Amazon PPC ads are one of the most important tools for every Amazon seller. Running successful ad campaigns is extremely important in order to boost your sales and prevail against your competitors, especially during product launches.
However, paid ads are an art in itself and difficult to master. That’s why many sellers struggle with low conversion rates and waste a lot of money on poorly performing campaigns.
If your Amazon PPC campaign is not converting well at the moment either, don’t give up just yet – there is a solution for every problem!
In this post we will show you x possible reasons why the conversion rate of your Amazon PPC ads is so low and what you can do to optimize your Amazon PPC.
- Introduction - What Is The Amazon PPC Conversion Rate?
- Reason #1 - You Don’t Regularly Optimize Your Campaigns
- Reason #2 - You Don’t Get Enough Impressions
- Reason #3 - Your Listing Has A Poor Click-Through-Rate (CTR)
- Reason #4 - Your Product Listing Is Not Optimized
- Reason #5 - Your Terms Of Purchase Are Not Attractive
- Reason #6 - You Have A Bad Product Or Sell In An Oversaturated Niche
- Key Learnings - How To Improve Your Amazon PPC Conversions
The Amazon PPC Conversion Rate: What It’s Good For And How You Can Calculate It
A conversion is basically the same thing as a sale. The conversion rate describes what percentage of the people who click on your product listing ultimately buys your product. It is calculated as follows:
Conversion Rate = Conversions ÷ Clicks
There is no definite estimate of how high the conversion rate should be, as this strongly depends on your niche and the price segment in which you are in.
Supposedly, the average conversion rate on Amazon is around 9.5%. If the conversion rate on your Amazon PPC ads is very low, this is likely due to errors in your campaign structure or management or even your listing itself.
You Don’t Regularly Optimize Your Campaigns
Especially for those new to the space, but also for advanced sellers, it can be difficult to find your way around the world of Amazon PPC. Thousands of new pieces of information and hundreds of Amazon PPC guides that all seem to recommend different strategies can sometimes be more confusing than helpful.
Nevertheless, one of the absolute biggest and most fundamental mistakes is not optimizing your Amazon PPC campaigns on an ongoing basis. It’s impossible to get good results and high conversions if your campaign isn’t constantly optimized in the best way possible.
Amazon PPC is not a “set it up once and it will run on its own” kinda thing. You need to look at your newfound keyword data over and over again and use these insights to implement any necessary changes to your campaign. This campaign review should be done at least once a day on every single day that your campaign is running.
The Solution: Evaluate The Keyword Data From Your Campaign Reports And Use It To Optimize Your Targeting
There are entire detailed guides to PPC campaign optimization, but for example, you need to look at which negative exact match keywords and negative phrase keywords you should use.
This means that you have to carefully evaluate your campaign reports and, based on your findings, remove irrelevant keywords from your campaign (meaning you add them to “negative targeting”).
By doing so, you sift out the keywords that convert poorly because they are not relevant to the buyer’s search intent. In the end, you are left with keywords that perfectly match the prospect’s search query and are therefore very likely to convert well.
The more good converting keywords you have in your campaign, the more clicks and sales you will achieve and the better your conversion rate and the lower your ACOS will be.
Check out this post on keyword cannibalization!
You Don’t Get Enough Impressions
If no one sees your ads, obviously no one can click on your ad (duh), so you have no chance of getting any conversions. Thus, if you have low impression numbers (you can easily check these numbers in your Campaign Manager), you need to increase them so that more people see your ad and click on it.
The Solution: Increase Your Bids To Win More Auctions
Usually, you achieve a higher reach, i.e. more impressions, by increasing your bids, as Amazon will obviously display the ads of those sellers who pay the most for the keyword.
However, bidding strategies are a science in themselves and will be covered more in-depth in other posts.
The Listing Has A Low Click-Through-Rate (CTR)
A basic rule of Amazon PPC is that impressions and clicks always go hand in hand. If your ads get a lot of impressions but only generate very few clicks, this results in a very low click-through rate.
However, having a good CTR is really important as it means that more people will check out your listing, engage with your product, and the likelihood that it will ultimately be purchased increases dramatically.
The click-through rate is calculated as follows:
CTR = Clicks ÷ Impressions
So if you have 10,000 impressions and 50 people click on your listing, your click-through rate is 0.5%.
Usually a click-through rate of 2-3% is really good, between 0.5%-2% is definitely solid. If your CTR is lower than 0.5%, there is certainly a need for optimization.
The main reasons for a low click-through-rate are a bad main image, having no or only few reviews and/or a bad listing title. Especially when customers have a lot of product alternatives to choose from, the first impression has to be perfect as humans are highly visual creatures.
The Solution: Optimize Your Main Image And Listing Title
Since the listing’s main image is the first thing customers see when browsing through the search results, it has to stand out and portray your product in the best way possible. Once the image has caught the customer’s attention, they will look at the title.
Make sure it is easy to read, avoid keyword stuffing and scammy wording. And – of course – your title must be compliant with the Amazon guidelines. In our SEO Guide, we explain in detail what makes a perfect listing title.
Your Listing Is Not Optimized
A low-quality listing is usually the main reason why your PPC ads convert poorly. The attention span of buyers is very short and you need to convince them of your product in a few minutes or sometimes even seconds. This requires an absolutely perfectly optimized Amazon listing.
The good news is that if you invest in good listing optimization, not only will the performance of your PPC ads benefit, but it will also positively impact your organic rankings.
The Solution: Optimize Your Listing Content
In our comprehensive SEO guide we go into detail on what a perfect listing looks like, but essentially you should pay attention to the following aspects when optimizing your listing:
- Product Title – Make sure your title contains the primary keyword, your brand name and the most important features of your product, such as the color, the material or special features (e.g. water resistance, durability..).
- Main Image – The main image must be absolutely perfect and of high quality to portray your product in the best possible way. If your main image looks cheap, customers will think that your product is cheap as well.
- Product Images and Infographics – The purpose of your product photos is to show your product from all possible angles so that customers get a good feeling of its look and feel. Additional infographics help you show the customer what unique benefits your product provides, including those that may not be immediately apparent at first glance. Invest in hiring a product photographer if you need help with that!
- Product Videos – If you are registered with Brand Registry, you can (and should!) use product videos to “bring your product to life”. It is important that the video is produced in a very high quality, as otherwise it will have a negative impact on the perception of the product.
- Bullet Points – Bullet points allow you to show your customers the most important core benefits of your product at a glance, enticing them to buy within seconds. It’s best to use about 5 bullet points and capitalize the most important words so that the customer can see the most relevant features right away when they scan the listing.
If the appearance of your product and the benefits you show are perfectly highlighted in your listing, nothing stands in the way of a drastic uplift in your conversion rate.
Your Terms Of Purchase Are Not Attractive
Buyers always want to find the best buying conditions for them. One reason your Amazon PPC is getting lots of clicks but no conversions may be that yours just aren’t attractive or convenient enough.
Conditions that influence the customer’s decision to buy or not buy your product are the price, availability, shipping time and cost, and whether your product is available with Prime.
The Solution: Lower Your Price, Stock Up Your Inventory And Figure Out A Fulfillment Solution For Fast Delivery
Put yourself in the buyer shoes: what could be the reason that keeps people from buying your product? Compare your price and shipping time and costs with those of your competitors.
Are your prices and shipping costs significantly higher than the others and if so, is there a way to lower them?
If your shipping times are too long, it makes sense to switch to a reliable and professional third-party fulfillment provider. Also, you can increase your sales by switching at least partially to the FBA program and selling your products through Prime.
A product that is not available can obviously not be bought. So if you have problems with your availability, work on your inventory management and make sure that you regularly reorder enough products so you never run out of stock. Keep an eye on holidays like Chinese New year if you are importing from China for example!
You Have A Bad Product, There’s Low Demand Or You’re Selling In An Oversaturated Niche
No seller wants to hear that, especially as you have already invested in your product. But unfortunately, your product may simply not be attractive enough for people to buy, or the overall demand for the kind of product may be too low.
Another big problem with your product may be that there are already hundreds of existing alternative offers from other sellers. This is especially a problem in saturated niches such as cell phone cases, pop sockets, or water bottles.
If your product is not fundamentally different from other products that have been on the market for some time and that have already collected many positive reviews, any attempt to run a successful, highly converting Amazon PPC campaign is more or less doomed to failure.
So in the case of a poorly chosen product, it doesn’t matter how well your PPC campaign is set up per se, the ads won’t convert until you change something about your offer.
The Solution: Find A New Product Or Improve Your Design
If you have not yet invested tens of thousands of dollars in your product, then it is best to find another product to sell on Amazon. Make sure that the demand for the chosen product is reasonably high, but that the product niche is not yet saturated.
The most important thing is that your product offers real added value compared to competing products. You can achieve this differentiation through exceptional quality, a very low price, a unique design, or useful bonus features.
If you have already ordered and paid for too many units and it is no longer possible for you to cancel the order, you can try to improve your packaging design or lower the price of your product. The aim is that you at least achieve enough sales to eventually break even or only incur a minimal loss with this failed product.
Conclusion & Key Learnings – Leverage Your Campaign Data & Fully Optimize Your Listings
There are many reasons why your Amazon PPC campaigns are not converting. In any case, the first thing you should do is analyze your data carefully, using your Campaign Manager and Dashboard as your best friend.
Use this information to regularly check whether you have the optimal keyword strategy in place and whether your bids are high enough to achieve sufficient impressions.
To increase your click-through rate and ultimately convince customers to buy, you need to make sure that your listing is absolutely perfect and presents your product in the best possible way. Especially the product photos (particularly the main image), the title, and the bullet points are extremely important.
Remember that your shipping and overall terms of purchase can ultimately make or break a sale. A short delivery time, low (or no) delivery costs, and constant availability are an absolute must in order to achieve a high conversion rate on Amazon.
However, it is best to let a professional Amazon PPC agency or consultant analyze your campaigns and listings and if necessary redesign them. They can immediately identify weaknesses in your campaign structure or listings and give you valuable tips that you can then successfully implement yourself in the future.
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