Not sure the best way to structure your Amazon PPC campaigns? Here’s what you need to know

July 20, 2020 | Posted By Sarah Whedon

Not sure the best way to structure your Amazon PPC (pay-per-click) campaigns? You’re not alone. We hear questions about this all the time.

Getting started advertising on Amazon doesn’t have to be super complicated. Start with a basic campaign structure and you can grow from there. It makes sense to begin with Sponsored Products campaigns. These are the best way to quickly get visibility on your products. Later, once you’re more established on Amazon, you might move up the ad funnel to include Sponsored Brands or even DSP.

Sponsored Products are highly dependent on consumer search terms. A consumer searches for something, say, “vacuum cleaner bags” and the ads will match with that search term to show the consumer your product as a result.

screen shot showing Sponsored Products on Amazon

All these search results for the search term “vacuum cleaner bag” are labeled “Sponsored,” indicating that they’re Sponsored Products ads; image from Amazon.com

Sponsored Products ad campaigns need to be thoughtfully structured in order to ensure that you’re not spinning your wheels and wasting your advertising dollars bidding the wrong amount on the wrong terms for the wrong products. 

Taking the time to set up your campaigns in the right way will enable you to direct your advertising spend where it needs to go and achieve your business goals.

Prefer to learn by watching a video? We’ve got you covered. Check out the replay of our webinar Amazon Campaign Best Practices for Evolving Product Lifecycles

Group products together thoughtfully

Some sellers run catch-all campaigns, containing every product in their catalog, with the idea that these will catch any product they might be missing in other more targeted campaigns. The trouble with this is that it’s virtually impossible to optimize these campaigns. If the products are of differing quality, differing margins, differing stage in their lifecycle, have differing competition — it won’t make sense to have the same bidding strategy for all those products. 

If you group together in a single campaign a new travel mug you’re launching for the first time along with an older model you’re trying to liquidate it’s difficult to allocate spend differently according to those divergent goals. In this case, incorrect campaign structure leads to overspending and missed opportunities. 

Don’t do this! Instead what you need to do is purposefully group products together within ad groups and campaigns. Every campaign should have a distinct purpose. Exactly how you structure your campaigns will depend on your catalog, goals, and preferences. 

Whether you’re just getting started with Amazon advertising and building your first campaigns, or you’ve been running campaigns that could benefit from restructuring, the first thing you’ll need to do is analyze your catalog. Consider product lines, margins, and product goals in order to determine the best ad structure.

Product Line

One way to group products is by product line or parent ASIN. This is the most concise way to group products. Any child ASINs should be within the ad groups, either grouped together or individually for a more targeted approach.

Margins

You should also ensure that all the products in any given campaign have similar margins. This will enable you to have fine-grained control in setting your bids. 

If you want to bid more aggressively on a product with a 40% margin than on one with a 14% margin you’ll be able to isolate them if you’ve structured your campaigns according to margins. A good rule is to avoid grouping together products with more than 10% difference in margins. Likely, if you’re grouping by parent ASIN, you’re naturally also grouping by margins. 

Product Goals

Finally, when you’re grouping products in campaigns it’s important to think about product goals. All the products within a campaign should share a common goal. If you don’t group by goals you’ll inevitably end up overbidding on some products and underbidding on others.

Your goals should reflect where a product is in its lifecycle as well as your long-term plans for your business. Your bidding strategy on a product you’re newly launching will be different than for a product in the profitability stage. If your campaigns are new or your product is new to Amazon, they’re unlikely to perform at the highest possible profitability. Launching a product requires time to gather data about what keywords perform efficiently and what bidding strategy works best. They also take time to build up reviews and rankings. 

Choose a mirrored or audience-based campaign structure

Once you’ve analyzed your catalog and made decisions about which products to group together, you’ll need to decide what kind of campaigns you’re running.

If you’re new to Amazon advertising, you’re likely still working to establish a brand presence and your budget will be best spent identifying and building ranking on category level terms. This is when we recommend following our basic campaign structure best practices, referred to as mirrored campaign structure. 

If you have brand awareness on Amazon and often see searches involving your brand or competitors, you may want to utilize an audience-based campaign structure that builds complexity and control on top of a basic mirrored structure.

Mirrored Campaign Structure 2:1

A mirrored structure is a 2:1 structure of two campaigns for every one product. You’ll be running both automatic and manual campaigns simultaneously for each ASIN that you’re advertising.

A mirrored structure enables you to use the explore and exploit strategy to improve advertising efficiency. Use auto campaigns to explore search terms. Identify performing terms in your auto campaign and transfer them into the keywords in the corresponding manual campaign, where you can more closely control them.

Audience-Based Campaign Structure 4:1 

If your brand is well established on Amazon, an audience-based structure may be more effective. It can give you more granular control over how you allocate your ad spend and help you to better capture competitor market share.

In an audience-based campaign structure you’ll still be running automatic and manual campaigns simultaneously for every ASIN you’re advertising in order to harvest terms from the auto campaign and manage them in the manual campaign. 

However, instead of having two campaigns for every one product, you’ll have several campaigns for every one product, typically a single auto campaign and then three manual campaigns each designated for brand, competitor, and generic keywords, for a total of four campaigns for each product. This will enable you to utilize different bidding strategies for different keyword types.

Audience-based campaign structureIn an audience-based structure the exact same products appear in the auto campaign and the three manual campaigns — brand, competitor, and generic

Allocate sufficient budget

It’s important to allocate sufficient budget for each campaign that you have running so that you don’t budget out during the day and miss out on opportunities for impressions and conversions. 

If you’re consistently hitting your budget cap, consider whether you can allocate more budget or shift budget from less important campaigns to make sure you’re sufficiently feeding campaigns that you are relying on.

Pro Tip: Use consistent naming conventions

It’s easiest to manage campaigns if campaign names and ad groups reflect the product line, goal, and targeting type. You should be able to identify which SKUs are in each campaign and ad group just by the name. You can easily edit campaign names within Seller Central.

Example:  “Vitamin C – Launch – Competitor – Manual.” 

You’ll know exactly which products are in which campaigns and what those campaigns are intended to accomplish. You’ll be able to sort and filter campaigns to focus your attention on optimizing particular ones. 

This is the kind of thing that might not feel important when you’re starting out and maybe only have a couple of products and a handful of campaigns, but as your catalog grows, your business grows, and the strategies you test grow, you’ll be glad you started out with and consistently utilized a clear naming convention.

Rinse, repeat

Amazon advertising is never static. You can’t expect to set it and forget it. You’ll need to regularly assess your campaigns’ performance to make sure they’re still working for you. Adjust keywords and bids frequently in order to continually optimize your campaigns. 

As your campaigns mature, you’ll be able to increasingly refine them and move them toward greater profitability. You can’t expect it to happen overnight and it won’t happen without care and effort. 

As your catalog grows and changes, ensure that you continue to maintain a structure that groups together similar products that share similar goals. As the market changes and competition comes or goes from the marketplace, be sure you’re continuing to update your advertising strategy to meet the changing circumstances.

Key takeaways

So, let’s return to the question we began with– how should you structure your Amazon PPC campaigns? Here’s what we recommend:

  • Don’t run catch-all campaigns
  • Group products together by product line, margins, and goals
  • Choose a mirrored or audience-based campaign structure
  • Move high performing search terms from auto campaigns into manual campaigns
  • Allocate sufficient budget
  • Use consistent naming conventions
  • Monitor and frequently adjust keywords and bids

Teikametrics Flywheel is designed to take the pain out of managing all of this. Use the software to build campaigns structured by goals and margins, automate bidding throughout the day, and identify performing search terms to move them into manual campaigns as keywords. Start your Teikametrics Flywheel 30-day free trial or book your Flywheel demo today.