to the purchases, it drops all the way down to 4%, just under 4%. So, so having this ability to know like what keywords to focus on, Amazon’s got lots of tools. There’s some paid tools like the helium 10 cerebral I showed, but on this search query performance report, it’ll basically spit out and tell you where you stand, what your market share is on impressions, clicks, add to carts and purchases.

And it gives you a lot of areas on where you should focus your ads.

FREDERICK VALLAEYS: That’s great. And Steven, I know on Amazon, it’s a little unique too, right? Because I feel like there is much more connection between STO and PPC. Do you feel like the data you need, you can get it from the ads reports only, or do you also have to log into seller central?

And get some of the organic data to help supplement your paid strategy. So,

STEVEN POPE: so you’re going to need both. The nice thing is like a tool like Helium 10, there’s like a hundred tools out there like that tool will cost you a hundred bucks a month or less. And then I’d love to turn it over to Michael to talk about keyword mining because that, that dude’s a genius when it comes to looking at search term reports.

And you can absolutely cross apply some SEO. From the PPC search reports, but search query performance report cerebro and helium 10. And, and then the search terms report inside of advertising. Those are my three go to reports. Michael, how do you mine it?

MICHAEL ERICKSON FACCHIN: Yeah, it’s interesting from the, you know, from my days of like doing Google SEO and Google ads.

There was, I remember there was a moment where Google said, if you’re doing rank tracking, On Google, you can’t play with Google analytics or like the official Google ads API. Or the Google webmaster tools API. So like you either pick, like, do you want the third party data scraped on Google or do you want the official Google data and then Google eventually like added ranking into Google search console?

I think that’s true. My memory is hazy on, on the Google side. Is that, I think that’s right, Frederick.

FREDERICK VALLAEYS: Yeah. The data, the rank data is now in a search console, but the rank data no longer exists in ads.

MICHAEL ERICKSON FACCHIN: Right. That’s right. Tradition doesn’t matter. Yeah. So it’s really interesting. And I mean Stephen did a great job sharing the search query performance dashboard, which tells you basically, you know, how many orders you’ve gotten that started with a search of that keyword.

And what’s so cool about that the strategy that gets deployed a lot now with selecting what keywords to search for. You know, this is how PPC errors on Amazon talk go hard on, you know, what keywords should we push or for our paid so that it leads to organic ranking. That new report that Steven just shared, the search query performance dashboard is technically not an advertising report.

So, but what you end up doing is you look at that list and you say, well, it will be amazing if we increase our purchase rate on this term, let’s go back into advertising and. configure our campaigns in a way that we’re pushing harder on that keyword. And then we can actually watch the purchase rate of that term change.

So, you know, you can think of it almost as a yes, organic ranking matters because it leads to a higher purchase share. And then you can look at your advertising and say, well, now I know specifically how valuable this keyword is due to the search query performance dashboard. I’m able to know how much will I invest in my PPC In order to pay for those increased costs.

Visibility for those particular search terms. So, yeah,

FREDERICK VALLAEYS: I’ve got a case study on this. What was that, Patrick? Michael, I feel like I cut you off, so go ahead and Oh, no, no, no, I was finished. Okay Steve, yeah, go ahead.

STEVEN POPE: Yeah, I’d love to show a case study. So Vimo, if we could show this case study. So this is an example of how we use the search query performance report to gain market share.

And on this case study, which we’ll share the screen here in a second, you can see impressions, clicks, add to carts and purchases, which is why I call it the ICAP marketing funnel. Well, I had a term Sage candles for cleansing house. And it was on one of my smudge kits that I sold on. And the report had basically told me when this first came out in March of 2022, the report basically said, Hey, this is an important keyword for you.

And I’m like, what do you mean this is important, right? I have no idea why you’re telling me to advertise on this. I don’t sell a candle product. I sell a smudge kit. And just for perspective sake, I’ll pull up that screen. So this is what I was selling and the report said, no, no, no, this is really important.

You need to, you need to focus on this keyword sage candles for cleansing house. And I’m like, fine, whatever. Well, the reason why it was so important is because when this report first came out, my impression share was just under 3%. My click share was just under 8%. Add to cart’s nine and purchases seven.

Well, what you see here is the difference between impressions and clicks. Basically three times as many people clicked on my product compared to all of the other available impressions. On Amazon. And so what that told me was, is that if I spent more money on ads, and if I put those keywords into my listing for SEO, that I would have a higher performance.

And that’s exactly what happened in less than seven weeks. I tripled my impression share. I tripled my click share and tripled my add to carts and purchases. And so now when somebody types in the search term, Sage candles for cleansing house on Amazon, one out of five people, almost. And this is an example of how using data allows you to understand where to focus your ad dollars as well as some of your SEO content generation.

And both of these work together in continuity and you get results like this. So it’s really cool to see what you can do on Amazon.

FREDERICK VALLAEYS: And that’s amazing, Stephen. So you tripled, I mean, basically you’re explaining, you got the funnel, right. And at every step of the funnel, you’ve tripled your performance.

And obviously that all adds together. So now you dominate. And this is just a single keyword too. Right. But how do you, can you benchmark on this? So given that you have these four stages of the funnel and obviously your CTR is going to be much lower. Or your conversion rate is typically going to be higher, the lower down you get on the funnel.

Your conversion rate should be higher than the initial click through rate. But how do you figure out where to focus? Like, what’s the first, because you optimized all four, right? But was that something you did in parallel, or did you choose one, fix that? And then fix the next one to talk a little bit about that.

In this particular

STEVEN POPE: example, I did it in parallel but let’s assume I didn’t. Right. So if you have what I like to call a tornado marketing funnel, that means you have more people seeing your product than clicking on it, then purchasing it. Right. So it’s. It shrinks as it goes down, you have a conversion problem, but if the inverse is true, you turn that tornado upside down and you have a pyramid, then you have less impressions, then you have clicks, less clicks, then you have purchases, et cetera.

That means you have a traffic opportunity. And that’s what I found with the sage candlestick cleansing house. I had more people. Who were clicking on my product, then I was showing up impressions wise. And so the benchmark, if you will, is all of the search term query data that’s in the report, what is my market share of that data?

And if you make a change, does the market share go up? So obviously Everybody, whoever wants to spend money on PPC wants to know, Hey, does, is this impactful? Is this going to help me? And where is it going to be the most effective? You can, you can use ACOS and tacos and other acronyms to calculate your PPC spend on an immediate cease timetable and look at your campaign reports directly in Amazon.

But if you want to have more of a long view, you need to look at marketing funnels. And market share and use the search query performance report to come up with a strategy like this.

FREDERICK VALLAEYS: Love it. Yeah, definitely. Everyone who’s watching or listening to the podcast, you might want to check out the the video feed on YouTube.

There’s some great stuff in there that Steven is showing us, but let’s shift gears here and, A tiny little bit. We’re in queue for holiday shopping. What does that look like on Amazon? Are you, do you have evergreen campaigns, holiday campaigns? How are you ramping up? And talk a little bit too about expectations.

Do we think consumers are going to buy pretty close to the holiday or in the last couple of years on Google for sure. We’ve seen people buying earlier and earlier where October is now part of your holiday shopping season. Amazon came out with a

STEVEN POPE: second prime day this year. Right. Right in the middle of October.

Hey, what if we could extend a fake holiday here and try and get more people to start the shopping season early instead of just start this on Black Friday weekend? Huh. That’s what Amazon’s going for. But Michael, why don’t you take the evergreen?

MICHAEL ERICKSON FACCHIN: Yeah, so it’s a great question. And, you know, this is common with any kind of PPC, like putting your campaigns into particular buckets or purposes on Amazon in particular.

So a lot of. Advertisers will have like ranking campaigns or, you know, branded campaigns or competitor campaigns or evergreen sort of core keywords campaigns. So when we get into any holiday on Amazon, there’s often a pre prime day or a pre Black Friday, couple of days where there’s a conversion lull as people are waiting for deals to show up.

And then there’s, you know, depending on the keyword, depending on the product there could be sometimes a two, three, four or five or more X multiple on conversion rates during that timeframe. So what generally happens is that lull ahead of time. So like ROAS generally dips, and then you, you reap the, you reap the rewards of that during Black Friday, during the peak season.

And what’s interesting about the data that we’ve seen over the last few years for Q4, Is that there’s generally a pre black Friday, lull black Friday, you know, cyber weekend into cyber Monday gets hit really hard. And then bulk of it has always been like after like the month of December until people can, you know, not get their product by Christmas is when people are just hammering their ads really, really hard.

So in terms of configuration during that timeframe, you just see a lot of like, you know, as conversion rate goes up, your bids go up. So there’s. Most advertisers are going to be stepping on the gas. And it was actually really interesting. This past prime day, there were some brands and I’ve started to talk to more and more people that are doing this.

That sort of say like during prime day, we’re not going to do anything different. We’re going to leave our bids as they are. And just our conversion rates will naturally go up. Because of that, I speculate it’s because of a lot of the burnout, like they feel like Amazon is so expensive already. CPCs have gone up, you know, depending on the industry you’re in 20 to 50%.

I’ve seen areas where CPCs went up 70 percent year over year since where they were sort of in early 2020. So. I think there’s some general like burnout already like people feel like they’re spending so much on Amazon already. Now they’re telling you to boost your budgets and bids even more. Everyone that I see who does do that generally is pretty happy with it and being strategic with it does really help as well.

So understanding where to boost those CPCs and where to boost those budgets. It’s really important going into holiday season, generally putting it on your best keywords, not blanketing it across your entire campaign is like gives you the best bang for your buck where you’re not increasing everywhere.

You’re increasing a little bit more strategically and I always like to ask this question to, I’m curious on your thoughts, Steven holiday specific. Keywords. So like that men’s soap that you were advertising, do you go after terms like holiday gifts for men?

STEVEN POPE: Absolutely. So I love the gift category.

That’s kind of where my heart is. And most of the products that I sell under my age of Sage brand and some of my other brands are very focused on seasonality and gifting language. The benefit of that is that in a short time period, I can launch a mom box. And I have actually had that behind me.

FREDERICK VALLAEYS: So this box right here, even never missed an opportunity to sell something when he came. Yeah.

STEVEN POPE: Anytime he gets chosen

FREDERICK VALLAEYS: on him here. So

STEVEN POPE: this, this product right here, and it’s a giant mess. Cause I’ve moved this so many different times. It comes with a, a mom card, a tumbler that has the word mom on. It’s a nice hot pink.

It’s got two soaps, a bath bomb, and then it’s got some lotion and, and this product, when I launched it in the first 30 days, I was able to generate more than 144, 000 in the first 30 days. And this was Mother’s Day, 2021. Well, this last year, it only did 67, 000. And that’s because of the economy and softer, right?

Like, like the gift category in my experience from my own data is down 60 percent year over year right now. And so that’s very rough. Right. So like, I’m, I am way overstocked on a lot of my mom gift boxes and stuff like that. But the cool thing is, is when you ride that seasonality wave, you get experiences where you get like 144 K in 30 days on a single skew and you can, you can ride those ways, but the downside is, is that 90 days later, it might only produce like a hundred units in sales a month.

Like it’s just all over the place. Very, very hard. To. To forecast that situation, but, but seasonality can be done. You can make your products, you can extrapolate, you can look at data to see where trend lines are going up and down and all, all of the gift language trends are downline right now. Cause inflation, I mean, the government says inflation is like 9%.

The real inflation rates more like 27%, just triple whatever the government says. And so, and, and we live that right? Like the gift category wouldn’t be down 60 percent if the inflation rate wasn’t this high. And so what, what ends up happening is the consumers are spending their money on bread and milk and gas.

They don’t have money for gifts. So, so an evergreen strategy where you get in the gadgets, the kitchen gadgets and the widgets and stuff like that is a safer item to be in. But there’s less upside in, in seasonal event scenarios.

FREDERICK VALLAEYS: And I’m curious, like, so then you have these boxes with like the soaps and the lotion and the tumbler.

Is the strategy then, hey, de bundle the thing so it’s no longer a gift box, but it’s now the necessity because other things I’ve heard about the recession and inflation is that yes, people do give up on the big purchases, like they’re not going to spend 1, 000 on a TV, but mentally they now think, hey, I didn’t spend 1, 000, so I actually have 20 bucks to pamper myself because I’m stressed about not having money.

But I’d like to take a nice bath with a nice bath salt in it, right? Are you seeing any of that?

STEVEN POPE: I wish that were true, but in my experience, it’s not. So Vimal, if you want to share, share my screen again here. So I have a wine glass brand under the brand name Monster, and these are, 15 wine glasses, right?

So I had to go into tumblers, but for the most part, I lived on this brand with 15 wine glasses with funny sayings on them, you know, such as grandma shark needs a drink and because patients and I’m not drinking alone, I’m social distancing. This is the one that was. Organic slot number one on wine glass and got banned 1100 reviews, right?

And now it barely moves like a unit a week. Like it’s just totally a dead product. Now, hopefully never have to social distance ever again in my lifetime. But in any case these items also fell off a cliff even more so. Then the bundled items. So if you’re trying to figure out how to navigate a downturn economy, single items is not the way to go.

From my experience, we’ve gone. We’ve had better results by packaging things together. It takes more money invested in cogs. But it’s, it’s a better experience. I’ll give you one more example. So this is a sage smudge ticks kits, and in here we lose money on the three pack to try and upsell into the six, 12 and a hundred pack scenarios.

And so by parenting them together, we run all of our ads to the lowest cost option, the three pack right here. And the hope is, is that enough people will upsell and convert themselves. You know, for 20 bucks, I can get a pack of 12 versus 10 for a pack of three that will make more money by doing that. So from my experience, kidding is a good idea.

FREDERICK VALLAEYS: And that’s another question. Then we’ve looked at reviews as an important aspect. You need to have some reviews, good reviews. Obviously price is very critical. And I think you just sort of said, listen, I’m going to advertise better if I take people to the low cost. I don’t want to show them a hundred dollar bundle of sage if I can do it for 10 and then upsell them later.

Quality of the landing page. You also alluded to video in the beginning. Let’s talk about video for a moment. Right? So video is becoming more and more important. What’s the production quality that you need to put in? And, and, and does it actually make a big difference right now to put in a phone? He held up a phone with three cameras.

So production quality, not that great then, or are you an amazing phone photographer, Steven? I

STEVEN POPE: mean, you could have a 10 megapixel phone do as much as you need to get videos done. Now we’re, we’re in the, the biggest UGC event ever, user generated content, right? So if you haven’t, you know, if you, if you’re a million dollar brand, And you haven’t hired somebody to make video content.

You’re just missing out, right? Video ads have never been a better place to invest on the Amazon platform than they are right now. When they first came out, you could do animations. And that was really cool. We saw some like a dog tail wagging. That was like my favorite video ad that I’d ever seen before.

They banned animations or they’re at least not allowing most of them to go through these days. They have to actually show the real product and show it in use and whatnot. But I, I think that there’s a huge opportunity with videos. What do you think, Michael?

MICHAEL ERICKSON FACCHIN: Yeah, it’s an easy 10 second audit for someone just open up their account and see if they’re running sponsored brands ads, and if they’re not, it’s like the easiest way to add value.

It’s actually pretty interesting. We did a study. We downloaded a whole bunch of clients, a view video of ad view reports. And it turned out that the majority of videos, most people are only watching the first 10 seconds before clicking on it. So the way that I interpret that data is like the placement is so valuable.

The fact that when you’re scrolling, you get to see the product and use in the first few seconds, you’re like. Okay. Let me check this out. And that clip click happens very, very quickly into the video view of the ad. So it’s such an easy way to add value in terms of production quality. I view it as like pass fail.

I don’t think you need to hire Christopher Nolan to direct, you know, the most, although that would be

STEVEN POPE: cool.

MICHAEL ERICKSON FACCHIN: Yeah. Yeah. Or Michael Bay to, to do your. Tumblr’s right. I don’t think you need to hire a

FREDERICK VALLAEYS: nice, clean background, good audio camera, but you don’t need to, we’re not directing the next beautiful movie here.

My default

STEVEN POPE: marketing philosophy is something is better than nothing. So if you don’t have video ads, just get something up. Who cares what it is?

MICHAEL ERICKSON FACCHIN: It’s it’s true. So it’s, it’s really surprising. How many companies are still not running sponsored brand video ads on Amazon, but it really is like the easiest value add right now.

It takes up a huge chunk of real estate on the search engine result page. You can use it on your product page. You know, you can use it as a brand asset anyway, and it’s amazingly easy to get it, to get it going.

STEVEN POPE: So let me show one of the videos that we produce. This is for my Megapint video, right? Like, so this is just straight up.

Let’s just animate a little bit of things, show the product, show some texts. This would not make a great video ad per se, but this is what we put onto the listing, right? So sometimes you can show things like this and just showcase the product. You can put some infographics in and, and, and really show and tell it right.

But if we go over to type something in like Michael, give me a product here.

MICHAEL ERICKSON FACCHIN: I want to say, let’s do kitchen

STEVEN POPE: knife holder. It’s in knife holder. So we’re going to type this in. Let’s see if we can trigger a video ad. And as we scroll down, here’s, here’s one. So this is a bamboo. She touches the product.

She pulls out nice. And then she’s just going to drop knives into it. Right. Does people show and tell. You could shoot this on a phone all day long and, and you understand exactly what this product does in five seconds. And

MICHAEL ERICKSON FACCHIN: look at the real, it takes up the real estate of what would have been five products.

STEVEN POPE: Yeah. So one, two, three, four, five like that. And you’re seeing the video ad right there.

FREDERICK VALLAEYS: I mean, and so I saw that red tomato. Which actually the color popped a little bit. And I was like, okay, if I was looking at something else on the page, my eye would go to that video. Whereas the rest of it is a bit bland and the colors are very muted.

MICHAEL ERICKSON FACCHIN: So my first reaction to that is like, it probably doesn’t matter. Like, could you, could you make the video better? Sure. Does it matter? Like, do I think this campaign has like a bad ROAS? I would highly doubt that. My guess is the clicks are pretty great here and that the ROAS is among their top, you know, 10 percent of campaigns.

FREDERICK VALLAEYS: So you said ROAS. Let’s talk about ACOS for a minute. I know I’ve been

MICHAEL ERICKSON FACCHIN: using ROAS for the Google audience.

FREDERICK VALLAEYS: I know. Thank you for doing that. So one divided by ROAS equals ACoS. I actually wish Google used ACoS because it’s the easier metric to understand ROAS is sort of like everything’s upside down, but Stephen, you made the point you make one sale on PPC and you can sort of expect three sales on organic.

And then we’re also saying PPC on Amazon is very expensive. Should advertisers account for this sort of secondary effect of, yeah, you buy the click on Amazon, you’re going to lose some money on it, but it’s going to come back and pay off eventually? Or how do you manage a cost? So I like to use phases.

STEVEN POPE: Right. So when you go through a product’s life cycle, phase one is the launch. Then you got like phase two is the profit. And phase three is kind of when it starts to fall off a cliff. And you’re just trying to grab as much margin as you can on the way out. Right. So on a product launch, the honeymoon period, those that’s the sort of content people need to watch, pay attention to when they’re trying to investigate.

Phase one, and this is basically advertising at a loss. You are advertising just to generate sales. So on the podcast today, we talked about, you need sales to get sales, right? It’s like a chicken or an egg question. Well, how do I get sales? If I don’t have sales, you just have to get sales like literally.

And, and so if you think about it from that perspective, PPC is the gasoline. That you put on your, your, your, your firewood and sure you could start a fire without gasoline, but if you put the gasoline on, it goes faster and bigger. And it, and it ignites easier and can ignite even under harsh conditions such as rain and being wet.

Right? So those are the reasons why, when I think about strategy and PPC, I think about it in terms of phasing. So by the time you get to phase two, you could go to a break even strategy. And by that, I mean, let’s say your cogs. Advertising all costs in is 20 and you sell the item for 20. So after all is said and done, if your PPC costs you four of those 20 and it would equate to breaking even.

I would say that’s a good strategy because breaking even on PPC allows you to make money on the SEO sales. So if that, if that ratio is true, in theory, you should make money on those three organic sales that follows that break even PPC sale, but later as you try and go through the phasing and you’re no longer caring about what next year is going to look like.

You only care about what this month looks like at that point. Instead of break even PPC, you’re like, man, I better, I better have like a 50 percent net margin on my PPC. I’m not going to advertise over a dollar per click, a dollar per sale, even in some instances on a 20 item. And then you’re, you’re obviously your budgets and campaigns all have to pull out.

So phasing approaches is definitely where it’s at. In my opinion.

FREDERICK VALLAEYS: Interesting. Michael, what do you think?

MICHAEL ERICKSON FACCHIN: I agree at a hundred percent phasing, like how hard you spend and the way that a lot of. Advertisers manage it on a month to month basis is they’re looking at per product. And they’re basically saying, what are my total sales for this product?

What are my cost of goods sold? What are my Amazon fees for that product? And then how much am I going to be spending on advertising for that product? I think the most popular amount of ad spend spent on a product. For in comparison to its total revenue, that number is often referred to as total a cost or add cost of total sales where you’re taking your ad cost that you’re spending on that product and you’re comparing it to the total sales for that product.

So imagine a product did 1, 000 a month in total revenue, that’s ads and organic, the most popular total a cost people are generally shooting for is like a 10 percent increase. Total amount of my revenue spent on those ads, and then if you use that as sort of a baseline, you can then sort of throttle it and you can say, well, if I want to move into more of a profitability season, maybe I have a, a seasoned product that has very strong organic.

I want to see what happens if I scale down my ad costs from 10%. Of total sales to maybe nine or 8 percent of total total sales. So they’re shrinking their advertising spend relative to their total sales ever so slightly. And the pitfall that a lot of people fall into is they shrink that too much and they begin to dampen their advertising way too much.

And then all of a sudden a downward spiral happens just like Stephen’s animating. It’s, yeah, that’s absolutely right. So What happens a lot is that people try to optimize for profitability and they look at PPC as the first thing to do it because it’s so easy to see. It’s like, Oh, there’s my advertising bill.

Let me shrink this dramatically very quickly. I’m going to be profitable this month, but the downstream impact of that is often you begin to lose organic ranking. And then people sort of begin to spiral. They lost organic ranking. Now they’re sort of conversion rates going down. They’ve lost organic ranking.

Another total a cost got worse because now they’re generating fewer organic sales. So always having. Part of your budget for sort of, you know, you want to go on the offense when you are in a ranking phase, and then sort of you want to be defensive when you get there. You want to sort of hold your ground so that you don’t lose traction on some of those things.

You don’t want to scale back too much. So conversely, like that total cost could be throttled. Up as well, where you’re saying, Hey, I was spending 10 percent of my total sales on ads. Let’s see, let’s try to rank higher and let’s try to rank more organically. Let’s try to increase that total a cost to 11 or 12%.

Now all of a sudden they should see an impact of more organic sales. And you can measure that with a search query performance dashboard that Steven pointed out earlier.

FREDERICK VALLAEYS: We so we’re coming close to time here, but we had a question from one of our frequent viewers, and it’s basically about looking at week over week or month over month performance.

What I’m kind of starting to gather from you guys is that, you know, when you have these phases of product looking week over week is maybe not the right thing because you, you move through different phases. And then I’m also hearing from Steven that consumers are fickle. So. Right. So the biggest wine glass of 140, 000 in sales the next week is like selling one unit a week.

Is that part of the reason why Amazon isn’t really helping us understand period over period data, or is it just that the API team is lazy?

MICHAEL ERICKSON FACCHIN: Well, I won’t pass judgment, but so, you know, anyone who’s been doing Amazon advertising for a long time has just slowly seen more and more features get baked in.

And a really interesting thing. I don’t believe this happens on the Google ad side, but the teams that work on Amazon advertising are very far apart, but it can often feel like. And my impression of it is that they’re not always communicating. Like there’s different reports for it. One ad type and there are another ad type.

There’s different metrics for one ad type than another ad type. So to, so this idea of saying for every ad type, I want to prepare a comparison report. Would have to coordinate all the different teams working on all the different ad types, which is something that I don’t, I think, I think would be uncommon for them.

So like sponsor brand ads has new to brand sales, sponsor products doesn’t, it’s like a metric that indicates how many new customers that’s only available in one ad type. So there’s, there’s weird things happening on Amazon and how their data. Comes into place. But I’m sure if you were to ask any tool provider or service provider, like that’s extra work that needs to get done.

It’s like, let me compare September versus August so I can measure the trend line. So currently that’s a, that’s a manual task we get in some reports. Like that report that Steven had, the search query performance dashboard. You do get week over week, but it’s not in the same spot. So you sort of have to download the data and prepare your own.

FREDERICK VALLAEYS: That’s a good reason to look at a tool provider, right? Because you can pull these reports and historically store it. I’ve got a shirt on. Yeah. That’s right. And so hey, that’s a good pivot here. So Ad Badger, tell us more about it. How should people reach out to you, Michael, if they want to know more?

MICHAEL ERICKSON FACCHIN: Sure. I mean, they can head over to Ad Badger. com. And if you’re curious on the podcast to learn more about it, that’s just Ad Badger. com slash podcast. I think that’s a great way to start and get to know us. And

FREDERICK VALLAEYS: by the way, I listened to the latest episode. I don’t know if they all start the same way, but initially I was like, wait, is this a BBC Nature special.

Yes.

MICHAEL ERICKSON FACCHIN: Frederick. We, if we’re not having fun, nobody else’s. Yes. We try to have a lot of fun. Can

STEVEN POPE: you give us the badger mating call?

MICHAEL ERICKSON FACCHIN: Oh man. I, I, but the, what Frederick’s referring to is we got a David Attenborough voiceover actor to sort of illustrate like a little badger out on the field and like, he’s going to be attacked by bad ACOS keywords.

Really good. Really good. Definitely check out. Michael and his amazing podcast and the tool that he has at had badger. com. Steven where do people find you? Well, there’s a couple of

STEVEN POPE: resources we talked about today. I’m going to give you three website links. It’s going to be myamazonguy.com slash link.

Number one is SEO. PPC and ICAP. Those are three web pages that will give you more information about kind of the topics we covered today. PPC, SEO, and ICAP. Impressions, clicks, add to carts, and purchases. You guys can always drop us an email over at podcasts at myamazonguy. com and check us out on YouTube.

That’s where we post all of our 1, 200 videos of content.

FREDERICK VALLAEYS: Yeah. So both Stephen and Michael have lots and lots of videos as do we. So if you like this one, please subscribe at the bottom of the screen, subscribe to Stephen and Michael’s YouTubes as well. Listen to their podcasts. Guys, thank you so much for joining us, everyone.

Thanks for listening. If you need help with a PPC management tool, Ad Badger has a two week free trial. So check that out and we’ll be back in two weeks with another episode. Thanks for watching.

STEVEN POPE: Thanks for having us. See you

later.