Amazon PPC Automation with Micheal Hecker & Danny McMillan – Session 012

Richard Morgan
September 8, 2017

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Micheal has big data and a 5 step approach for Amazon PPC Automation to optimise and automate your ad spend. We cover keyword research and search term reports, how to calculate keyword relevance and product data optimisation along with ad group strategies that win.

Micheal’s 5 Pillars Strategy

Keyword Calculation

Manual research is really complicated with big portfolios (20-30k upwards) and many marketplaces with many languages
Process has to be based on numbers and automated

Step 1 – Analyze Amazon search recommendations

You calculate keyword candidates by analysing Amazon search recommendations
Analyse top seller data – which words and word combinations are more frequent in a specific product category
Search term reports are most valuable source – knowing which search query generated how many impressions

Step 2 – Calculating Keyword relevance

Searching for ‘women’ as a keyword you find all kinds of products
None of those product categories has a high relevance for the keyword ‘women’
If you searched for “women’s sneakers size 8” then you would be more specific as it’s a really high relevance keyword
Really important to review your search term reports to see which search queries your ads are firing for and to spot the
irrelevant search queries and put them as negative keywords

Step 3 – Product Data Optimisation

You might have 2000 to 3000 keywords but 90% won’t generate a single impression
Need to help Amazon understand that your product is relevant for a specific keyword
We slice the keyword set up into slices
Take a slice and optimise the search term attribute we are going to update and send it to Amazon
Week by week we take a new slice and send it to Amazon
We then know the reach, cost and conversion for each keyword

These are manual processes to get it started the aim is to automate this process as part of your Amazon PPC automation strategy

Strategy 1 – all keywords found leave the duplicate keywords in
Strategy 2 – Exact match keyword – we keep the duplicates as the exact match will be found but downside is less keywords so fewer to rank with but relevancy is high

Now we Create the campaign

We do it differently
Only create 2 amazon ads campaigns
Having a high number of campaigns can cause ‘collusion’ which limits Amazon’s choice
Keyword ‘women’s sneaker white’ as exact and ‘sneaker’ as a broad match mean the algorithm needs to decide between them both and may choose the less relevant one to fire your ad for
Your bid management program does not know which one to go for
Reduce the risk of ‘collusion’ by reducing the number of campaigns
Just one campaign for auto and one for manual targeting campaign
Creating an ad group for every single SKU because Amazon differentiates between total sales and same SKU sales
In reporting – if you have multiple products in your ad group then you know you sold products in the ad group but you don’t know which products you sold
Have a single SKU per ad group to optimize your amazon ppc automation

Step 4 – Controlling

Give the seller the data so you can evaluate your performance such as profitability, reach, cpc, etc.

4 Parameters

Which product to promote in which country
Campaign budget
Target ACoS – the most important parameter as a higher ACoS costs more to click and therefore more reach and traffic so more orders – but decrease target ACoS you get lower CPC and better profitability
Bid Management based on ACoS only works when you know how well a specific keyword converts but creating your first campaign you don’t know this so you need the default bid

With these 4 parameters you can control the whole system

Step 5 – Bid Management

Goal is to decide on a price for each amazon keyword
Wrong – falling in love with primary keywords and going with Amazon suggested bids and can never be profitable if the product has an average basket that is low
Take emotion out and decide on target ACoS and the revenue you are generating per click to decide on the price you should set for the bid for the amazon ads
A guide on CPC per keyword
How do you calculate this?
Scaling for 40 products with 2.6m different search queries you can see it’s impossible to do it manually
Language is also a problem if you are active in more market places as you need translations

A set of setup procedures to make these work and automated
Web interface does not exist – nothing for the seller to learn and configure
We focus on the 4 parameters you chose and the results go back to Amazon in Seller Central
AWS it plugs into the backend of the Seller Central and Michael’s team manage the ads and campaigns for you so you see the results in Seller Central
Goal is to really invest a lot of time in explaining all of the processes and trust the efficiency of the system
Limit of 2m of keywords that you can book per country – a limit to 100 keywords per product for a portfolio of 20,000 products

Michael’s agency is automated (having mastered Amazon PPC automation) and can handle many more SKUs at a cheaper cost than other agencies

The apparel sector has many SKUs because of sizes, colours, etc. so Michael’s ability to handle the many SKUs cheaper makes it a key customer for this service

The Glass and Glasses problem

The amazon keywords might get picked by Keyword Candidate algorithm might pick it but our ‘Keyword Relevancy algorithm’ would flag that glass and glasses are not compliant
The bid management program would see that the click through rate for the keyword is low and hence would limit the keyword
We crawl the keywords and match to the categories to determine where glass is relevant versus glasses as a keyword that converts

Going after the Main keyword

The software can calculate better than humans
First thing is make sure you have a great product at a good price – this helps ACoS and to be profitable
Ensure product listing and product quality is good to maintain a solid conversion rate – Europe has a 2.85% conversion rate.
A rate of 1.5% or lower means you need to optimise your listing rather than focus on Ads
When should you start your Ads?
- If you’ve got some reviews and down your lifecycle then your ads will be cheaper
- If you’re launching then your ads will cost more
We all want profitable campaigns and sexy ACoS
You need a great product to start and you need to understand your customer
Relevance of your keywords is important
Is your message congruent too
An ACoS of 1-2% is eye-catching but every category and every country is very different – makeup has a low profit margin and and so his ads need to be tight and have a low ACoS for this market

Three key things you should do for effective Amazon PPC automation:

Important that right now you switch to one SKU per ad group strategy – so when you give Michael a call he needs 60 days of info on each product
Invest into your keyword research – Michael has a chart of 20k keywords showing Google Adwords and Amazon that shows comparison of CPC rates (Amazon is 20 % lower than Google) – lower CPC and higher conversion rate. Price difference is increased when search volume is lower – long tail keywords really pay off
Primary keywords that everyone comes up with have high CPCs and are higher than Google CPCs for those keywords