Best Amazon PPC strategies for the holiday season

With Thanksgiving falling on November 28th this year, there are six fewer shopping days between Thanksgiving and Christmas than in 2018. That means the holiday season should be even more intense and competitive this year.  According to NetElixir's 2019 forecast, despite a relatively slow holiday in terms of overall growth, Amazon will take an even larger share of the e-commerce market. They predict that Amazon's share of total online holiday sales will reach 44% this year.

Due to Amazon’s success as a retail platform, more advertisers will be pursuing holiday season sales. This means more competition for attention, resulting in potentially higher cost per clicks (CPC), and more expensive campaigns. So, what is the best strategy to ride the holiday season wave? As with most e-Commerce these days, the answer is to focus on the data: to collect it, analyze it, and execute based on it.

It all comes down to knowing your customers

The best way to start building your PPC strategy is to look at the data you already have, and the first thing you should do is make sure your existing house is in order. Review your search term successes, and failures, and ensure your PPC campaigns are working the way you wanted. You can then look at previous years’ data with some confidence.  

It is worth noting that Amazon only allows you to keep the last 60 days of data, so this option is only available to you if are using a 3rd party platform that stores data for longer or if you manually saved the data yourself last year.  If you have done this, you can now build a plan around what were your the most competitive days of the season. You could also plot the patterns of low- and high-value customers and compare pre-holiday and holiday season behavior.

One of the things you may notice is that customers do not quite behave the same way in the holiday season as they do at other times of the year. Some of the things to look out for are: is there a decrease in the time between the first landing and actual purchase? Does the Average Order Value (AOV) increase? Does the number of items per shopping cart increase? 

Answering questions like this should be high on your list — let’s look at this in greater detail. 

What you need to do

Broadly speaking, there are two areas of focus for your strategy:

1. Keyword optimization where you use software to change keywords and target (broad to exact match, for instance), expand to include synonyms and phrase lookups to find undervalued keywords.
2. Bid management where you can adjust bid prices and re-balance budgets across keywords.

But analysis is much more than looking down lists of reports on Amazon Seller or Vendor Central. Analytics software that deploys machine learning and AI algorithms to collate and find patterns within a wide range of Amazon reporting functions delivers the real foundations to understanding your Amazon customer data. Armed with this insight, here are five steps to follow to help formulate your best PPC holiday season strategy.

1. Start ASAP

If you haven’t already started a PPC campaign, start as soon as possible. First, that means forecasting inventory — you can’t run ads if you don’t have inventory. However, if you operate an FBA operation, you don’t want to overstock and end up getting stuck paying Amazon to store that inventory. 

You also need time to use the technology at your disposal to optimize your listings and execute your plan. The best PPC campaigns usually don’t arrive fully formed. The longer you have a campaign running, the more exposure you will get, and the more data you will be able to collect. This will help you hone your messaging while also grabbing traction from holiday shoppers who start looking early.

It is also important to get campaigns up and running to catch shoppers who start looking early — especially for big ticket items. If you look at the search term report from Amazon Brand Analytics, you will be able to spot trends in search term rankings. However, be aware that this may lead to a low conversion rate early in the season. Shoppers often wait for Prime Day to actually make a purchase. So, although rising search volumes are a good indicator of terms to bid on, you need to be careful that you don’t waste your ad budget getting clicks from shoppers that are not ready to convert.

2. Flex your budget

Unfortunately, ad costs will go up with the increasing number of competitors, as your competitors will also be willing to spend more. Typically, costs go up each year at the end of Q3, and don’t go back down until after the New Year.

Taking Prime Day as a benchmark, ad spend during the period went up by 33%. However, total revenue increased by 540%. If there is going to be more traffic and more customers, it would make sense for you to consider increasing your budget to make the most of the increase in customer activity. The concern, for example, is you run out of funds early in the day on a product campaign and miss lucrative ad placement later in the day. This is where your automatic bid management will pay dividends. 

Rather than seeking to manage your budget, use software to actually react to what is happening and maximize your budget. As it progresses, this kind of tool will learn and improve — hence the need for AI and machine learning.

3. Remember it’s the Holiday 

Always keep in mind holiday-related keywords. By adding a holiday theme to your PPC ad content, you can try different ways of associating your products with the season. You can try this with a few small changes— for example, adding “Perfect stocking filler” to your ads, or using holiday images. 

Holiday thematic advice applies to product listings as well — and going through to add holiday themed phrases to your product copy can help you rank for holiday related search queries. It’s just important to remember to change all this back once the holiday season is done and gone. 

Follow these steps to make sure your best search terms are getting the most exposure — this approach is known as search term isolation and really comes into its own when carried out by analysis software:

1. Use your analytics software to analyze your search term performance looking at the search terms that have at least one sale.
2. Let it move these converting search terms into specific campaigns as an Exact Match keyword.
3. Let it create negative terms for the same converting search term from all other campaigns.

You could then have each of these terms placed in a unique AdGroup, to create the most relevant keyword/ad/landing page associations — to improve Quality Score, click through rates (CTR), and drive down cost per click (CPC). Using analytics software, you can do this for all terms in an account, with thousands, or even  tens of thousands of terms.

Holiday campaigns will naturally run for a shorter period of time than campaigns at other times of the year, so you have to be laser focused on which keywords are working, which need work, and which need more or less money committed to them. The key to this is having a deep analysis of your keywords and how they perform. Analytics software, especially if it is making use of machine learning and AI, will help provide the answers to what keywords are working early.

Conversion rates tend to be highest between 9th December and 20th December. Breaking down the holiday season into specific periods will enable your analytics software  to tailor your messages and capitalize on different buying behaviors at different times. For example, offering bundled offers earlier in the season, or express delivery options later.

When it comes to benchmark periods in the holidays, consider some of the following in your campaign calendar: Cyber Monday, Free Shipping Day, Hanukkah, the week before Christmas, the week after Christmas, New Year’s Eve. Customers shopping during these periods will have strong intent but different motives. These could be some of the most effective times to increase bids or maybe offer coupons or Lightning Deals if you can. Just remember to choose the periods and occasions that align with your brand and target audience. And then target your ads in the right way. 

4. Use tools to rethink your ad choice and campaigns timings 

It’s most important to look at your products objectively — challenge your assumptions on which products will perform well. Let the data you gather guide you through the process and use the data Amazon provides rather than simply making a personal decision.      

For example, there is a view that Sponsored Brand ads are much more effective at converting leads during the holiday season than Sponsored Products. Sponsored Brands displayed in the top of search results are prime real estate for search visibility. During the holiday season, you can use your analytics software to test whether showcasing your brand and top products increases sales as well as looking whether you are now appealing to a wider range of buyers. The holidays are a good time to widen the exposure of your products to new audiences.

Sponsored Brands ads will automatically display the most relevant ASINs from your store or landing page based on a shopper’s search. So, test it, and look to change the focus of your campaigns as a result. 

Another approach is to try different profiles for turning campaigns on and off at different times of the day. This can be time-consuming to manage, but your software will help automate this process. The most important advice when building a PPC strategy is to constantly test and improve, even on a tight timetable. 

Basically, A/B testing (sometimes called split testing) is experimenting to compare two types of campaigns. You can try A/B testing on your ads to see what combination of factors gives you the best results. You can test CTR, CPC, conversion rates, and any other metrics important to your PPC goals. Most important, once you have analyzed your test results, implement changes based on these results.

When testing, make sure that you watch out for latency in data results. Sales data can take a few days to process. If you’re running Sponsored Products ads you will first see clicks and no conversions — which are going to result in high spend and high average cost of sale. Give the data time to catch up before looking to change or modify campaigns. 

5. Check your pricing

Pricing is extremely competitive on Amazon. It’s the main factor in whether or not you get into the ‘Buy Box’. That does not necessarily mean you should engage in a race to the bottom when it comes to prices. Sometimes a higher price can increase sales by implying you have a higher quality product. Again analysis software is your friend here. Rather than just being based on simple rules, it can learn and change pricing automatically based on sales history, Buy Box performance, sales rank and stock levels — while leaving you in control.

Enjoy the most wonderful time of the year

There is much to gain this time of year, and well-executed data-led PPC campaigns will ensure success. Adapting to the needs of the holiday season and making best use of the data available will lead to you achieving the highest conversions. Assess and optimize your current products, plan and start your campaigns early, use the ad resources at your disposal, test and monitor rigorously — and you will have a happy and prosperous holiday season.